mokphi part 2 draft01

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AN EVALUATION OF THE POTENTIAL PROFITABILITY OF MONETIZING

CHEAP SOLAR ENERGY THROUGH THE PRODUCTION OF CHEMICAL FUELS

Robert Zubrin, Mark Berggren and Tony MuscatelloStudy Done for Mok Industries by Pioneer Astronautics

March 9, 2004

IntroductionMok Industries has developed a new concept that could potentially enable the production of solarelectricity at very low costs. One option for monetizing the electricity produced by such systemsis to use it to produce chemical fuels for sale on the existing market. While it could be arguedthat income could also be generated by such systems through direct sale of electricity, the twomarkets are not exclusive. Indeed, while more income can be produced per kilowatt generatedthrough sale as electricity than as fuel, the size of the market for fuels is much larger than that forelectricity. The profit potential of a method of producing electricity could therefore be greatlyincreased if it could also be used to produce fuels at marketable prices. Furthermore, using solarenergy to produce fuels avoids the principle problem solar energy systems encounter inproducing electricity for direct consumption, in that the periodic non-availability of sunlight due

to night or weather is not a significant issue. In addition, the need for transmission lines from thesolar power generation site is eliminated, allowing the site to be located far from urban areaswhere land may be expensive and solar illumination conditions far from ideal. It could provevery difficult to profitably produce solar electricity near London, for example. But a solarpowered fuel generation system could sell its products to consumers anywhere in the world. Ittherefore makes sense to investigate the potential profitability of fuel production using the novelMok photovoltaic system. For this reason, Mok contracted with Pioneer Astronautics to studysuch possibilities, first with analysis, and then with experimental demonstration. The analyticalphase, representing the first six weeks of the 3-month study effort is presented in Part I of thisreport. In Part II, which begins on page 8, we present the results of the experimental phase.

PART I. ANALYSIS OF POTENTIAL COMMERCIAL PROFITABILITY

Options Considered

The options considered under this study included examining the use of Mok photovoltaicsystems (MPVS) to produce a variety of chemical fuels, including methane (CH 4), methanol(CH3OH), ethanol (C2H5OH), benzene (C6H6), propane (C3H8), and synthetic oil. The hydrogennecessary to form these compounds in all cases was assumed to come from water. The carbonfeedstock was assumed to come from either CO2 or coal. In the analysis performed, CO2 wasassumed to be available for zero cost, but with no subsidy. (Actually, recovery of CO 2 from fluegas using current technology can cost about $30/ton. The goal of technologies underinvestigation is to reduce the recovery cost to about $3/ton CO2. Subsidies for taking CO2 off thehands of industrial facilities may be available in the future, but are not established now.) Coalwas assumed to be available for $30/tonne ($0.03/kg). Coal prices vary, and may drop to$0.02/kg or rise to $0.04/kg, but since the price of all the fuels considered is at least $0.20/kg, thepotential ~$0.01/kg variation in the price of coal was not considered of significant importance.

Production Methods

The production methods for each of the fuels considered are described below.


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Reactions (5) and (7) are both exothermic and can be performed at pressures of about 20 bar at250 C on copper on zinc oxide catalyst. Reaction (6), known as the Reverse Water Gas Shift ismildly endothermic, but can be done using a copper on alumina catalyst at 400 C. All threereactions have modest equilibrium constants (~0.1) so that recycle loops are required to achievehigh yields. The advantage of using reaction (5) is that only a single reactor is required. The

advantage of using a two stage system employing separate reactors to do reactions (6) and (7) isthat pure methanol is produced, so that no subsequent distillation step is needed to separate thewater from the methanol. In both cases, 6 hydrogen atoms are needed to produce one methanolmolecule.

If coal is available, we can first perform reaction (2) to produce one CO and one H2, and thenadd one H2 to proceed with reaction (7). Thus, only two hydrogen atoms would be needed toproduce one methanol. The availability of coal thus cuts the need for electrolytically producedhydrogen to produce methanol by a factor of three.

It will be observed that if one employs reaction (2) twice, and then discards one of the CO

molecules, if it possible to produce a molecule of methanol using no electrolytically producedhydrogen at all. The trade here is the difference in cost between 6 kg of coal and 1 kg ofhydrogen, plus the extra process costs to perform reaction (2). If coal costs $0.03/kg, and isplentiful, this means that hydrogen costs need to be less than $0.18/kg + reaction (2) processingcosts (say ~ $0.22 kg/total) to make electrolytic production of hydrogen to more profitable wayto proceed. Mok industries estimates that their system can achieve a hydrogen production cost of$0.073/kg, corresponding to an electricity cost of $0.00175/kWh. If this goal is achieved, thenthe use of coal combined with electrolytic production of hydrogen is the most profitable option.If electricity costs from the Mok system should exceed triple this estimate (i.e. prove greater than$0.004/kWh), then, provided coal is plentiful, the use of coal alone would be more profitable. Ofcourse, if coal supplies are limited, then the break point for switching from combined photo-hydrogen/coal based methanol production to only-coal based system would occur at a higherelectricity price.

