After analyzing the theoretical capacity of E-fuels to reduce carbon emissions in the transport sector, let’s analyze the difficulties that E-fuels are facing that prevent their rapid deployment in the transport sector, especially in the maritime and air sectors.
E-fuels are very energy intensive
A very high dependence on electricity
Currently, E-fuels consume a very large amount of electricity before they are commercialized. Electrolysis of water, in particular, consists of using a powerful electric current to break down water into gas. Similarly, CO2 capture units (CSS) are sometimes required to make production completely carbon neutral. As a result, the electricity requirements are enormous if this type of fuel is widely adopted.
In Europe, the substitution of fossil fuels by electrofuels would require a 1.5-fold increase in total electricity production. This is a real challenge, not only in terms of electricity generation but also for the electricity networks.
The need for low-carbon energy
These very high electricity requirements are all the more problematic as electrofuels will have to be powered by low-carbon energy. Indeed, if the electricity came from fossil fuels, these fuels would lose all interest in decarbonizing transportation. However, based on the current electricity mix, these fuels would emit more CO2 emissions than conventional fuels.
The challenge will therefore be to significantly increase the generation of electricity from renewable energy sources (RE). This will pose problems in terms of conflict of use with end consumers and land availability. It should be noted that the surplus production linked to the intermittency of renewable energies cannot be sufficient to supply the electrolysers.
The importance of water in the production of E-fuels
Water, the central resource of electrolysis
In addition to the need for electricity, the manufacture of E-fuels relies on the intensive use of water resources. Electrolysis needs a lot of water in order to transform electricity into gas or liquid. This creates important competition for use with agriculture and even with end consumers in water-stressed countries.
To give an idea, it is estimated that 1.4 liters of water are needed to produce 1 liter of electro-fuel. To this must be added the amount of water consumed to cool the solar panels that can power the electrolysis. As a result, the probable decrease in water reserves due to global warming could be a powerful brake on electrofuels.
A lack of alternatives to water electrolysis
In order to get around the obstacle of lack of water, alternatives exist to electrolysis. Thus, the “methane splitting” technique is an interesting candidate for substitution. Its interest consists in consuming less water and nearly 5 times less energy than the electrolysis method.
However, its problem lies in the use of natural gas in the production process. In order to remain carbon neutral, additional CO2 capture units will have to be installed, driving up prices. As a result, water electrolysis is still the main method used to produce electrofuels.
The question of competitiveness
3 to 4 times more expensive than conventional hydrocarbons
The development of E-fuels is therefore hampered by issues of access to low-carbon electricity and water resources. However, the main obstacle to the widespread adoption of these fuels remains their price. Today, electrofuels cannot be competitive with conventional fuels without significant carbon pricing. Government support is also needed to ensure that the competitiveness gap is reduced.
According to the Stockholm Environmental Research Institute, the price of electrofuels is still far too high. The institute estimates the lowest price for these fuels at $120 per MWh. However, the equivalent of this price for fossil fuels is only $40 according to the same institute. In fact, electrofuels are three to four times more expensive than conventional fuels.
Electricity and electrolyser as main cost factors
This difference in competitiveness is explained by the weight of electricity and electrolysers in the overall production cost. Electricity is particularly problematic due to the low load factor of wind and solar farms. In this case, the intermittency of RE means strong price variations with peaks at peak hours. Under these conditions, electrofuel producers are faced with additional costs in order to provide electricity on a continuous basis.
The second cost factor concerns all expenses related to electrolysers, including cell stacks. These represent nearly 50% of the total cost of an electrolyser. In addition, the intermittency of renewable energies favors the use of more expensive PEM electrolyzers, to the detriment of alkaline electrolyzers. The latter also have the great disadvantage of having high maintenance costs due to significant corrosive effects.
Therefore, the reduction of electrolysis costs will be absolutely essential to ensure the development of E-fuels in the coming years. Already, the cost of low-carbon electricity has reached extremely low levels in some parts of the world. Similarly, the cost of electrolysers has fallen by 20% in recent years, driven by Chinese demand. However, widespread adoption of electrofuels is still unlikely because of the huge electricity and water requirements.
In sum, if E-fuels have undeniable advantages in terms of decarbonization of sectors with high abatement costs, the energy needs they induce make us fear, at present, a false good idea for the energy transition. Nevertheless, they are easy to store and transport, and moreover, despite their cost, likely to reduce the impact of fuels on global warming. Above all, their main advantage consists in their compatibility with existing infrastructures, thus reducing the cost of the energy transition.