SNG Worked Example for the TEA Guidelines for CO2 Utilization

Abstract

To meet the high demand for natural gas globally, synthetic natural gas (SNG) can be produced as a substitute for natural gas derived from fossil fuels. Nevertheless, the traditional SNG production process is highly carbon-intensive. In the framework of the Power-to-Gas concept, production of SNG can occur via hydrogenation of CO2, which can be captured from industrial sources. As a result, the reliance of SNG production on fossil fuels can be reduced and, subsequently, associated CO2 emissions can be controlled. The goal of the present study is to assess the technical viability and economic feasibility of producing SNG via CO2 hydrogenation. Additionally, to prepare for integrating the techno-economic analysis (TEA) with a life-cycle assessment (LCA), the challenges and pitfalls of such integration are also discussed. The TEA in this study was carried out mainly from a research & development perspective. The production cost for SNG based on carbon capture and utilization (CCU) is estimated and key cost drivers are identified. The combined indicator of CO2 abatement cost is also estimated as a quantitative indicator for assessing the TEA and LCA results. The methanation plant is assumed to be located next to an iron & steel plant in Germany, from which the CO2 feedstock for producing SNG is by means of MEA-based chemical absorption technology, while the hydrogen (which is produced via electrolysis using surplus electricity) is purchased from a production facility located 250 km away. The output capacity of the methanation plant is 148 MW. Aspen Plus software was used for process modelling and data were taken from the literature. Through discussions, it was found that setting the system boundaries was a central challenge for aligning the TEA and LCA. While LCA tends towards encompassing the full life cycle of products (cradle-to-grave or -gate), it is not necessary to include the upstream and downstream processes to conduct a TEA in the present study. The information on upstream processes is reflected in the characteristics of the input flows entering the product system. Setting identical system boundaries for TEA and LCA would require solving problems of multi-functionality, which can be very challenging for TEA when the market for the products to be analyzed is still uncertain. To align inventories, the relevant environmental parameters (e.g., CO2 emissions) should be documented in addition to the technical and economic parameters. For calculating CO2 abatement cost, system expansion can be used to account for the reduced CO2 emissions, or the CO2 feedstock can be regarded as negative emissions. The results show that the SNG production cost for the analyzed product system is 0.0748 €/MJ and the minimum selling price is 0.271 €/kWh. The production cost is more than 10 times greater than that of the benchmark product (coal-based SNG). The selling price of SNG produced by the proposed system is also significantly higher than that of natural gas in the German market. The CO2 abatement cost, as a combined indicator of TEA & LCA, was calculated as 0.75 €/kgCO2. Sensitivity analysis reveals that the hydrogen purchase price represents the most significant uncertainty for the analyzed system. At a 95% confidence interval, the estimated production cost ranges between 0.065 and 0.173 €/MJSNG. Current legislation of the European Union Emissions Trading Scheme (EU ETS) is found to be inapplicable to the product system investigated. Thus, the analyzed CCU system cannot benefit from the emissions trading scheme. To drive CCU-based SNG forward in the future market, it is essential to reduce the production cost of hydrogen.