EthanolEthanol may be produced from CO2 by running reaction (6) twice to produce 2CO, and thencombining this with hydrogen in accord with:

2CO + 4H2 => C2H5OH + H2O (8)

Between the two runs of reaction (6) and reaction (8), we see that twelve hydrogen atoms areneeded to make one ethanol molecule from CO2.

If coal is available, we can run reaction (2) twice to produce 2CO + 2H2, and then add 2H2 toperform reaction (8). In this case four hydrogen atoms would be needed to make one ethanol.

It should be noted that reaction (8) has been performed experimentally, but is not the methodused to produce ethanol commercially. If requires high pressures, and has low yields, withsubstantial methanol impurities generated. It may thus be considered a more difficult synthesisreaction to perform than (7).


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the process. Overall, the difficulty of the reaction is comparable to (10). Hydrogen requirementsas a percentage of product weight would be similar to those needed to make propane; however,the price of oil per unit weight is lower than propane, making the potential profit margins perunit produced lower.

In Table 1, we summarize the features of the potential fuel products discussed above.

Table 1. Summary of Fuel Production Characteristics.

CO2 Feed Coal FeedFuel Price/kg

H2 /kg Income/kg H2 H2 /kg Income/kg H2

Ease of Synthesis(A=Easy;D=Hard)

Methane $0.22 0.5000 $0.44 0.2500 $0.88 A

Methanol $0.24 0.1875 $1.28 0.0625 $3.84 B

Ethanol $0.30 0.2609 $1.15 0.0869 $3.45 C

Benzene $0.50 0.3846 $1.30 0.0769 $6.50 C

Propane $0.40 0.4545 $0.88 0.1818 $2.20 D

Oil ($30/bbl) $0.20 0.3750 $0.53 0.1500 $1.33 D

On the basis of the results Table 1, the two most favorable options appear to be benzene andmethanol, both with coal as the feedstock. Benzene has the highest income/kg hydrogen utilized,while methanol has the highest income/hydrogen ratio for the simpler production options.

The data in Table 1 does not include any coal costs, however. In Figures 1 and 2 we show theincome to cost ratios for all of the fuels, with coal costs fixed at $0.03/kg and electricity costsvarying from $0.002/kWh to $0.010/kWh. We note that this varies the cost from slightly over theMok photovoltaic target electricity production cost of $0.00175/kWh to almost six times that

amount. The purpose of varying the price in this way is to test the robustness of the business planagainst the contingency that electricity costs prove to be higher than the target price. Note thatincome values do not include any potential benefit from the sale of oxygen co-produced withhydrogen.

Figure 1 shows how the income/cost ratio, as defined above, varies if the feedstock is CO2. Fig 2shows how the ratio varies if the feedstock is coal.

It can be seen that regardless of whether CO2 or coal is chosen as the feedstock, the two mostpromising options are benzene and methanol. If the Mok photovoltaic electricity target price of~$0.002/kWh is met the income/cost ratio for both methanol and benzene using either CO 2 orcoal as feedstock is about the same, with values between 13 and 14. However, if the actual costof Mok photovoltaic-generated electricity should be twice that anticipated, i.e. $0.004/kWh, thenthe income/cost ratio for both methanol and benzene using CO2 feed would fall to ~6.5, whilebenzene produced from coal would have a ratio of 11.5 and methanol from coal would be about10. This trend towards advantage for the coal option increases further should an even higherprice for MPVS electricity be assumed.


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We thus can see that the use of coal in place of CO2, while offering no advantages if the targetelectricity price is achieved, makes the business plan much less sensitive to a higher achievedprice.

Profit from CO2

0

2

4

6

8

10

12

14

0.002 0.003 0.004 0.005 0.006 0.007 0.008 0.009 0.01

electricity cost $/kWh

income/cost

CH4

CH3OH

C2H5OH

C6H6

C3H8

oil ($30/bbl)

Fig. 1, Income to Cost ratio for producing various fuels from using MPVS assuming a range of

electricity costs and CO2 for carbon feedstock.

Profit from Coal

0

2

4

6

8

10

12

14

16

0.002 0.003 0.004 0.005 0.006 0.007 0.008 0.009 0.01

electricity cost $/kWh

income/cost

CH4

CH3OH

C2H5OH

C6H6

C3H8

oil ($30/bbl)

Fig. 2, Income to Cost ratio for producing various fuels from using MPVS assuming a range of

electricity costs and coal for carbon feedstock.


