Journal of CO2 Utilization 68 (2023) 102345

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Journal of CO2 Utilization

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Renewable methanol production from green hydrogen and captured CO2: A

techno-economic assessment
Stefano Sollai a, Andrea Porcu a, Vittorio Tola b, Francesca Ferrara a, Alberto Pettinau a, *
a
Sotacarbo S.p.A., Grande Miniera di Serbariu, 09013 Carbonia, Italy
b
University of Cagliari, Dept. of Mechanical, Chemical and Materials Engineering, via Marengo 2, 09123 Cagliari, Italy

A R T I C L E I N F O A B S T R A C T

Keywords: This paper aims to present a pre-feasibility study of a power-to-fuel plant configuration designed for the pro­
Power-to-methanol duction of 500 kg/h of renewable methanol (e-methanol) from green hydrogen and captured carbon dioxide.
CO2 hydrogenation Hydrogen is obtained by water electrolysis employing the overproduction of renewable electricity. Carbon di­
Renewable methanol
oxide is assumed to be separated from the flue gas of a conventional power station by means of an amine-based
Techno-economic assessment
CO2 absorption system. A comprehensive process model has been developed with the support of Aspen Plus tool
to simulate all the plant sections and the overall system. After the process optimization, a detailed economic
analysis – based on capital and operating costs derived from commercial-scale experience and assuming a 20-
year lifetime – has been performed to calculate a levelized cost of methanol (LCoM) of 960 €/t (about 175
€/MWh). The analysis confirms that, today, the technology is still not competitive from the economic point of
view, being LCoM more than double than the current methanol price in the international market (450 €/t).
However, it indicates that the process is expected to become competitive in a mid-term future, as a consequence
of the new European policies. The study also reveals that LCoM is mainly affected by the electricity price and the
electrolyser capital cost, as well as the capacity factor of the plant.

1. Introduction recently proposed for renewable methanol production from municipal

solid waste, sludge, etc. [5,6]. But the increasing deployment of inter­
Methanol (CH3OH, conventionally indicated as MeOH) is today one mittent renewable energy sources (i.e. sun and wind) and the need of
of the most important building blocks in the chemical and pharmaceu­ sustainable fuels for the decarbonization of the so-called “hard-to-abate”
tical industry and in the production of synthetic hydrocarbons [1]. The sectors (mainly industry and heavy transport) is making more and more
worldwide methanol production is about 90 Mt/yr.: most of it (about 65 interesting the possibility to produce methanol from renewable elec­
%) comes from natural gas by means of steam methane reforming, while tricity (e-methanol) and captured carbon dioxide. CO2 hydrogenation –
the remainder (35 %) comes from coal through gasification processes [2, typically operated in fixed-bed catalytic reactor at 250–300 ◦ C and
3]. However, the ever more urgent need for low carbon fuels for the 50–00 bar – is currently the technology with the largest development
energy transition is leading to a growing interest toward methanol perspective at commercial scale [7,8]. Conceptually, renewable elec­
production from renewable energy sources, as proposed in 2005 by tricity is used to produce green hydrogen by water electrolysis, whereas
Nobel prize laureate George A. Olah [4]. Currently, worldwide renew­ CO2 can be captured from concentrated sources (e.g. flue gas from power
able (green) methanol production is neglectable – less than 0.2 Mt/yr. generation or industrial plants) or directly from air.
(some 0.2 % of the total production) – and it mainly comes from biomass The power-to-methanol approach has a double advantage: it allows
gasification [2]. Several advanced processes and technologies have been to store renewable electricity in chemical form and at the same time to

Abbreviations: BEC, bare erected cost; CoM, cost of methanol; CRI, Carbon Recycling International Ltd; EBIT, earnings before interest and taxes; EBITDA, earnings
before interest, taxes, depreciation and amortization; EPCC, engineering, procurement and construction cost; ETS, European emissions trading system; G&A, general
& administrative cost; GME, Italian power exchange management company; IRAP, regional tax on productive activity; IRES, Italian tax on company income; LCA, life
cycle assessment; LCoM, levelized cost of methanol; MEA, monoethanolamine; MeOH, methanol; NPV, net present value; PEM, polymer electrolyte membrane; TASC,
total as-spent cost; TEA, techno-economic assessment; TOC, total overnight cost; TPC, total plant cost.
* Corresponding author.
E-mail address: [email protected] (A. Pettinau).

https://doi.org/10.1016/j.jcou.2022.102345
Received 17 September 2022; Received in revised form 17 November 2022; Accepted 28 November 2022
Available online 5 December 2022
2212-9820/© 2022 The Authors. Published by Elsevier Ltd. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-
nc-nd/4.0/).
S. Sollai et al. Journal of CO2 Utilization 68 (2023) 102345

