Business Model for Power to Gas/Liquids - Potentials ... · Business Model for Power to Gas/Liquids...

Business Model for Power to Gas/Liquids - Potentials, Challenges and Uncertainties

11/28/13 Wolfgang Verdegaal - sunfire GmbH slide 1

01. Company Facts and partners 02. Potential: Production methods for renewable CO2-based fuels 03. Challenge: Road-to-Market 04. Uncertainty: Politics, Markets and Willingness-to-Pay 05. Control Power: Enhanced Business Model

Content

11/28/13 Business Model for Power to Gas/Liquids - Wolfgang Verdegaal - sunfire GmbH

slide 2

PtL Demo Plant Fuel1 Start-up in 2014

11/28/13 Power-to-Liquids as a new Energy Option / Wolfgang Verdegaal - sunfire GmbH

Power-to-Liquids as a new Energy Option

11/28/13

Who is sunfire? Company facts & partners

slide 4 Business Model for Power to Gas/Liquids - Wolfgang Verdegaal - sunfire GmbH

Management and company facts

11/28/13

Senior Management

Carl Berninghausen (CEO), EBS, Karibu, Thermea, e.a. Christian v. Olshausen (CTO), TU Dresden, P&G, Daimler Fuel Cells

Dr. Oliver Posdziech TU Dresden, EBZ

Björn Erik Mai TU Berlin, Webasto, staxera

Mario Heinrich HTW Dresden, Audi, staxera

Fuel Systems

Dietmar Rüger TU Dresden, Choren Industries

Nils Aldag EBS, Desertec Foundation

Business Administration Business Development Stacks

Employees 53 (47 engineers and technicians, 6 business graduates)

Infrastructure Test environment for stacks, systems and PtL & PtG

History sunfire founded in 2010 (staxera 2005), staxera merged into sunfire in 2012, Bilfinger entry in 2012

The sunfire team has developed one of the most robust and cost competitive SOFC-stacks.


Sales & marketing

Cooperation Bilfinger/sunfire – a perfect fit for PtL & PtG

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Core engineering

Core compo-nents

•  Commissioning-support •  Operation- and optimizing-support •  Core components for maintenance and

repair

General contractor

Construc-tion

•  Maintenance •  Technical engineering •  Modifications, upgrades,

updates

Decom-missioning

Invest Operation Desinvest

Corporate sales & marketing but individual focus on core competencies

sunfire: Engineering & core components

Bilfinger: General contractor & construction Business Model for Power to Gas/Liquids - Wolfgang Verdegaal - sunfire GmbH


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An enormous Potential: PtL & PtG based on High Temperature Steam Electrolysis


Patented efficiency advantage

Hydrogen

Water

Syngas

Hydrocarbons

Steam and CO2

CO2 Waste heat

Electr. Power (100%)

LT Electrolysis (PEM, Alkaline)

Steam

High Temperature Steam Electrolysis increases the process efficiency significantly. PtL: 50% à 70%, PtG: 55% à 80% (approximate values, based on LHV)

slide 8 11/28/13 Business Model for Power to Gas/Liquids - Wolfgang Verdegaal - sunfire GmbH

Patented efficiency advantage

Hydrogen

Water

Syngas

Hydrocarbons

Steam and CO2

CO2

Heat recovery (16%)

Electr. Power (84%)

HT-Elektrolysis (SOEC)

Steam

High Temperature Steam Electrolysis increases the process efficiency significantly. PtL: 50% à 70%, PtG: 55% à 80% (approximate values, based on LHV)

slide 9 11/28/13 Business Model for Power to Gas/Liquids - Wolfgang Verdegaal - sunfire GmbH

Production method Power-to-Liquids

11/28/13 slide 10

sunfire‘s Power-to-Liquids process consists of three components: SOEC (Solid Oxide Electrolysis Cell), RWGS-conversion and fuel synthesis

RWGS-Conversion

CO2+H2à CO+H2O

Fuel Synthesis

2H2 + CO à -CH2- + H2O

Hydrocarbon Fuels High present economical potential

SOEC

H2O-Steam H2O

Business Model for Power to Gas/Liquids - Wolfgang Verdegaal - sunfire GmbH

Production method Power-to-Gas

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Methanation is a relatively simple process. The increased efficiency due to the SOEC is still applicable. However, the economical potential of SNG is lower than for synthetic liquid fuels due to the cheap and still long time available natural gas.

SOEC Sabatier-Process

CO2 + 4 H2

à CH4+ 2 H2O

SNG

H2O-Steam

Simple Nickel-catalyst

No complex product separation

H2O


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A challenging process: sunfire’s Road-to-Market

slide 12



Road-to-Market or “How to overcome the Valley of Death”

11/28/13 slide 13

Spec. costs of SOCs

Production volume

R&D (SOFC & SOEC)

Small demo projects (e.g. Callux)

PtL- & PtG- demonstration CHP & PtG CHP, PtG & PtL

Offgrid SOCs (e.g. telecom)


Road-to-Market Strategy and timeline

11/28/13

Power-to-Liquids Power-to-Gas Gas-to-Power Markets microCHP Off-grid smallCHP Chemicals Storage Fuels

