Electrofuels for the transport sector: A review of production costs

Electrofuels (also called power-to-gas/liquids/fuels or synthetic fuels) are potential future carbon-based fuels produced from carbon dioxide (CO2) and water using electricity as the primary source of energy. This article assesses the production cost of electrofuels through: (i) a literature review, focusing on which steps that have the largest impact as well as the greatest uncertainty; (ii) a more comprehensive review, including the costs and efficiencies for the separate production steps, and (iii) calculations to compare the production costs of the different fuel options in a harmonized way, including a sensitivity analysis of the parameters with the greatest impact on the total electrofuel production cost. The assessment covers: methane, methanol, dimethyl ether, diesel, and gasoline. The literature review showed large differences among the studies and a broad range of production cost estimates (10–3500 €2015/MWhfuel), which is first and foremost as a result of how authors have handled technology matureness, installation costs, and external factors. Our calculations result in productions costs in the range of 200–280 €2015/MWhfuel in 2015 and 160–210 €2015/MWhfuel in 2030 using base cost assumptions from the literature review. Compared to biofuels, these estimates are in the upper range or above. Our results also show that the choice of energy carrier is not as critical for the electrofuels production cost as technological choices and external factors. Instead the two most important factors affecting the production cost of all electrofuels are the capital cost of the electrolyser and the electricity price, i.e., the hydrogen production cost. The capacity factor of the unit and the life span of the electrolyser are also important parameters affecting that production cost. In order to determine if electrofuels are a cost-effective future transport fuel relative to alternatives other than biofuels, the costs for distribution, propulsion, and storage systems need to be considered.

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