produce a fully renewable product that can replace the fossil-derived scale (500 kg/h, corresponding to about 4000 t/yr.) modular e-meth­
one. E-methanol and its derivatives are attractive fuels for the trans­ anol production units, designed to chemically store the overproduction
port sector, being extremely clean and able to use the same distribution of renewable and intermittent electricity. In particular, the study con­
and storage infrastructures of the conventional oil-derived transport siders the full process, including CO2 capture and hydrogen production
fuels [9–11]. A LCA study of methanol production reports that CO2 units. As a case study, the plant is assumed to be operated on Sardinia
hydrogenation could reduce the greenhouse gas emissions by 59 %, in island (Italy). The Sardinian electric grid is currently semi-independent,
comparison to the conventional processes [12]. being connected with the mainland through two high voltage direct
CO2 hydrogenation technology for e-methanol production has been current (HVDC) links called SAPEI and SACOI, characterized by a
successfully demonstrated in the George Olah Renewable Methanol maximum power of 1000 MW and 300 MW, respectively. Therefore,
Plant, owned by Carbon Recycling International (CRI) and operating together with electrochemical energy storage, the production of e-
since 2012 in Iceland: it allows to recycle 5500 t/yr. of CO2 from natural methanol represents a promising solution for assuring the stability of the
sources to produce 4000 t/yr. of e-methanol [13]. Moreover, a new electric grid (in terms of frequency control and system resiliency), in
commercial scale plant based on CRI technology – the Shunli CO2-to-­ view of the growth in power generation from sun and wind to replace
methanol plant in China (Henan province) – has been commissioned at fossil fuel (coal and heavy oil) electricity plants.
the end of 2022 [13]. In parallel, one of the most relevant applications of The economic analysis is based on capital and operating costs
e-methanol as transport fuel is given by the Swedish shipping company derived from current commercial-scale applications (considering that
Stena Line, that retrofitted the “Stena Germanica” ferry with methanol most of the components are already available in the market) and it is
engines [14]. These industrial applications of e-methanol technologies, focused on the assessment of the so-called levelized cost of methanol
despite being successful, still represent peculiar situations in which, only (LCoM).
thanks to specific conditions, the production cost is competitive in the
international market. But, in general, e-methanol is, by far, more 2. Plant configuration
expensive than fossil-derived one. A detailed study by the International
Energy Agency [15] indicates a near-term e-methanol production cost The system configuration investigated in this work consists of a
between 120 and 210 USD/MWh; however, in the long-term, the cost is commercial-scale plant for e-methanol production from hydrogen and
expected to decrease to 55–70 USD/MWh, becoming competitive with captured CO2. In particular, green hydrogen is assumed to be produced
the current production cost from fossil fuels (that, in turn, should in­ by water electrolysis powered by wind or solar electricity, whereas
crease significantly as a consequence of CO2 emissions restrictions). The carbon dioxide is separated from flue gas produced in a conventional
long-term decrease of e-methanol production cost is due to a decrease of thermoelectric power station or in an industrial plant through an amine-
electricity price (that accounts for 40–70 % of the whole production based CO2 capture system. Fig. 1 presents a simplified scheme of the
cost) [15]. But a key role is also expected by the optimization of the studied power-to-methanol system and its subdivision in three main
conversion chain – this is the reason why several studies are focused on sections: (i) water splitting into hydrogen and oxygen through a polymer
the development of advanced copper/zinc-based catalysts, specifically electrolyte membrane (PEM) electrolyser, (ii) carbon capture with
optimised for CO2 hydrogenation [16,17] – and especially by the amine-based solvents, and (iii) synthesis and purification of e-methanol
economy of scale generated by the diffusion of advanced electrolysers. through direct CO2 hydrogenation.
For this reason, several studies on techno-economic assessments As mentioned above, the economic performance of this application is
(TEA) and life cycle assessment (LCA) of e-methanol production pro­ site specific, being affected by parameters such as the cost of renewable
cesses have been recently published. Lee et al. (2020) [18] propose electricity, the availability of concentrated CO2 sources, etc. Therefore,
several options to make e-methanol economically feasible, assessing the Sardinia has been considered as a case study for the whole economic
effects of key parameters (i.e. gas hourly space velocity, temperature, analysis. This assumption is conservative in the short period (the elec­
and H2/CO2 ratio) on process performance and presenting an estimation tricity price in Sardinia is currently higher than the Italian and European
of e-methanol costs based on two plant sizes: 0.27 and 100 t per day. Su mean price), but it can make the technology more competitive in the
et al. (2022) [19] present a techno-economic assessment, based on years to come, due to the expected growth of renewable energy
Aspen Hysys model, of a 100,000 t/yr. e-methanol plant compared with production.
conventional fossil-based processes, providing the internal rate of return The conventional technologies commercially available for methanol
of the investment in three different future scenarios, defined as “opti­ production by steam methane reforming have limited their size, for
mistic”, “realistic” and “pessimistic”. Yousaf et al. (2022) [20] report a economic reasons, to a daily production of around 2500 t of methanol,
very detailed Aspen Plus-based simulation of CO2 hydrogenation units, even though the continuous development of catalysts has recently
under different operating conditions, with some discussion of e-meth­ allowed to reach the size of 5000 t per day [27]. Being renewable power
anol production cost. Harris et al. (2021) [21] compare three different generation plants typically distributed in the territory, the plants for
approaches for methanol synthesis – i.e. from syngas from either biomass e-methanol production would find their best application on a
gasification or dry reforming of CO2, and direct CO2-to-methanol via territorial-distributed model based on the local feedstock availability
hydrogenation – with an estimation of current and future methanol (mainly CO2 and renewable electricity). In other words, small and
production cost. Del Pozo et al. (2022) [1] compare different renewable distributed e-methanol units closely integrated with renewable power
and non-renewable methanol synthesis technologies, considering direct generation plants can contribute to the stability of the electric grid. For
air capture as one of the potential options for capturing CO2. Moreover, this reason, as mentioned, this study considers a system designed to
considering that the economic assessments are typically site sensitive, produce 500 kg/h, corresponding to 12 t per day and, considering a
several relevant studies have been published on renewable methanol capacity factor of 0.9, an annual production of 4000 t. It is basically the
production in several countries, such as China [22] and Germany [23]. A same size of the CRI’s George Olah Renewable Methanol Plant in
specific focus on hydrogen and methanol transport costs is provided by Iceland.
Schorn et al. (2021) [24]. Finally, several different plant configurations Since the main focus of this study is the economic analysis of
and sizes are economically assessed by Bellotti et al. [23,25] and methanol production from green hydrogen and captured CO2, this
Rivarolo et al. [26], focusing the attention on the flexibility of e-meth­ chapter only shows a general description of the overall process and a
anol production. brief introduction of the models developed to analyse the processes of
The distinction of this work is a focus on the techno-economic hydrogen production, CO2 capture, and methanol synthesis. Detailed
assessment – which combines a process simulation with Aspen Plus descriptions of these models are presented in previous works [28–31].
and a detailed economic model based on industrial data – of commercial

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S. Sollai et al. Journal of CO2 Utilization 68 (2023) 102345

Fig. 1. Simplified plant lay-out.

