Opportunities and barriers for implementation of Power-to-X (P2X) technologies in the West Sweden Chemicals and Materials Cluster's process industries

Report, 2020

The interest for industrial electrification is currently increasing rapidly as it has been identified as one important strategy for achieving climate neutrality. This is for example illustrated by the initialization of several larger industrial cross-sectorial projects (e.g. HYBRIT, CemZero, co-operation Preem-Vattenfall) and supporting R&D-programs in Sweden and Europe during the past few years. Recently, the chemical industry in the Swedish region Västra Götaland has also shown an increasing interest for P2X, and the initiative Klimatledande processindustri (KPI) (in eng. Climate smart industry), coordinated by the West Sweden Chemicals and Materials Cluster, has identified P2X as a prioritized R&D area.

The purpose of this project was to identify opportunities and barriers for the introduction of P2X technologies in the process industries of the West Sweden Chemicals and Materials Cluster, with emphasis on the chemical and refinery industry in Västra Götaland and Södra´s pulp mill in Värö, Halland. The mapping was carried out for current conditions and markets (electricity, heat) as well as future scenarios, and the results provide a basis for a regional road map for industrial electrification in the region. Another aim of the project was to identify priority areas for continued development and innovation within the framework of the KPI initiative.

The analysis and the conclusions of the project are based on information collected from open literature and interviews with the participating industries and organizations.

The results of the project indicate clearly that the driving forces for industrial transformation and P2X within the West Sweden Chemicals and Materials Cluster are currently variable and different depending on the industrial sector. The refineries' interest in P2X and other transformative measures, e.g. biomass and CCUS, is primarily driven by the Swedish emissions reduction obligation, while the chemical industry expresses the shift to the circular economy as the main driver for P2X. Södra, as a forest industry and net producer of electricity, can contribute significantly to this transformation by supplying electricity and excess biomass at the same time as they have their own goal “Fossil-free transport in 2030”, in which increased electrification is one of the solutions. Neither the European Emissions Trading (EU-ETS) for CO2 nor the possibility of being an active player in an increasingly flexible electricity market provide significant incentives for electrification in West Sweden process industries.

There are many P2X technologies for producing different products, with widely different technology readiness levels (TRL) and suitability depending on the industrial sector. Within the cluster's oil refinery industry, there are concrete plans within the next few years for establishing P2H2 at demonstration scale. In the longer term, it is conceivable that the refinery industry will implement large-scale P2H2 concepts to satisfy a significant fraction of the hydrogen gas needs of their refinery operations (Preem), or even implement electro-fuel production, e.g. electro-methanol (Preem, St1). In addition, the SME company Liquid Wind is targeting for up to five regionally located electro-methanol plants. Borealis mainly expresses interest in various forms of P2heat, while Perstorp in the long run sees interesting opportunities in P2acids.

A number of barriers have been identified for the implementation of the different P2X technologies, such as low TRL levels, high costs, uncertainties linked to integration aspects and impact on existing processes and systems, access to carbon dioxide, water and electricity at one site if electro-fuel production, etc. Other barriers raised by the industries are the lack of long-term policy and funding. However, the most significant barrier that was pointed out for large scale P2X implementation concerns uncertainty regarding the availability of fossil-free or renewable electricity capacity at competitive prices in combination with long lead times for permitting processes and expansion of the electricity grid (up to 10-12 years).

The sum of the expressed power needs associated with a moderate electrification pathway (i.e. investments that are either likely to occur or that are at the planning stage) presented by the interviewed industries corresponds to a doubling of current power demand levels. A more speculative extensive electrification scenario beyond 2030 (i.e. assuming that all electrification concepts discussed during the interviews are implemented by 2045), the total power need becomes just over 10 times larger than today´s and would most likely require extensive grid reinforcements. But even with the moderate electrification plans, grid reinforcements could be needed, especially if they coincide with electrification of other sectors. This highlights the need for open and active communication between industries and power grid operators about future plans and possibilities.

Finally, a number of suggestions for further work in the field have been identified, including for example development and demonstration of different advanced P2X-technologies, inventories and implementations of heat pumps, the role of P2X in relation to other pathways (based on biomass, CCS, CCU) and how to design and integrate the P2X-technologies at the overall sites, where P2X is usually only one part of the solution.