The Impact of the Top 3 Strategic Imperatives on the PtX Industry

Transformative Mega Trends

• Why: The shift to green energy has driven the move to renewable energy, leading to the decarbonization of the power sector. However, manufacturing, metal and mining, and chemicals and petrochemicals, among other hard-to-abate industries, continue to rely on the heat and raw materials derived from fossil fuels; as a result, their decarbonization has remained an uphill task.
• Frost Perspective: PtX technology enables the conversion of renewable power into sustainable chemicals, fuels, and heat energy, which can be utilized to decarbonize the aforementioned industries' supply chains and energy consumption. Hence, PtX's ability extends renewable energy's application across hard-to-abate industries' supply chains, which drives its adoption.

Disruptive Technologies

• Why: Although PtX pathways are anticipated to play a major role in the shift to decarbonization, high capital and operational costs remain a major challenge for their wide-scale adoption. Green hydrogen, which is an inevitable step for most PtX pathways, remains uncompetitive in terms of the cost compared to conventional grey hydrogen.
• Frost Perspective: Technological advances and economies of scale are making renewable energy production and electrolyzer capital and operational costs more competitive. Furthermore, research and development (R&D) activities are improving PtX pathways' cost and energy efficiency, which will further improve PtX technologies' competitiveness and adoption.

Industry Convergence

• Why: Traditionally, chemicals and fuel-based companies have been deploying PtX plants. However, PtX involves several diverse, complex, and cost-intensive assets; as a result, these plants have high capital cost requirements, which has restrained the technology's adoption.
• Frost Perspective: In the coming years, the PtX industry will witness collaboration between different participants, including renewable power plant operators, green hydrogen production plant operators, power-to-chemical and power-to-fuel plant operators, and PtX product end users to develop the PtX value chain, which will reduce CAPEX requirements from single entities and drive technology adoption.

Scope of Analysis

• Renewable energy generation is highly intermittent, which can result in significant electricity deficit or surplus. Surplus electricity must be stored or utilized to maintain grid stability and power quality. PtX technology converts this surplus renewable electricity into other forms of energy, such as heat and fuel.
• This study offers a technology overview of 3 PtX pathways, namely power-to-liquid (PtL), power-to-gas (PtG), and power-to-heat (PtH). It also provides a techno-economic analysis of PtX value chain operations, including renewable energy generation, electrolysis to produce green hydrogen, green hydrogen storage and transportation, and processes to convert green hydrogen into fuels and chemicals.
• The study includes key growth opportunities, growth drivers and restraints, key innovators, and patent landscape.

Segmentation

PtX Technology

• PtX Pathways
  • PtG
    • PtG follows the renewable energy-to-green hydrogen-to-syngas/methane energy conversion pathway.
  • PtH
    • PtH follows the renewable energy-to-heat energy conversion pathway.
  • PtL
    • PtL follows the renewable energy-to-green hydrogen-to-liquid fuels and chemicals conversion pathway.
• Electrolyzer Technologies
  • Alkaline Electrolyzer
    • Alkaline electrolyzers use alkaline electrolyte solutions for electrolysis to produce green hydrogen.
  • Proton Exchange Membrane (PEM) Electrolyzer
    • A PEM electrolyzer comprises a solid acidic proton exchange membrane.
  • Solid Oxide Electrolyzer
    • Solid oxide electrolyzers use a solid electrolyte of yttria (Y?O?)-stabilized zirconia (ZrO?/YSZ).
  • Anion Exchange Membrane (AEM) Electrolyzer
    • AEM electrolyzers use a liquid-solid hybrid electrolyte of the divinylbenzene (DVB) polymer, supported by a 1% KOH/NaHCO3 solution.

Growth Drivers

Decarbonization of Hard-to-Abate Sectors:

Oil and gas, energy production, chemicals, transportation, and iron and steel are emission-intensive sectors. Policymakers have mandated deep decarbonization of these sectors to enable a smooth transition to a low-carbon economy. PtX technology offers a sustainable solution to this problem and extends the application of renewable energy generation to the fuels, chemicals, fertilizers, metal and mining, and manufacturing industries.

Technology Advancements:

Owing to declining renewable energy and electrolyzer costs, driven by technology advancements and economies of scale, green hydrogen production costs are likely to drop by more than 50% over the next 3 years. Furthermore, in the long run, technology advancements and wide-scale adoption will significantly reduce the costs associated with the conversion of hydrogen to fuels and chemicals in the form of liquid and gas. Hence, these advancements will improve PtX technology's cost-competitiveness and adoption in the years to come.

Renewable Energy Intermittency:

Increasing awareness of the negative impact of sourcing energy from fossil fuels has driven the shift to renewable energy sources. However, renewable energy is intermittent; hence, electrochemical-based energy storage has become an inevitable add-on to integrate a significant amount of renewable energy into the power mix without compromising energy supply reliability. However, supply chain issues, questionable mining practices, and end-of-life battery management pose challenges to the wider adoption of electrochemical energy storage. PtX's ability to act as energy storage for the surplus renewable energy is driving its adoption as a sustainable alternative to electrochemical storage.

Growth Restraints

High Capital Expenditure:

Commissioning large-scale PxT facilities to manufacture green hydrogen and generate other raw materials is a capital-intensive process and requires significant initial investment due to the utilization of complex equipment, including the intermediate storage of green hydrogen and other specialty chemicals. Furthermore, installation of such technologies in small-scale industries is economically non-viable, and operations and maintenance expenses are also high. Significant incentives from governments are necessary to accelerate the commercialization of large-scale PxT facilities in the next 3 years.

Supply Chain Issues:

PxT involves extensive shipping and transportation of renewable energy and other intermediate products, which are time-consuming processes, resulting in supply chain issues and not catering to the rising demand.

Lack of Awareness:

The process of producing green ammonia, sustainable aviation fuel (SAF), green methanol, and other specialty chemicals is currently not adopted extensively across the world due to a lack of awareness and the dominance of large-scale facilities based on the conventional technologies used to manufacture these raw materials.