2.1. Green hydrogen production developed in Aspen-Plus environment, adapting it from the one devel­
oped by Zhao and Brouwer [37]. The deionized water is pumped and
Green hydrogen needed for the catalytic hydrogenation of CO2 to e- heated up to the PEM operating pressure and temperature. The water
methanol is assumed to be obtained by water electrolysis with a PEM electrolysis reaction is simulated with a RStoic type reactor. The prod­
electrolyser. The main advantages of this kind of technology, as ucts of the process – hydrogen and oxygen – are then separated and
compared to the more conventional alkaline systems, are given by a stored. The main characteristics of the hydrogen production system are
faster cold start-up, a higher flexibility and, consequently, a better reported in Table 1. A technology evolution of PEM electrolysers has
coupling with dynamic and intermittent power generation systems, like also been considered. At the end of their lifetime, the stacks are sup­
renewable energy sources such as sun and wind. PEM electrolysers can posed to be replaced with new ones characterized by better performance
be reversible devices and, with respect to conventional alkaline units, [38]. Moreover, considering that stack performance deteriorates over
are able to operate at lower cell voltages, higher current densities, and time, stack is oversized to assure the required hydrogen production until
higher temperatures and pressures leading to higher efficiencies [32]. the end of its life. The energy and material flows of the system are re­
On the other hand, this technology is currently less mature than the ported in Table 2.
alkaline one and still presents higher costs and a limited lifetime [33]: Globally, more than a thousand of kilograms per hour of deionized
60,000 h at most, after which the electrolytic cell stacks need to be water are required to obtain the desired hydrogen flow rate equal to
gradually replaced due to their degradation [34]. 104 kg/h, leading also to an oxygen production of about 820 kg/h. Such
The power consumption for a megawatt scale electrolysis plant a hydrogen production requires a PEM electrolyser with a power ca­
varies between 4.5 and 7.5 kWh per cubic meter of hydrogen produced pacity slightly lower than 6 MW, since the specific power consumption
[35], equivalent to 50–80 kWh/kgH2. For the environmental impact of is equal to 55.8 kWh/kgH2. In a future perspective, the stack power
the process to be the lowest possible and for the products to be consumption is considered reduced by about 5 %, leading to a specific
considered renewable, the electrolyser needs to be powered with elec­ power consumption of 47.8 kWh/kgH2, that corresponds to a total power
tricity generated with renewable energy sources. As mentioned, in this consumption (including balance of plant) equal to 53.2 kWh/kgH2.
study the electrolyser is considered to be powered with the over­
generation of electricity in Sardinia, i.e. the share of power production
from renewable sources which exceeds the internal needs of Sardinia,
which is currently exported. The electricity exported from Sardinia in
2018 was about 3 TWh [36], about 1.7 TWh of which can be considered Table 1
Main characteristics of the hydrogen production system (elaboration from [38]).
from renewable sources overgeneration. This energy is much higher
than the power requirements of the system in study; however, its actual Stack
availability in the course of the year is widely variable and this issue can Year of installation present future
influence a continuous production with high capacity factor. Therefore, Number of cells in any stack 150 150
the adoption of a temporary hydrogen storage system operating at Active area 700 cm2 700 cm2
Current density 2 A/cm2 3 A/cm2
200 bar has been considered in this study, in order to allow to discon­
Voltage 1.9 V/cell 1.8 V/cell
nect the production of hydrogen from its subsequent use in the Degradation rate 1.5 mV/1000 h 1.0 mV/1000 h
e-methanol synthesis section. The storage system has been sized – as a Stack lifetime 60,000 h 85,000 h
result of a preliminary optimization – to assure hydrogen availability Stack over-sizing to consider degradation 13 % 13 %
even when renewable electricity is unavailable for several hours. This PEM electrolyser
introduces higher capital and operating costs. No oxygen storage has
Water conversion efficiency 90 % 90 %
been considered (oxygen is supposed to be compressed in cylinders and Number of stacks 15 10
sold). Hydrogen production pressure 30 bar 30 bar
To simulate the PEM electrolysis process, a dedicated model has been Operating temperature 80 ◦ C 80 ◦ C

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S. Sollai et al. Journal of CO2 Utilization 68 (2023) 102345

Table 2 Table 4
Energy and material flows of the hydrogen production system. Energy and material flows in the CO2 capture system.
Specific stack power consumption 50.4 kWh/kgH2 Flue gas flow rate 3846 kg/h
Specific balance of plant power consumption 5.4 kWh/kgH2 Separated CO2 flow rate 723 kg/h
Specific total power consumption 55.8 kWh/kgH2 Solvent consumption 1.09 kg/h
Deionized water flow rate 1037 kg/h Electric power required 6.9 kW
Mean hydrogen flow rate 104 kg/h Specific thermal consumption for solvent regeneration 3.46 MJ/kgCO2
Mean oxygen flow rate 821 kg/h Thermal power for the regeneration 697.3 kWth
Unconverted water flow rate 110 kg/h Equivalent missed electric power 116.4 kW
Electrolyser power 5906 kW

