Power-to-X to play key role in accelerating the energy transition

4 min read

21 Jan 2021

Text

Paul Golden

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Wärtsilä

4 min read

21 Jan 2021

Text:

Paul Golden

Photo:

Wärtsilä

There is a great deal of interest in how the Covid-19 pandemic has impacted the development of Power-to-X technologies and the hydrogen economy, but it is no longer possible to dismiss the technology as an over-hyped concept.

Saara Kujala leads business development at Wärtsilä Energy and has with her team modelled over 150 power systems around the world. She recognises the growing role of Power-to-X technologies in the energy transition towards 100% renewable energy.

How do you see the role of hydrogen as a future fuel?

Hydrogen can be used as a fuel ‘as is’ in many applications,  but as importantly, it is the basic building block for other carbon-neutral synthetic fuels that are needed in the decarbonisation of energy production. Power-to-X technologies can be used to produce green hydrogen, but also synthetic methane, methanol, ammonia, kerosene, gasoline, and diesel.

The hydrogen economy vision is to use green hydrogen as a fuel for industry, power generation, heat, and transportation. It will also be used as a raw material for production of other synthetic, carbon-neutral fuels for easier storage, and to avoid investments in hydrogen infrastructure. In future renewable energy systems, hydrogen and other carbon-neutral synthetic fuels can replace, for example, gasoline as a transport fuel or natural gas as fuel for power generation.

The hydrogen economy will stimulate economic growth and create new jobs as new carbon neutral fuels - including hydrogen - start to replace fossil fuels.

To what extent can current infrastructure be utilised for Power-to-X fuels?

Pure hydrogen will need new infrastructure - such as pipelines, storage, hydrogen-ready engines and gas turbines, and hydrogen cars - which will take time to design and deploy. Other Power-to-X fuels can be used in existing infrastructure and are therefore faster to implement and to make a contribution to accelerating decarbonisation. However, the production cost of other Power-to-X fuels is higher due to the number of process steps compared to hydrogen.

Is there significant market potential for Power-to-X fuels?

The potential is enormous. Environmental targets need to be achieved quickly and Power-to-X fuels can accelerate decarbonisation in all sectors. As more and more countries are drafting their plans for a carbon neutral society, measures need to be taken to find alternatives to fossil fuels in transportation, industry and the power sector. Power-to-X processes can supply the fuel required in a carbon-neutral manner and as such have market potential across all these sectors.

If the world was built today to run on 100% renewable electricity, the optimal capacity mix would include some 900 GW of Power-to-X conversion capacity, producing enough synthetic methane to be utilised in flexible, engine-based power plants for seasonal back-up and system reliability. The Atlas of 100% Renewable Energy, which Wärtsilä Energy launched in the spring of 2020, discusses this in more detail.

From an economic point of view, how feasible are Power-to-X fuels?

The economic viability of Power-to-X fuels is driven by three main factors. Firstly, availability of low-cost renewable electricity is crucial as Power-to-X processes require renewable electricity as raw material. Secondly, in order to become competitive, there needs to be a fast cost decline of process equipment.

There is a lot of potential for cost reduction for the key process equipment, but to get the industry started, investment subsidies are needed for early projects. Thirdly, demand for synthetic fuels need to be created through regulations mandating renewable fuel usage. Simultaneously a price increase for fossil fuels through taxation and higher CO2 emission costs would be needed to reduce the cost gap between fossil fuels and synthetic fuels.