AN EVALUATION OF THE POTENTIAL PROFITABILITY OF MONETIZING

CHEAP SOLAR ENERGY THROUGH THE PRODUCTION OF CHEMICAL FUELS

Robert Zubrin, Mark Berggren and Tony Muscatello
Study Done for Mok Industries by Pioneer Astronautics
March 9, 2004
Introduction
Mok Industries has developed a new concept that could potentially enable the production of solar
electricity at very low costs. One option for monetizing the electricity produced by such systems
is to use it to produce chemical fuels for sale on the existing market. While it could be argued
that income could also be generated by such systems through direct sale of electricity, the two
markets are not exclusive. Indeed, while more income can be produced per kilowatt generated
through sale as electricity than as fuel, the size of the market for fuels is much larger than that for
electricity. The profit potential of a method of producing electricity could therefore be greatly
increased if it could also be used to produce fuels at marketable prices. Furthermore, using solar
energy to produce fuels avoids the principle problem solar energy systems encounter in
producing electricity for direct consumption, in that the periodic non-availability of sunlight due
to night or weather is not a significant issue. In addition, the need for transmission lines from the
solar power generation site is eliminated, allowing the site to be located far from urban areas
where land may be expensive and solar illumination conditions far from ideal. It could prove
very difficult to profitably produce solar electricity near London, for example. But a solar
powered fuel generation system could sell its products to consumers anywhere in the world. It
therefore makes sense to investigate the potential profitability of fuel production using the novel
Mok photovoltaic system. For this reason, Mok contracted with Pioneer Astronautics to study
such possibilities, first with analysis, and then with experimental demonstration. The analytical
phase, representing the first six weeks of the 3-month study effort is presented in Part I of this
report. In Part II, which begins on page 8, we present the results of the experimental phase.

PART I. ANALYSIS OF POTENTIAL COMMERCIAL PROFITABILITY

Options Considered
The options considered under this study included examining the use of Mok photovoltaic
systems (MPVS) to produce a variety of chemical fuels, including methane (CH4), methanol
(CH3OH), ethanol (C2H5OH), benzene (C6H6), propane (C3H8), and synthetic oil. The hydrogen
necessary to form these compounds in all cases was assumed to come from water. The carbon
feedstock was assumed to come from either CO2 or coal. In the analysis performed, CO2 was
assumed to be available for zero cost, but with no subsidy. (Actually, recovery of CO2 from flue
gas using current technology can cost about $30/ton. The goal of technologies under
investigation is to reduce the recovery cost to about $3/ton CO2. Subsidies for taking CO2 off the
hands of industrial facilities may be available in the future, but are not established now.) Coal
was assumed to be available for $30/tonne ($0.03/kg). Coal prices vary, and may drop to
$0.02/kg or rise to $0.04/kg, but since the price of all the fuels considered is at least $0.20/kg, the
potential ~$0.01/kg variation in the price of coal was not considered of significant importance.

Production Methods
The production methods for each of the fuels considered are described below.
Methane (CH4)
Methane may be produced using CO2 feedstock by the Sabatier reaction:

4H2 + CO2 => CH4 + 2H2O (1)

This reaction can be readily accomplished using ruthenium on alumina catalyst at 1 bar and 400
C. It is mildly exothermic and has a high equilibrium constant, making it readily feasible to drive
near completion. It will be observed, however, that producing one molecule of methane in this
way requires eight hydrogen atoms (even though only four are required to constitute the methane
molecule itself.)

Alternatively, methane can be produced with the assistance of coal through the following means:

C + H2O => CO + H2 (2)

CO + 3H2 => CH4 + H2O (3)

Reaction (2) was used to produce “town gas” for use in home illumination and heating during the
gaslight era. It is endothermic, but the energy required to drive it can be provided by burning a
modest fraction of the coal converted to CO (Reaction (2) requires 31 kcal/mole. Burning one
atom of C to CO2 provides 92 kcal/mole. So by burning one C, we can convert three C’s.)
Reaction (3) is exothermic, producing 49 kcal/mole, which can also be used in a heat exchanger
to preheat the water in reaction (2) to ~400 C (the desired temperature for reaction (3), thereby
greatly reducing the energy needed to drive (2).

It will be observed that if we add reactions (2) and (3) we obtain the net reaction:

C + 2H2 => CH4 (4)

It can be seen that if this method is employed, only 4 hydrogen atoms are required to form a
methane molecule. Relative to the CO2 feed method, this approach to procuring methane
therefore cuts the requirement for hydrogen, and thus electricity, in half.