Al2O3-type heterogeneous catalysts requiring high temperature

2.2. CO2 capture (200–300 ◦ C) and pressure (50–100 bar) [47,48].
E-methanol is produced by means of CO2 catalytic hydrogenation
In this study, CO2 capture is assumed to be performed by chemical using an adiabatic fixed-bed catalytic reactor. Cu and Zn are reported to
absorption using amine-based solvents. The performance assessment of be the main components of the catalysts, along with different additives
the CO2 capture section has been carried out by using a simulation like Al, Zr, Cr, Si, B, Ga, etc. [49]. Pre-heated hydrogen and carbon di­
model implemented through Aspen-Plus. A stream of flue gas produced oxide are catalytically converted into methanol by means of the CO2
in a conventional coal-fired power plant – with a CO2 concentration of hydrogenation (1), reverse water-gas shift (2), and CO hydrogenation
15 % dry vol. [39,40] – has been considered as reference CO2 source (but (3) reactions [20]:
the process can also be applied in integration with several industrial
processes). The CO2 capture section has been sized for providing the CO2 CO2 + 3H2 ↔ CH 3 OH + H2 O (1)
flow required by the methanol synthesis process (723 kg/h). A CO2
CO + H2 O ↔ H2 + CO2 (2)
capture efficiency of 90 % has been set, as in typical CO2 capture section
based on chemical absorption. Assuming a 90 % removal efficiency from
CO + 2H2 ↔ CH 3 OH (3)
a capture system with 30 % monoethanolamine (MEA) solution [41],
without further process optimization, the energy needed for the amine The process conventionally operates within a temperature range
regeneration – typically between 3 and 5 MJ for each kg of CO2 desorbed between 250 and 300 ◦ C and a pressure between 50 and 100 bar, typi­
[42,43] – is calculated equal to 3.46 MJ/kgCO2. The heat required at the cally using Cu/Zn/Al-based catalysts [4,50,51]. The conversion effi­
reboiler (operating at 1.2 bar) is provided by steam at about 120 ◦ C, ciency is maximized when the reaction operates with an optimal
tapped from the power plant that provides the flue gas to be treated. This stoichiometric ratio M = 2, where M is defined as [1]:
corresponds to a missed power generation of about 0.161 kWh/kgCO2.
[H2 ] − [CO2 ]
The analysis of the CO2 removal system has been carried out under M= (4)
[CO] + [CO2 ]
equilibrium conditions, leading to slightly more optimistic results, since
in the real absorber the process is governed by kinetics. Globally, dif­ The exit stream is then cooled to condense the liquid product (mainly
ferences are almost negligible, so the equilibrium assumption can be methanol and water), which is subsequently sent to a distillation column
considered an acceptable approximation for the aim of this study [44]. for methanol purification; the unreacted gas (mainly H2 and CO) is
Moreover, during the operation of the adsorption system, new recirculated to the reactor, in order to improve the whole conversion
adsorbing solution needs to be introduced periodically, to compensate efficiency. Methanol is then temporarily stored in liquid phase at at­
for the solution deterioration. The solvent consumption is usually in the mospheric pressure and sold to the local utilities as sustainable fuel or
range of 0.5 – 3.0 kg per tonne of CO2 adsorbed [45]. A make-up value of chemical reactant.
1.5 kg/tCO2 has been used in this study [46]. The process has been modelled in Aspen Plus environment [52],
The main characteristics of the CO2 capture system are reported in according to the flowsheet reported in Fig. 2. The main blocks of the
Table 3, whereas the energy and material flows are reported in Table 4. methanol synthesis section are the reactor and the distillation column,
The carbon dioxide exiting the system is considered to be temporarily which are implemented in Aspen Plus through the blocks RPlug reactor
stocked in liquid phase at − 24 ◦ C and 20 bar in a 16.5 m3 tank. These and RadFrac column, respectively. Hydrogen coming from the electro­
conditions allow an autonomy of about 24 h of independent operation of lyser (stream 1 M) and carbon dioxide coming from the capture Section
the capture section from the rest of the plant. (3M) are compressed to 65 bar, which is the pressure required by the
hydrogenation reactor, and mixed with the recirculation of the uncon­
verted gas coming from the reactor (23 M). This mixture (6 M) is heated
2.3. E-methanol production
with heat recovered from the process products exiting the reactor (8 M).
The latter is further cooled, then the unconverted gas is separated from
Nowadays, methanol is mainly produced from syngas using Cu/ZnO/
the liquid phase through two flashes. The unconverted gas (18 M and
21 M), mainly made up of hydrogen and CO2 with traces of methanol,
Table 3
water, and CO, are recirculated back to the reactor. Just a minor portion
Main characteristics of the CO2 capture system.
of about 1 % is purged and flared (19 M) to reduce the accumulation of
Gas to be treated inert and undesired gas in the circuit. This purge flow slightly increases
CO2 concentration 15%vol the CO2 emissions, but its contribution (about 20 kg/h) can be assumed
21.8%wt almost negligible, since it is around 3 % of the overall CO2 captured from
Solvent the flue gas.
Type of solvent MEA
Concentration in aqueous solution 30%wt
The raw methanol (12 M) exiting the separators, still containing
Column of adsorption water and traces of CO2, is heated up to the operating temperature of the
Liquid/gas ratio 4.53 kg/kg distillation column. Here, water is condensed and collected in the bot­
CO2 removal efficiency 90 % tom (16 M). The process optimization, by means of the heat recovered
Solvent make-up 1.5 kg/tCO2
from the process gas in a number of heat exchangers, makes the system
Regeneration column
Thermal vector steam thermally self-sufficient during operation.
CO2 output pressure 1.2 bar The main parameters of the reactor, of the liquid-vapor separators,

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S. Sollai et al. Journal of CO2 Utilization 68 (2023) 102345

Fig. 2. Simplified flowsheet of the methanol synthesis section modelled in Aspen Plus.

and of the distillation column are reported in Table 5, whereas Table 6

Table 6
reports the energy and material flows of the section. The catalyst
Energy and material flows in the methanol synthesis section.
considered is of industrial type: for this kind of catalysts an average
lifetime of at least 4 years has been verified, with 8 years observed in Inlet hydrogen flow rate 104 kg/h
Inlet CO2 flow rate 723 kg/h
some cases [53]. In this study a catalyst lifetime of 4 years has been
Recirculation flow rate 1960 kg/h
adopted. Produced methanol flow rate 500 kg/h
Outlet CO2 flow rate 25 kg/h
Cooling water flow rate 285 kg/h
2.4. Process parameters and performance
Amount of catalyst into the reactor 292.4 kg
Power absorption: hydrogen compressor 39.2 kW
The main process parameters – whose evaluation is essential for the Power absorption: CO2 compressors 49.5 kW
economic assessment – are summarized in Table 7. The consumption of Power absorption: recirculation compressor 14.7 kW
electricity reported in the table is for the first year of operation. The
electrolyser is subject to degradation, so the stack functionality de­
creases over time. To take that into account, an over-sizing of the elec­ Table 7
trolyser has been considered, with a gradual increase of power Process parameters.
consumption to offset stack degradation to keep hydrogen (and there­ Capacity factor 0.9
fore methanol) production constant until the stack is replaced at the end Annual operating hours 7884 h/yr.
of its lifetime. In particular, the degradation considered corresponds to Nominal size (methanol) 500 kg/h
Plant productivity (methanol) 3942 t/yr.
Oxygen production 6473 t/yr.
Table 5 Captured carbon dioxide 5703 t/yr.
Main process parameters for the methanol synthesis section. Hydrogen production 820 t/yr.
Power consumption (PEM, excl. degradation) 45,622 MWh/yr.
Reactor
Power consumption (other users) 2971 MWh/yr
Number of tubes 34 Industrial water consumption (PEM) 8176 t/yr.
Length of the tubes 12.2 m Water consumption (excl. recirculation) 5929 t/yr.
Inner diameter of each tube 37.5 mm Solvent consumption (CO2 capture) 8555 kg/yr.
Void fraction 0.4 Catalyst consumption (reactor) 73 kg/yr.
Reactor volume 0.458 m3 Nitrogen consumption 7884 kg/yr.
Type of catalyst Cu/Zn/Al
Catalyst density 1775 kg/m3
Catalyst lifetime 4 years an increase of energy consumption of 360 Wh/kgH2 per each year of life
Operating pressure 65 bar
for the starting stacks, and of 239 Wh/kgH2 per year of life for the
Inlet temperature 210 ◦ C
Outlet temperature 290 ◦ C replaced stacks, on the basis of the values previously reported in Table 1.
Liquid-vapor separators
Operating conditions of the first separator 50 ◦ C 3. Economic assessment
65 bar
Operating conditions of the second separator 22 ◦ C
An economic analysis of the plant depends on a number of key fac­
1.2 bar
Raw methanol composition out of the second separator 48.7%v MeOH tors, e.g. the size and the technology of each component. All the plant
49.4%v H2O costs (capital and operation) have been evaluated from commercial
Distillation column plant data available in literature, adjusted, where needed, to consider
Operating pressure 1.01 bar
inflation, assumed at an annual rate of 1.33 %, as the mean value in
Operating temperature 80 ◦ C
Composition of distillate 96.4%v MeOH
Europe for the period 2015–2019 [54], assuming that the most recent
3.6%v CO2 data are not significant due to the Covid-19 pandemic effects. All costs

