Electrofuel Synthesis from Variable Renewable Electricity: An Optimization-Based Techno-Economic Analysis

Sectors such as aviation may require low-carbon liquid fuels to dramatically reduce emissions. This analysis characterizes the economic viability of electrofuels, synthesized from CO 2 from direct air capture (DAC) and hydrogen from electrolysis of water, powered primarily by solar or wind electricity. This optimization-based techno-economic analysis suggests that using today's technology, hydrocarbon electrofuels would cost upward of $4/liter of gasoline equivalent (lge), potentially falling to $1.7-1.8/lge in the next decade and <$1/lge by 2050. Only in the latter case are electrofuels potentially less costly than using petroleum fuels offset with DAC with sequestration. Achieving low-end electrofuel costs is contingent on substantial reductions in the capital cost of DAC, electrolyzers, and renewable electricity generation. However, the system also requires sufficient operational flexibility to efficiently power this capital-intensive equipment on variable electricity. Such forms of flexibility include various types of storage, supplementary natural gas and grid electricity interconnections (penalized with a steep carbon price), curtailment, and the ability to modestly adjust fuel synthesis and DAC operating levels over time scales of several hours to days.