How A Technology From Iceland Is Fighting Climate Change

A small company in Iceland has developed innovative technology to convert cheap power and carbon dioxide into fuel.

My recent story — Fuel From Thin Air — highlights efforts to do the latter. These efforts are mostly at an experimental stage.

Recycling Carbon Dioxide

But some companies are using carbon dioxide that would otherwise be emitted to the atmosphere. That is the case with the company I met with in Iceland. Carbon Recycling International (CRI) utilizes electricity and carbon dioxide emissions from the country’s geothermal plants to produce methanol, which they produce and sell into the European fuel market. Their product is trademarked as Vulcanol.

I met with Benedikt Stefánsson and Ómar Sigurbjörnsson from CRI to learn more about the company’s technology. Here is how it works.

Geothermal steam is used to produce electricity, and as it does so the water vapor condenses into liquid water. The steam contains about 2% carbon dioxide, but after the water has been removed the remaining gases are around 90% carbon dioxide. That carbon dioxide might otherwise be vented into the atmosphere.

To be clear, the carbon footprint of geothermal power is extremely low, but would be even lower if that carbon dioxide vent could be avoided.

Carbon dioxide can be converted into a wide variety of products, but that requires two things. One is energy. Carbon dioxide is a stable, low-energy molecule, and the carbon-oxygen bonds require energy to break.

But hydrogen is also needed. Most of the world’s hydrogen is produced from natural gas, but it can be produced by passing electricity through water. This process is called electrolysis, and it breaks water down into its constituent elements — hydrogen and oxygen.

The laws of thermodynamics necessarily require that more energy is input into the process than is obtained in the form of hydrogen, but there are circumstances that enable this to economically work.

Some may note that if the methanol is going into the fuel market, that carbon dioxide will still eventually be produced. That is true, but because the carbon dioxide is recycled prior to being vented it would lower the net emissions from burning the fuel.

However, if the methanol is instead used in the plastics industry, then the carbon dioxide could be sequestered for a much longer period.

The Economics

The key to the process is cheap power. I was told that about 70% of the cost of production in a commercial plant would be determined by the cost of power. We can do a quick bit of math to determine what the price of power would need to be to make this process work.

One megawatt-hour (MWh) is equivalent to 3.4 million British thermal units (Btu). The efficiency of the process of electricity to fuel is about 50%. One gallon of methanol contains 56,800 Btu, so 1 MWh is equal to about 30 gallons of methanol.

According to Methanex — the world’s largest producer of methanol and an investor in CRI — the current price of methanol is about $1.50/gallon. Thus, 1 MWh could produce about $45 worth of methanol. If energy is 70% of the overall cost, then the break-even cost for power would need to be less than around 70% of $45, or $31.50/MWh (in the absence of incentives).

The levelized cost of energy (LCOE) for geothermal is about $50/MWh, according to the Energy Information Administration. Solar photovoltaic (PV) power is projected to approach that level in a few years, and wind power costs are projected to fall to $23/MWh in some locations by 2025.

However, even today there are times that countries like Germany and states like California produce so much excess power that the price drops below zero. In such cases, that excess power could be dumped into hydrogen production and storage — the primary energy consumer in such a plant.

Further, this places no value at all on the externalities (greenhouse gas emissions). If we place a value on the lower net emissions of this fuel — which is why we provide preferential treatment in the U.S. to biofuels — then the economics improve. If, for example, methanol was provided similar treatment to cellulosic ethanol for its greenhouse gas emission abatement, it would more than double the value of the methanol produced from each MWh of power.

A Plant in Operation

An important note here about this process is that it isn’t just theoretical, and it doesn’t merely exist at the laboratory scale. CRI has an operating demonstration plant with a capacity of about 4,000 metric tons of methanol per year. It is located next to the Svartsengi Power Station, which produces 150 MW of thermal energy for the district heating and up to 75 MW for electricity power. I visited both the CRI methanol plant and the Svartsengi Power Station during my trip. The power plant provides both electricity and a carbon dioxide source for CRI’s methanol plant.

The CRI process could work in any location with cheap power and a source of carbon dioxide. If there are available incentives for producing renewable fuel (as is the case in many countries), the process would be viable in even more locations.

This is exactly the kind of technology that the world needs to help combat the rising tide of carbon dioxide emissions.

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