Power-to-X: Unit economics
Why e-fuels cost several times fossil fuel, and falling
What this tab covers What it costs to move a unit of energy this way: capital and operating costs, tariffs, utilisation and how it compares with the alternatives.E-fuels cost several times as much as fossil fuels, because each tonne needs 10-35 MWh of electricity plus costly electrolysers and synthesis plant. Electricity is the largest cost, and the CO2 source can be a second big one.
Key costs
| Measure | Value | Note |
|---|---|---|
| E-kerosene, optimised large plant today | 80 (about 3,500 per tonne) USD/GJ1 | About 4-5 times today's fossil jet fuel; assumes strong solar and wind and cheap biogenic CO2 |
| E-kerosene, 2030 with cheaper electrolysers and power | 50 (2,150 per tonne) USD/GJ1 | Still 2-3 times fossil jet |
| E-methanol and e-ammonia, 2030 | 35 (700/t) and 30 (550/t) USD/GJ1 | |
| E-kerosene, ICCT | 8.78 US and 12.44 EU (2020); 4.03 US and 6.72 EU (2050) USD per gallon (2020 USD)2 | 400 MW plant; output 40% kerosene, 40% diesel (ICCT 2022 study) |
| Electrolyser capex assumed | 2,000 today; 800 by 2030 USD/kWe1 | Synthesis, syngas and refinery about USD 1,200/kWe; 5% WACC, 25 years |
| CO2 from direct air capture | 125-335 for a large plant built today (IEA 2022); 400-670 in 2030 expert estimates used for e-fuels USD/t CO217 | The ranges differ in method; biogenic CO2 is USD 20-30 |
| Electricity per tonne of e-ammonia / e-methanol / FT syncrude | about 10.2 / 11.5 / 36 MWh per tonne (calculated at 55 kWh/kg H2)16 | Includes the IEA's plant electricity use |
Where the money goes
| Item | Share or amount |
|---|---|
| Electricity | USD 25-35 per GJ of fuel at USD 50/MWh, which is 50-70% of a USD 50/GJ e-kerosene cost (calculated)1 |
| Electrolyser, synthesis and refinery capital | Most of the remainder; electrolyser maintenance 1.5% and synthesis maintenance 3% of capex a year1 |
| CO2 feedstock | USD 30-80/t in IEA cases; DAC would add USD 550-920 per tonne of methanol (calculated)1 |
Worked example: e-methanol (calculated). One tonne needs 0.19 t of hydrogen and 1.38 t of CO2. At 55 kWh/kg of hydrogen (source 6), plus 1,100 kWh for compression and distillation (source 1), that is about 11.5 MWh. At USD 50/MWh, electricity alone is about USD 575 per tonne, close to the IEA's whole 2030 estimate of USD 700/t, which assumes better electrolysers. CO2 from fermentation at USD 30/t adds about USD 40. CO2 from air at USD 400-670/t would add USD 550-920, more than doubling the cost. Early plants therefore sit next to biogenic CO2, and cheap power and high running hours decide where Power-to-X is built.
Sources
- The Role of E-fuels in Decarbonising Transport (revised January 2024) International Energy Agency, 2024
- Current and future cost of e-kerosene in the United States and Europe International Council on Clean Transportation (ICCT), 2022
- Technical Targets for Proton Exchange Membrane Electrolysis US Department of Energy, Hydrogen and Fuel Cell Technologies Office, 2023
- Direct Air Capture 2022: Executive summary International Energy Agency, 2022