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In the analysis presented in Fig.1 and 2, we do not include other costs, including plant, labor, andequipment for the chemical processing, rent or purchase of land, interest, legal costs, advertising,taxes, management salaries, and dividends. If we assume these costs are equal to the hydrogenand coal costs, and we desire a 100% markup on product between our production cost (including

all the above) and actual sale price, then the condition required for satisfactory company profitwould be that the income/cost ratio, as defined in Figs 1 and 2 exceed 4.0.

It can be seen that if the target MPVS electricity price of $0.002/kWh is met, then all optionsfulfill this condition. However if CO2 is used as the feedstock, then methane and oil fail as viableproducts should the MPVS price exceed $0.003/kWh, and propane fails at $0.0045. The twomost promising products, methanol and benzene would remain profitable unless the MPVS priceexceeded $0.0065/kWh, over three times the baseline target.

If coal is assumed as a feedstock, adequate profit margin would be preserved for methanol andbenzene production until the MPVS price reached $0.014 and $0.018 respectively, seven to nine

times the Mok estimated target price for the photovoltaic electricity output.

It should be noted that the use of coal adds process complexity to the system, as all coals containimpurities, some of which, such as sulfur, can act as strong catalyst poisons. These impuritiesand other ash need to be removed before the CO produced in reaction (2) can be used insynthesis reactions such as (3), (7), (8), or (10). Technology to do this exists, but it does add cost.Therefore conservative planning might demand an income/cost ratio of 5.0 for the coal fedoptions, as compared to 4.0 for the CO2 fed options. That said, the coal fed options remain lesssensitive to electricity cost than the CO2 fed options, remaining strongly profitable even underconditions where the MPVS cost is six times that currently anticipated by Mok industries.

Part I Conclusion:

We conclude that, provided that the Mok photovoltaic system can be made to produce electricityat anything approaching its design cost, plans for using this technology to produce chemical fuelscould be extremely profitable.


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PART II: TESTING OF BRASSBOARD METHANE PRODUCTION UNIT

As per contract with Mok, this phase 1 program also included a first order brassboarddemonstration of one of the options considered for MPVS fuel production, specifically, theconversion of CO2 to methane via the Sabatier reaction (Equation (1)). Provided the Mok system

produces electricity at the design price of ~$0.002/kWh, this reaction alone is sufficient toproduce an income to cost ratio of about 5:1 for the MPVS system. However, if this reaction isused as the first stage of a system that produces benzene via reaction (9), the income to cost ratiojumps to 14:1 at the Mok system design electricity price. Furthermore, by employing using coalas a means of cutting hydrogen production requirements in half (i.e. equation (2)), the income tocost ratio for the MPVS will remain above 7:1 even if the actual cost of electricity of the Moksystem should exceed the design cost by a factor of 5.

Accordingly, as a first critical step in technical validation of this system, a methane productionreactor was constructed and tested. The reactor consisted of a 300 cc stainless steel vessel, filledwith ruthenium-on-alumina catalyst. This reactor was raised to temperatures in the 400 C range

using electrical heat tape, after which flow would be initiated. Once flow was underway, reactionwould commence. This would release sufficient thermal energy to maintain reactor temperature.Thus once startup had been achieved, no further electrical power for heating would be required..

Results of Methane Reactor ExperimentsExperiments were conducted to determine the effects of operating parameters such as flow,pressure, temperature, and H2:CO2 ratio on conversion and carbon monoxide generation. In oneset of tests, the effect of temperature on conversion was determined using a stoichiometric 4:1molar H2:CO2 ratio at 1.1 bar absolute pressure. Conversions of up to 89 percent were obtained.Figure 3 shows the results. (Note; 0.63 SLPM of stoichiometric 4H2/CO2 gas equals a mass flowrate of 18 gm/hour).


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60

70

80

90

100

300 350 400 450 500 550 600

Temperature (oC)

HydrogenConversion,%

Figure 3. Effect of Sabatier Reactor Temperature on Conversion

(0.63 SLPM Feed Rate; 80% H2/20% CO2; 1.1 Bar Absolute Pressure)

The results in Figure 3 show that maximum conversion takes place in the temperature range of

about 350 to 400o

C at lower flow rates. The effect of temperature at double the flow is shown inFigure 4. This is the maximum flow measurable by the mass flow meters in a one-passconfiguration on the brassboard. The results show a slightly diminished conversion at higherflow rate, but still greater than 82-83 percent over a temperature range of 350 to 450oC.