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S. Sollai et al. Journal of CO2 Utilization 68 (2023) 102345

are expressed in Euros (€), considering – when original values were in U. Table 8
S. dollars ($) – an exchange rate of 0.82 €/$ (mean monthly value in Specific costs of the storage systems.
January 2021) [55]. Gas Pressure State Volume Specific cost
3
H2 storage 200 bar gaseous 23.0 m 45 €/Nm3
3.1. Capital costs CO2 storage 20 bar liquid 16.5 m3 8500 €/m3

Capital costs have been mainly taken from the literature in terms of
specific costs or actual costs. The latter have been adapted to the plant Finally, indirect capital costs have been calculated as a percentage of
size considered in this paper by means of the well-known equation: BEC: 8 % for engineering, procurement and construction, 15 % for
( )f project and process contingencies, 2 % for site preparation and 15 % for
C = C0
P
(5) permit fees [60].
P0
3.1.2. Total overnight cost
where C and C0 represent the cost of the component for the plant With reference to the previously described plant configuration, TOC
assessed in this study and for the reference plant discussed in the liter­ is summarised in Table 9, whereas a detail of BEC is shown in Fig. 3.
ature, respectively. P and P0 are the comparison parameters for those As Fig. 3 shows, more than 50 % of BEC is due to the electrolyser –
plants (the nature of which depends on the type and size of plant), and f confirming what reported in several studies [20,23,26] – whereas the
is a dimensionless scaling factor [23]. methanol synthesis section accounts for just 12 %.
The calculation of capital costs follows the classification proposed by
the U.S. National Energy Technology Laboratory [56]. In particular, 3.1.3. Investments during the operation phase
bare erected cost (BEC) considers the process equipment and the sup­ Some further investments during plant life have also been consid­
porting facilities (material cost), as well as direct and indirect labour for ered, related to the scheduled replacements of the electrolyser stacks
plant installation; engineering, procurement and construction cost (initially characterized by an operating lifetime of about 60,000 h) and
(EPCC) also considers the costs for EPC contractor services; total plant of the gas compressors (with a lifetime of 10 years). While the com­
cost (TPC) also includes process and project contingencies; the addition pressors are based on a mature technology that is not subjected to any
of pre-production costs, inventory capital, financing costs and other expected future performance and cost improvement, PEM electrolysers
owner’s costs indicates the so-called total overnight cost (TOC); finally, technology is evolving rapidly. For this reason, for the replaced stacks,
total as-spent cost (TASC) includes TOC and the additional costs derived operating parameters and costs differ from those of the starting year. In
from escalation and interest on debt during capital expenditure period. particular, a future specific stack cost of 117.21 €/kW and a total specific
system cost of 311.48 €/kW have been assumed, with an additional 15 %
3.1.1. Cost estimation of total PEM cost accounted for the new stack, and a higher expected life
A specific material cost of 542.05 €/kW (of which 309.48 for the (i.e. 85,000 h) [38]. A last stack replacement (4.29 % of the total PEM
stack, and 123.07 and 109.49 for mechanical and electrical balance of cost [38]) during the 18th year of plant life has been assumed.
plant, respectively) has been assumed for the PEM electrolyser’s
equipment, with a 12 % surcharge to consider direct and indirect labour 3.1.4. Financial assumptions
for plant installation [38]. Overall, the bare erected cost of the PEM Table 10 summarises the main financial assumptions considered for
electrolyser is 5486 k€, with additional 440 k€ required to replace the this study, that considers one year (2023) for plant construction and 20
stack in 2030 and further 126 k€ to refurbish the stack on the 18th year years of operation.
(this further investment is required to make the electrolyser available A depreciation plan with a rate of 10 % (10 yearly constant undis­
until the end of the plant operating lifetime). counted instalments) is considered, applied to all the plant, except for
The material cost of CO2 capture and methanol synthesis systems the stack of the PEM electrolyser. As mentioned, the stack is charac­
have been adapted from Bellotti et al. (2017) [23], using a scaling factor terized by an initial depreciation period estimated in 7 years (60,000 h),
(f, see Eq. 5) of 0.65 [23]. whereas the new and more mature stack expected to be installed in 2030
As for H2, CO2 (up to 20 bar) and O2 compressors (oxygen is com­ is assumed to have a longer life (85,000 h, with a depreciation of 10
pressed and stored in pressurized bottles for selling), the following for­ years). A further depreciation period of 10 years is still considered when
mula has been used to determine their equipment cost: the original compressors will be replaced at the end of their lives.
C = C0 • (ṁ • lnβ)0.65 (6) The starting investment for the plant construction is considered
covered for 75 % with a bank loan (senior debt), with a 10-year
where C is the cost of each compressor, C0 is a base parameter which refunding period with constant interest rate of 6.14 % [61]. This
depends on the type of gas processed by the compressor (equal to assumption involves significant financing costs (financing fees, interests
36,856, 2651, and 2327 for H2, CO2 and O2, respectively), m˙ is the mass
flow rate (kg/h) elaborated by the machine, and β is the compression Table 9
ratio (6.5 for H2 and O2 and 4.47 for CO2) [57]. CO2 is stored in liquid Overnight cost estimation.
phase at 20 bar, but a further compression up to 65 bar is carried out by
Cost (k€)
a pump to reach the pressure required by the methanol synthesis system.
The cost of the pump is calculated as [58]: - PEM electrolyser 5486
- CO2 capture section 1361
/ - Gas compression systems 2191
C = 1.417 • 106 • (WP 1000) + 0.09 • 106 (7) - Gas storage systems 348
- Methanol synthesis system 1230
where C is the pump cost and Wp is the pump power (in kW). A 10 % Bare erected cost (BEC) 10,615
- Engineering, procurement and construction 849
surcharge has been considered for all the equipment costs for
Engineering, procurement and construction cost (EPCC) 11,465
compression and pumping to consider direct and indirect labour for the - Project and process contingencies 1592
installation of the machines. Total plant cost (TPC) 13,057
As for H2 and CO2 temporary storage systems (as mentioned, oxygen - Site preparation 212
is directly stored in bottles for selling), the specific costs have been - Permit fees 1592
Total overnight cost (TOC) 14,861
derived from Van Leeuwen (2018) [59] and summarises in Table 8.

