Long-Term Hydrocarbon Trade Options for the Maghreb Region and Europe—Renewable Energy Based Synthetic Fuels for a Net Zero Emissions World

Mahdi Fasihi, Dmitrii Bogdanov and Christian Breyer
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Mahdi Fasihi: School of Energy Systems, Lappeenranta University of Technology, Skinnarilankatu 34, 53850 Lappeenranta, Finland
Dmitrii Bogdanov: School of Energy Systems, Lappeenranta University of Technology, Skinnarilankatu 34, 53850 Lappeenranta, Finland
Christian Breyer: School of Energy Systems, Lappeenranta University of Technology, Skinnarilankatu 34, 53850 Lappeenranta, Finland

Sustainability, 2017, vol. 9, issue 2, 1-24

Abstract: Concerns about climate change and increasing emission costs are drivers for new sources of fuels for Europe. Sustainable hydrocarbons can be produced synthetically by power-to-gas (PtG) and power-to-liquids (PtL) facilities, for sectors with low direct electrification such as aviation, heavy transportation and chemical industry. Hybrid PV–Wind power plants can harvest high solar and wind potentials of the Maghreb region to power these systems. This paper calculates the cost of these fuels for Europe, and presents a respective business case for the Maghreb region. Calculations are hourly resolved to find the least cost combination of technologies in a 0.45° × 0.45° spatial resolution. Results show that, for 7% weighted average cost of capital (WACC), renewable energy based synthetic natural gas (RE-SNG) and RE-diesel can be produced in 2030 for a minimum cost of 76 €/MWh HHV (0.78 €/m 3 SNG ) and 88 €/MWh HHV (0.85 €/L), respectively. While in 2040, these production costs can drop to 66 €/MWh HHV (0.68 €/m 3 SNG ) and 83 €/MWh HHV (0.80 €/L), respectively. Considering access to a WACC of 5% in a de-risking project, oxygen sales and CO 2 emissions costs, RE-diesel can reach fuel-parity at crude oil prices of 101 and 83 USD/bbl in 2030 and 2040, respectively. Thus, RE-synthetic fuels could be produced to answer fuel demand and remove environmental concerns in Europe at an affordable cost.

Keywords: hybrid PV–Wind; power-to-gas (PtG); power-to-liquids (PtL); liquefied natural gas (LNG); economics; fuel-parity; Maghreb region; Europe (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (27)

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