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60

70

80

90

100

300 350 400 450 500 550 600

Temperature (oC)


0.63 SLPM Feed 1.26 SLPM Feed

Figure 4. Effect of Sabatier Reactor Temperature and Flow Rate on Conversion

(80% H2/20% CO2; 1.1 Bar Absolute Pressure)

The effect of operating pressure on conversion was measured over a temperature range of 350 -

450

o

C at a flow rate of 1.26 SLPM. As shown in Figure 5, conversion is noticeably improved athigher operating pressures up to the maximum 3.8 bar absolute pressure tested. These limiteddata suggest that maximum conversion is obtained at slightly lower temperatures as pressure isincreased.


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80

85

90

95

340 360 380 400 420 440 460

Temperature (oC)


1.1 bar abs 1.8 bar abs 2.8 bar abs 3.8 bar abs

Figure 5. Effect of Sabatier Reactor Temperature and Pressure on Conversion

(1.26 SLPM [36 gm/hr] Feed; 80%H2/ 20%CO2).

Ideally, the Sabatier reactor produces only methane and water at 100% conversion per pass.

However, a small amount of byproduct gases can be produced along with desired reactionproducts. One byproduct gas of interest is carbon monoxide. In some cases, a small amount ofcarbon monoxide in feed gas to a downstream benzene production system is desirable to promotelongevity of the catalyst. However, greater amounts of CO should be avoided to prevent build upin the system and potential coking by disproportionation. Figure 6 shows the effect oftemperature on CO generation in the Sabatier reactor. At a stoichiometric 4:1 molar H2:CO2 feed,the carbon monoxide concentration ranges from a low of 0.3 0.4 percent at 350 - 400oC to ahigh of nearly 2 percent at 550oC (the highest temperature tested).


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0.0

0.5

1.0

1.5

2.0

300 350 400 450 500 550 600

Temperature (oC)

Volume%C

OinProductGas

0.63 SLPM; 1.1 bar abs





Figure 7. Effect of Sabatier Reactor Temperature, Flow, and Pressure

on Carbon Monoxide Production (80% H2/20% CO2).

Additional experiments were conducted to determine the effect of the H2:CO2 feed ratio onconversion in the Sabatier reactor. Pioneer Astronautics experience has shown that if it is desired

to use the Sabatier reactor as the first step in a benzene production system, then hydrogen-richenvironment is desired in the Sabatier system to minimize the concentration of CO2 in the outletstream. Table 2 summarizes the results obtained when feeding the Sabatier reactor at variousH2:CO2 ratios.

Table 2. Effect of Inlet Gas H2:CO2 Ratio on Sabatier Outlet Gas Composition

(0.1 SLPM CO2; 0.8 Bar Absolute Pressure; ~380oC).

Outlet Gas Composition (volume %)Inlet H2:CO2

Ratio

CO2

Conversio

n

(%)

H2 CO CH4 CO2

4.0:1 87.1 30.1 .92 60.1 8.85

5.0:1 98.5 51.9 .67 46.7 0.72

5.5:1 100.0 59.4 .75 39.9 0.00

6.0:1 100.0 65.8 .59 33.7 0.00


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The results show that the CO2 concentration can be eliminated by operating at higher H2:CO2ratios. The extra hydrogen needed to keep the Sabatier reactor hydrogen rich does not need to beproduced and then wasted. Instead, it can be recycled using a hydrogen permeable membraneand a recycle pump. However, from an operational standpoint, extremely high hydrogenconcentrations are to be avoided to prevent an excessive load on the membrane and recycle

pump. Therefore, only the amount of excess hydrogen required for nearly complete CO2conversion should employed.

In summary, the Sabatier reactor performed consistently with per-pass conversions generally inthe 80-90 percent range using a stoichiometric feed. CO2 conversion rates of essentially 100%could be achieved by raising the input H2/CO2 ratio to 5.5:1. CO by product production can bekept to less than 1%. This does not represent a problem, since if it present in natural gas it will beburned along with the rest of the fuel, and if instead the Sabatier reactor is being used to feed abenzene production system it will have negligible effect. Any excess hydrogen that is not caughtby the membrane and recycled will also not hurt a benzene production system, as Pioneerexperience has shown that up to 10% hydrogen is in fact desired in the feed of such systems to

prevent coking.

Part II Conclusion:

The use of Sabatier reactors convert CO2 to methane at near 100% efficiency using hydrogenreactant is technically feasible.

OVERALL STUDY CONCLUSION

Based on both the commercial analysis and the experimental work done with the Sabatiersystem, we see no reason why cheap hydrogen made available at the currently projected Mokdesign price could not be profitably converted in methane fuel. If a second step is added totransform the methane so produced into benzene, profit could be achieved even if the actual costof MPVS electricity should exceed current Mok estimates by a factor of five. An alternativeprocess that produces methanol is also quite promising.

mokphi part 2 draft01

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