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S. Sollai et al. Journal of CO2 Utilization 68 (2023) 102345

Table 12
Fixed O&M costs.
Annual cost

Labour 211 k€/yr.

General and administrative 42 k€/yr.
Property taxes and insurance 297 k€/yr.
Maintenance (excluding compressors) 253 k€/yr.
Maintenance (compressors) 88 k€/yr.

hours per year at a hourly cost of 40 €). General and administrative

(G&A) expenses are assumed as 20 % of personnel cost [67], whereas
property tax and insurance are assumed 2 % of TOC [68]. Finally,
maintenance cost is assumed as 2 % of TOC for the compressors [59] and
3 % of TOC for all the other equipment [50].
Fig. 4 represents both variable (a) and fixed (b) O&M costs of the
project.
Fig. 3. Bare erected cost. Taxes are also considered within the operating costs. They are
applied every year of operation to income, decreased by depreciation
and bank loan interests. In Italy taxes are represented by IRES (national
Table 10
tax on company income, with a rate of 24 %) and IRAP (regional tax on
Main financial assumptions.
productive activity, assumed 2.93 % of the income). A total rate of 26.93
Plant construction time 1 year (2023) % has been used for taxes [69].
Plant operating lifetime 20 years
Inflation rate 1.33 %
Discount rate 8% 3.3. Revenues
Depreciation time (electrolyser stack) 7 years
Depreciation time (rest of plant) 10 years
Senior debt refunding period 10 years The main source of revenues for the plant is from e-methanol sales.
Plant value at end of lifetime 0€ The current market value for fossil-derived methanol is around 450 €/t
Financing loan amount 75 % of TPC [70], which is used to calculate the project’s cash flow, although it
Interest rate of loan 6.14 % should be noted that methanol prices have strongly increased in recent
years.
and so on) that have a significant impact on the project’s operating Apart from e-methanol, the oxygen obtained during water electrol­
performance; however, it makes this study closer to actual industrial ysis is also a product with a market value. In this study, it is considered
projects [62]. to be compressed to 200 bar, stocked in cylinders and sold at 150 €/t,
Finally, an annual discount rate of 8 % (representing the typical representing a typical market value for these volumes of industrial ox­
value for investments in the energy intensive industry sector) has been ygen without storage and transport [57]. The market price of CO2,
assumed to convert the expected future value of costs and profits in its determined by the European Union’s emissions trading system (ETS) is
current value [63]. The discount rate is not applied to the bank loan also considered. It represents an important cost for conventional plants
interests. without CO2 capture systems. In the plant configuration analysed in this
study, CO2 is captured from the flue gas of a conventional power plant,
which would otherwise need to purchase emission credits to cover the
3.2. Operation and maintenance costs CO2 emitted. Consequently, the emission credit value has been consid­
ered positively in the evaluation of the plant profitability. An emission
The operation and maintenance (O&M) costs have been calculated credit value of 80 €/tCO2 has been assumed in the starting year of
year by year from literature data, adjusting the yearly values with operation (corresponding to the average ETS value in the first half of
inflation. The main variable operating cost is given by electricity: its 2022) [71]. In consideration of the growing restrictions on emissions in
value has been estimated on the basis of the mean zone price of Sardinia future years, this starting value has been assumed to increase with time
in 2018 (the last period for which aggregated data are available). The to a value of about 129 €/tCO2 in 2030 (with an annual increasing rate
plant is assumed to operate 7884 h/yr. (corresponding to a capacity from today’s value of 7.05 %) and 212 €/tCO2 in 2040 (annual increasing
factor of 0.9). rate from 2030 of 5.10 %) [72].
The main specific variable costs are reported in Table 11 [50,64–66], The expected revenues from oxygen and e-methanol sales (the latter
as well as the actual costs referred to the first year of plant operation. calculated with reference to the current market price) and from the CO2
Apart from the variable operating costs, some fixed O&M costs are emission credits are summarized in Table 13 with reference to the first
also to be considered, as listed in Table 12, again with reference to the year of operation.
first year of operation.
In particular, personnel cost has been assessed considering 3 plant 3.4. Economic performance indicators
operators with an annual cost of about 70,000 €/yr. (1760 working
The analysis here reported follows two complementary approaches,
Table 11 i.e. the investment profitability approach, where the project’s net pre­
Variable operating costs. sent value (NPV) is calculated by the annual cash flow, having fixed the
Specific cost Annual cost Reference market price at which methanol is sold, and the levelized cost of
Electricity 57.8 €/MWh 2809 k€/yr. [64] methanol (LCoM) approach, where the selling price of methanol is
Deionized water 10 €/m3 59 k€/yr. [65] calculated in order to achieve a NPV equal to zero. In other words, LCoM
Solvent (MEA) 1.90 €/kg 16 k€/yr. [66] is the price at which methanol should be sold to reach break-even at the
Catalyst 95.24 €/kg 7 k€/yr. [50] end of plant lifetime. In particular, with reference to the whole life of the
Nitrogen 0.2783 €/kg 2 k€/yr. [65]
project (including construction and operation), cost of methanol (CoM)

