Storing Wind Power in Gasoline

I just read an intriguing article by the inventor of a scheme for using the energy in off-peak wind power to recycle waste CO2 into hydrocarbon fuels like gasoline or diesel. If it works, it would be a clever way to finesse the energy storage challenge that has hampered wider application of intermittent energy sources such as wind, and it appears to rely on largely proven chemistry and technology. Like so many other novel energy ideas I encounter, it almost sounds too good to be true. In this case determining whether it is or isn't depends less on the technology involved than on an assessment of the markets that the developer's company, Doty Energy, would have to tap for its inputs. In a nutshell, I question whether it's possible to base a new fuels industry on the assumption that off-peak wind power will always remain dirt cheap.

The basic opportunity on which Dr. Doty's "Windfuels" concept seeks to capitalize is that because wind turbines don't necessarily generate power when the grid needs it, and because it's currently expensive to store electricity unless you have a hydropower dam and the right topography handy, much of the off-peak wind power the grid can accept is sold for a song, while some is "curtailed", or rejected by the grid entirely. With a substantial supply of wind power costing just a penny per kilowatt-hour (kWh), it might be possible to convert that excess wind energy into chemicals, effectively storing it in the form of gasoline, diesel or jet fuel.

The process described on the company's website marries three distinct segments, including electrolytic generation of hydrogen--an off-the-shelf item--Fischer-Tropsch synthesis of hydrocarbons--proven in a variety of applications since before World War II--and the conversion of CO2 and hydrogen into synthesis gas using the reverse of the standard water-gas shift reaction that is in wide use in the chemical and refining industry. The company must prove that it can master the latter step and integrate these components successfully into a scheme that is ultimately driven by an intermittent and unreliable energy source, off-peak wind generation. The operational challenges that presents might be surmounted by means of pressurized hydrogen storage, as suggested in the flow diagram provided in a company presentation, but the economic obstacles involved seem less straightforward.

Assuming this process could be made to work effectively and efficiently, its inputs and intermediate steps raise questions about the cost and value of these streams. The biggest probably relates to the long-term availability of cheap off-peak wind power itself. Based on cumulative capacity and output, the average capacity factor of US wind generation in 2009 was around 27%. I don't know how much of that was off-peak, but it was probably less than half. While Doty Energy sees an opportunity to arbitrage between wind power at 1¢/kWh and gasoline that currently wholesales for an energy-equivalent price of 7¢/kWh, developers of electrical energy storage systems see an arbitrage opportunity between cheap off-peak power (from any source) and peak power markets in excess of 20¢/kWh, or occasionally much more. Even if Doty's process, which it claims is 50% efficient overall, worked as well as energy storage technologies such as compressed air energy storage (CAES), it seems likely that the future competition for that off-peak wind power from various applications would drive up its price. The economics of CAES might not be harmed much by having to buy off-peak power at 3¢/kWh, but that would be a deal-breaker for Windfuels, unless gasoline prices were much higher than today's.

Then there's the question of how to value that hydrogen, once you've made it. Even with plenty of 1¢ wind power to generate the H2, its value is what it could be sold for. The vast majority of hydrogen today is produced from natural gas, and it can be worth as much as $10/kg at a commercial hydrogen station. That's the energy equivalent of 30¢/kWh. If electrolysis of off-peak wind power is such a good source of hydrogen, why not just stop there and sell the hydrogen into its large existing commercial and industrial market, without having to build the rest of the conversion hardware for making hydrocarbons?

Perhaps my receptiveness to the Windfuels concept was affected by the inventor's arguments slamming practically all other energy alternatives besides his, including biofuels (conventional, cellulosic and algae-based), hydrogen, solar power (ground-based PV, solar thermal and space solar power), nuclear (fission and fusion), unconventional hydrocarbons and electric vehicles as impractical or uneconomic. I suppose that might be an effective way to drum up financing in some quarters. Yet while I've expressed skepticism or reservations about certain of these approaches myself, it seems absurd to set up an untried process as the only viable alternative to our current energy sources, particularly for transportation energy. The good news is that Doty Energy has the same opportunity to prove its concept in the marketplace of ideas and financing as the thousands of others that have emerged in the last few years. Making it through all those gates and hurdles will be the only test of the viability of Windfuels that really matters.