1-2.5 kW >2.5 kW >25 kW >10 MW >2 MW >50 MW

2013 2014 2015 2016 …

Field test Pre-commercial & market entry

R&D project (Storage / Chemicals / Fuels)

Demonstration & commercialization

Power-to-Gas and Liquids (SOEC)

SOFC


PtL Demo Plant Fuel1 Storage / Chemicals / Fuels

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R&D project

• Construction of a Power-to-Liquids pilot plant targeting the verification of the chemical process & the development of a SOEC prototype

• Government-funded by Federal Ministry of Education and Research • Project costs: € 12m (sf: € 8m)

• Project duration: May 2012 - June 2015 (start of operation in 2014)

Project consortium

Power-to-Liquids demo plant Fuel1 in Dresden


Groundbreaking for demo plant at 22nd of July 2013 & construction progress after three months.

PtL Demo Plant Fuel1 Storage / Chemicals / Fuels

11/28/13 Business Model for Power to Gas/Liquids - Wolfgang Verdegaal - sunfire GmbH


11/28/13

Still uncertain: Markets & Willingness-to-Pay


Aviation

Markets for PtG and PtL

11/28/13 slide 18

PtG PtL

Products

Markets

SNG Methanol

Gasoline/ Diesel Kerosene

Waxes

Production method

Energy storage

Traffic

Premium fuels

Quota fuels Chemical

industry


Power-to-Liquids Willingness-to-Pay vs. cost

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0.00 0.02 0.04 0.06 0.08 0.10 0.12 0.14 0.16 0.18 0.20

SNG -‐ Quota Fuel

Gasoline/ Diesel -‐ Quota Fuels

Wax -‐ Chemical Industry

Kerosine -‐ AviaGon

€ / kWh

Willingness-‐to-‐Pay

ProducGon Cost

Willingness-to-Pay currently uncertain

Fourfold Quota

Fourfold Quota F. P.

The willingness to pay for sunfire-fuels is clearly higher than 0.10 €/kWh(LHV). The reason is the obligatory addition of renewable fuels to fossil ones with respect to 2009/28/EG – as well as the intended fourfold crediting of PtX-fuels to this quota (see source at the bottom).

Source of proposed amending: http://ec.europa.eu/clima/policies/transport/fuel/docs/com_2012_595_en.pdf

Mandatory renewable fuel addition

Mandatory renewable fuel addition

Fossil Portion Fourfold Quota



11/28/13

Control Energy Market: Enhanced Business Model for PtL and PtG


Control Energy

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20

40

60

80

GW Consumption

Generation

Control Energy is used to compensate temporary differences between consumption and generation of electricity.

Positive Control Energy

Negative Control Energy


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Call for Bids Minimum Offer Activation Time

Primary Control Energy weekly 1 MW < 30 seconds automated

Secondary Control Energy weekly 5 MW < 5 minutes automated

Minute Reserve daily 5 MW < 15 minutes partly automated

Types of control Energy

Primary Control Energy

Secondary Control Energy

Minute Reserve

30 s 5 min 15 min

Order of Activation

Control Energy


Source of information www.regelleistung.net

Control Energy

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Demand-Rate Auction for Secondary Control Energy


Source of Data: www.regelleistung.net

0

50

100

150

200

250

300

350

400

450

€ / MWh_el

Offert Minute Reserve (Summation) in MW

Highest „Called“ Price

25 MW for 130 €/MWh

0 500 1000 1500 2000

2500

400

300

200

100

0

Needed Pool of available minute reserve

Summation of offered Secondary Control Energy MWh_el

02.07.2013 Seite 24

100%

Plant Capacity

Up to 30%

Plant Capacity

70 - 100%

Plant Capacity

An enhanced Business Model for the “Energiewende”: PtL and PtG as economical Control Reserve


PtL, PtG

Negative Control Energy

Synthetic Liquid Fuels

Synthetic Natural Gas

Electricity Stock Market

Production Costs Earnings


11/28/13 slide 25

0 20 40 60 80 100

0 20 40 60 80 100

U(liza(on of PtL plant in posi(ve control mode [%]

Annu

al Profit [€

/MW_el]

U(liza(on of PtL plant in CH2 produc(on mode [%]

CH2 -‐ Gewinn

Regel. -‐ Gewinn

CH2 Profit

Control Profit



The generally positive effect of PtL and PtG for 1. A robust electricity grid and hence supply 2. 100% renewable primary energy supply in all other CH-based energy sectors also enables the plant to increase its total economical profit.

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0 20 40 60 80 100

Annu

al Profit [€

/MW_el]


Gesamt -‐ Gewinn

∑

0 20 40 60 80 100

0 20 40 60 80 100

U(liza(on of PtL plant in posi(ve control mode [%]

Annu

al Profit [€

/MW_el]


CH2 -‐ Gewinn

Regel. -‐ Gewinn

Optimum at approx. 70 %

CH2 Profit

Control Profit

Total Profit


Thank you for your attention

11/28/13

sunfire GmbH Gasanstaltstraße 2 01237 Dresden Germany

T +49 (0) 351 89 67 97 0 F +49 (0) 351 89 67 97 831 [email protected]


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