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S. Sollai et al. Journal of CO2 Utilization 68 (2023) 102345

Fig. 4. Variable and fixed O&M costs.

the revenue from oxygen selling, E is the cost saving from CO2 emissions
Table 13
credits, P is the annual methanol production and r is the discount rate.
Revenues in the first year.
Oxygen 971 k€/yr.
4. Results and discussion
Methanol 1774 k€/yr.
CO2 emission credits 456 k€/yr. As mentioned, the economic performance has been assessed on the
Total 3202 k€/yr.
basis of both investment profitability and LCoM approaches. The first
indicates the conventional profitability of the investment. The second
is the algebraic sum of all the cost (capital and operating) and revenues indicates how the market should evolve to make the technology feasible
of the plant, divided by the whole amount of methanol produced. from the economic point of view.
However, in order to take into account the depreciation (a discount rate
of 8 % has been assumed in this study), the analysis considers LCoM,
4.1. Investment profitability
conceptually similar to CoM, but based on the present values of costs and
revenues, instead of the future values. LCoM can be calculated by means
Having fixed the e-methanol selling price (450 €/t), it is possible to
of the following equation:
calculate the annual cash flow, shown in Fig. 5 with reference to the
∑
20
(CCt +OCt )−(ROt +Et ) present values (with a discount rate of 8 %). For each year of plant life,
(1+r)t
the algebraic sum of income (e-methanol and oxygen sales) decreased by
LCoM = t=0 ∑20 (7)
Pt
t=0 (1+r)t
the capital and operating costs determines the so-called earnings before
interest, taxes, depreciation and amortization (EBITDA), from which the
where, for year t (t = 0 during construction period and 1 ≤ t ≤ 20 dur­ so-called earnings before interest and taxes (EBIT) is obtained after
ing the operation period), CC is the actual investment for the year depreciation is deducted. Taxes are therefore calculated from EBIT
(corresponding to TASC for t = 0 and to the investments during opera­ decreased by the bank loan interests, but only applied if this value is
tion for t > 0), OC is the total (variable and fixed) operating cost, RO is positive. The fiscal year result is finally obtained subtracting the taxes
and the mortgage capital instalment.

Fig. 5. Cash flow (present values).

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S. Sollai et al. Journal of CO2 Utilization 68 (2023) 102345

During the first 10 years of plant operation, the annual cash flow is the comprehensive study on CO2 utilization published in 2019 by the
negative and decreasing, mainly due to the loan instalments. Starting International Energy Agency (IEA) [15], e-methanol price should
from the eleventh years, profits slightly exceed costs, making the cu­ decrease from 530 to 950 €/t in the near-term (100–170 €/MWh, where
mulative cash flow almost constant. What it is important to notice it that the range depends on the cost for capturing CO2 used as a feedstock) –
the net present value (NPV) – i.e. the cumulated sum of the discounted which is in line with LCoM value reported above – to 250–310 €/t
cash flow of each year – is − 21,000 k€. Such a negative value clearly (45–60 €/MWh), to be compared with the current methanol marked
indicates that the technology is still far from competitiveness, in price of 450 €/t (82 €/MWh) considered in this paper.
particular if e-methanol is sold at the same market price of fossil-derived The assessment of the investment and operation costs considered in
methanol. this study is based on reliable data (most derived from commercial
NPV is significantly affected by the behaviour of the market, in experience), for all the main plant’s components. However, as the sys­
particular of methanol and CO2, the latter-assumed to be governed by tem of this study is a complex plant with limited industrial maturity, and
the European ETS, whereas e-methanol is assumed to be sold at the same especially considering the quick change of the market for low-carbon
price of the fossil-derived methanol. Fig. 6 shows the combined effect of products, some uncertainty may persist on some of the parameters. A
both these prices on NPV, which is positive only for very high prices of sensitivity analysis has therefore been considered in order to evaluate
methanol and CO2. The price of CO2 here refers to its initial value, with the effect of possible variations of those parameters on the economic
the same growth rates discussed above). performance of the plant.
This outcome fully confirms the general results of other studies [15], Fig. 8 shows the main results of the sensitivity analysis, where a
that indicate that e-methanol is still far from being competitive with the variation of a number of parameters in a range of ± 10 % of their
fossil-derived one, so this kind of investment is currently not profitable. reference values has been applied. The parameters considered in this
analysis are: (i) the e-methanol selling price, (ii) the oxygen selling price,
(iii) the electricity price, (iv) the value of ETS CO2 emission credits, (v)
4.2. Levelised cost of methanol
the total capital cost, (vi) the fixed operating costs, and (vii) the plant
capacity factor (number of hours of annual operation). In order to
The previously discussed cash flow analysis is based on the
simplify the reading of the results, this analysis has been carried out
assumption that e-methanol is sold at the current market price of fossil-
fixing the e-methanol price at 960 €/t, which is the LCoM for which NPV
derived methanol. A complementary analysis involves the levelized cost
is equal to zero; then, NPV variation have been determined
of methanol (LCoE), defined above by Eq. (7), which is the price at
consequently.
which methanol should be sold to get a null NPV at the end of the plant
As Fig. 8 shows, the e-methanol selling price, the electricity cost and
lifetime, as shown in Fig. 7.
the plant capacity factor are the parameters which have, by far, the most
Keeping unchanged all the other parameters, the LCoM is 960 €/t.
impact on the investment profitability. And it is important to underline
This value is more than double the current market value for methanol
that, considering the quick evolution of the energy market, the elec­
(450 €/t), confirming that power-to-methanol is not yet competitive for
tricity price is one of the most uncertain variables for this kind of project.
industrial-scale production of renewable fuels from captured carbon
A decreasing of capital investment can be expected in the following
dioxide, compared to a traditional system. However, it should be noted
years due to the growing commercial maturity of the electrolysers that,
that the methanol market is continuously growing and increasing de­
as shown in Fig. 3, accounts for more than 50 % on the whole invest­
mand may support a higher price in the future. A further price increase
ment. Just a minor impact is expected from oxygen selling price, fixed
of fossil-derived methanol is also expected due to an increase in the cost
operating costs, and the price of ETS credits. As a matter of fact, even if
of CO2 emission credits. On the other hand, a decrease in e-methanol
the direct impact of ETS credits on NPV is lower than that of other
price could occur as a consequence of the development and diffusion of
variables, the upward trend in their price will raise the cost of fossil-
commercial-scale units (in particular for the electrolysers). According to

Fig. 6. Effects of methanol and CO2 price on NPV.

9
S. Sollai et al. Journal of CO2 Utilization 68 (2023) 102345

Fig. 7. Cash flow (present values) to achieve NPV = 0.

€/MWh), the number of operating hours would be limited to 2000 at

most, with a corresponding LCoM greater than 2000 €/t.

5. Conclusions

The combined need to chemically store renewable electricity – with

the aim of enabling a wide deployment of intermittent energy sources –
and to improve the production of sustainable fuels for the decarbon­
ization of “hard-to-abate” sectors is making the power-to-fuels concept
one of the most promising approaches to support energy transition to­
wards carbon neutrality. Among the electrically-derived fuels (e-fuels)
e-methanol is particularly interesting for the wide variety of its potential
use, directly as a fuel or as a building block for a number of chemical
Fig. 8. NPV variation (in k€) corresponding to a ± 10 % variation of processes.
some parameters. The comprehensive approach followed in this techno-economic
assessment – which starts from the Aspen Plus modelling of the whole
derived methanol, making e-methanol (and, in general, e-fuels) more plant (including green hydrogen production and carbon capture) to
competitive with the corresponding fossil-derived fuels. provide process parameters to set a detailed economic analysis based on
The LCoM value corresponding to a variation of the number of hours commercial data – allows to quantify the economic performance of the
of plant operation, and the resulting mean electricity cost, have also integrated system.
been estimated. The average electricity cost has been calculated cross- From the technical point of view, the plant has been sized to produce
checking the 2018 hourly district electricity price for Sardinia sup­ 4000 t/yr. (500 kg/h, with a capacity factor of 0.9) of e-methanol and
plied by GME (the Italian power exchange management company) [73] 6500 t/yr. of oxygen as by-product, using 820 t/yr. of green hydrogen
with the Sardinian electricity production provided by Terna (the Italian (produced from about 46 GWh/yr. of renewable electricity) and
transmission system operator) [74]. The results are shown in Fig. 9. avoiding the emission of about 5700 t/yr. of carbon dioxide.
With the increase of plant operation, the average electricity cost Such a plant requires an initial investment of about 15 M€, more than
increases and the LCoM decreases with a nearly linear trend above a half (52 %) of which is due to the electrolyser (PEM – polymer elec­
4000 h/yr. In particular, with the considered capacity factor of 0.9 (to trolyte membrane – technology) for green hydrogen production. Simi­
which corresponds an operation of 7884 h/yr.) and an electricity price larly, the cost of electricity accounts for about 75 % of operating costs.
of 58 €/MWh, a LCoM of 960 €/t is obtained. It also results that, if the Under current market conditions, e-methanol production is far from
plant is operated only when electricity is at low cost (lower than 40 being competitive with the conventional methanol production from
fossil fuels (i.e. natural gas and coal), that today costs about 450 €/t.
Assuming that e-methanol is sold at this price, the investment is not
profitable, with a negative net present value (NPV) of about 21 M€. On
the other hand, a levelized cost of methanol (LCoE, representing the
price at which e-methanol should be sold to have NPV equal to zero) of
960 €/t has been calculated, more than double of the current market
price for fossil-derived methanol.
A sensitivity analysis has been performed to underline the effect of
several key parameters on the economic performance of the investment.
Apart from methanol price (the most impacting parameter), the price of
electricity and the operating capacity factor are particularly relevant in
terms of economic impact on the technology.
Finally, the application of the proposed technology can be expected
to become profitable in a mid-term timeframe (2030–2035) thanks to
the combined effect of (i) commercial price increasing of renewable
Fig. 9. LCoM variation with plant operation and electricity cost.

10
S. Sollai et al. Journal of CO2 Utilization 68 (2023) 102345

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Stefano Sollai: Methodology, Formal analysis, Investigation, [16] M. Mureddu, F. Ferrara, A. Pettinau, Highly efficient CuO/ZnO/ZrO2@SBA-15
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Francesca Ferrara: Conceptualization, Writing – review & editing, jcou.2020.101433.
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Supervision, Project administration. Alberto Pettinau: Conceptualiza­ methanol synthesis from renewable H2 and captured CO2: How can power-to-liquid
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Declaration of Competing Interest and high-tech strategy for sustainable production: A case study of methanol
production from CO2 hydrogenation, International Journal of Hydrogen Energy, IN
The authors declare that they have no known competing financial PRESS, https://doi.org/10.1016/j.ijhydene.2022.01.124.
[20] M. Yousaf, A. Mahmood, A. Elkamel, M. Rizwan, M. Zaman, Techno-economic
interests or personal relationships that could have appeared to influence analysis of integrated hydrogen and methanol production process by CO2
the work reported in this paper. hydrogenation, Int. J. Greenh. Gas. Control 115 (2022), 103615, https://doi.org/
10.1016/j.ijggc.2022.103615.
[21] K. Harris, R.G. Grim, Z. Huang, L. Tao, A comparative techno-economic analysis of
Data Availability
renewable methanol synthesis from biomass and CO2: opportunities and barriers to
commercialization, Appl. Energy 303 (2021), 117637, https://doi.org/10.1016/j.
Data will be made available on request. apenergy.2021.117637.
[22] Y. Gu, D. Wang, Q. Chen, Z. Tang, Techno-economic analysis of green methanol
plant with optimal design of renewable hydrogen production: a case study in
Acknowledgements China, Int. J. Hydrog. Energy 47 (2022) 5085–5100, https://doi.org/10.1016/j.
ijhydene.2021.11.148.
This work has been funded by the Italian Ministry of Ecologic [23] D. Bellotti, M. Rivarolo, L. Magistri, A.F. Massardo, Feasibility study of methanol
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gramme, research plan 2019–2021 (CUP: I34I19005780001). The au­ [24] F. Schorn, J.L. Breuer, R.C. Samsun, T. Schnorbus, B. Heuser, R. Peters, D. Stolten,
thors are grateful to Dr. Mauro Mureddu (Sotacarbo) for his very useful Methanol as a renewable energy carrier: an assessment of production and
transportation costs for selected global locations, Adv. Appl. Energy 3 (2021),
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