Methanol
Methanol can be produced from CO2 using the following reactions:

CO2 + 3H2 => CH3OH + H2O (5)

Or

CO2 + H2 => CO + H2O (6)

Followed by

CO + 2H2 => CH3OH (7)

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Reactions (5) and (7) are both exothermic and can be performed at pressures of about 20 bar at
250 C on copper on zinc oxide catalyst. Reaction (6), known as the Reverse Water Gas Shift is
mildly endothermic, but can be done using a copper on alumina catalyst at 400 C. All three
reactions have modest equilibrium constants (~0.1) so that recycle loops are required to achieve
high yields. The advantage of using reaction (5) is that only a single reactor is required. The
advantage of using a two stage system employing separate reactors to do reactions (6) and (7) is
that pure methanol is produced, so that no subsequent distillation step is needed to separate the
water from the methanol. In both cases, 6 hydrogen atoms are needed to produce one methanol
molecule.

If coal is available, we can first perform reaction (2) to produce one CO and one H2, and then
add one H2 to proceed with reaction (7). Thus, only two hydrogen atoms would be needed to
produce one methanol. The availability of coal thus cuts the need for electrolytically produced
hydrogen to produce methanol by a factor of three.

It will be observed that if one employs reaction (2) twice, and then discards one of the CO
molecules, if it possible to produce a molecule of methanol using no electrolytically produced
hydrogen at all. The trade here is the difference in cost between 6 kg of coal and 1 kg of
hydrogen, plus the extra process costs to perform reaction (2). If coal costs $0.03/kg, and is
plentiful, this means that hydrogen costs need to be less than $0.18/kg + reaction (2) processing
costs (say ~ $0.22 kg/total) to make electrolytic production of hydrogen to more profitable way
to proceed. Mok industries estimates that their system can achieve a hydrogen production cost of
$0.073/kg, corresponding to an electricity cost of $0.00175/kWh. If this goal is achieved, then
the use of coal combined with electrolytic production of hydrogen is the most profitable option.
If electricity costs from the Mok system should exceed triple this estimate (i.e. prove greater than
$0.004/kWh), then, provided coal is plentiful, the use of coal alone would be more profitable. Of
course, if coal supplies are limited, then the break point for switching from combined photo-
hydrogen/coal based methanol production to only-coal based system would occur at a higher
electricity price.

Ethanol
Ethanol may be produced from CO2 by running reaction (6) twice to produce 2CO, and then
combining this with hydrogen in accord with:

2CO + 4H2 => C2H5OH + H2O (8)

Between the two runs of reaction (6) and reaction (8), we see that twelve hydrogen atoms are
needed to make one ethanol molecule from CO2.

If coal is available, we can run reaction (2) twice to produce 2CO + 2H2, and then add 2H2 to
perform reaction (8). In this case four hydrogen atoms would be needed to make one ethanol.

It should be noted that reaction (8) has been performed experimentally, but is not the method
used to produce ethanol commercially. If requires high pressures, and has low yields, with
substantial methanol impurities generated. It may thus be considered a more difficult synthesis
reaction to perform than (7).

3
Benzene
Synthetic benzene can be produced through a method proprietary to Pioneer Astronautics using
the following reaction:

6CH4 => C6H6 + 9H2 (9)

This reaction is endothermic, and occurs with low yield but high selectivity over a molybdenum-
based catalyst at 700 C. The hydrogen produced from the benzene synthesis is then recycled to
make more methane through the processes discussed in the methane synthesis section above.

If CO2 is used as the feed stock, then reaction (1), requiring 8 hydrogen atoms, needs to be
performed six times to make the six methanes needed for reaction (9), in which 18 of the 48
hydrogens are used to make the methanes, for a net requirement of 30 hydrogen atoms per
benzene molecule produced.

If coal is available as feedstock, then only 24 hydrogens are required to produce the six methanes
needed for reaction (9), which returns 18 hydrogens, for a net requirement of only 6 hydrogen
atoms per benzene molecule. The use of coal thus reduces benzene production hydrogen
requirements by a factor of five.

While Pioneer has performed reaction (9) on the brassboard scale in the lab, it has not yet been
commercialized. The difficulty of this process may this be considered comparable to the ethanol
synthesis reaction (8), i.e. more difficult than the methanol reaction (7).

Propane
Propane, C3H8 may be produced by Fischer Tropsh (FT) synthesis through the reaction:

3CO + 7 H2 => C3H8 + 3H2O (10)

Pioneer Astronautics has performed this reaction in the lab using an iron-based catalyst at around
300 C. The reaction is exothermic, but has low yield and, in work to date, low selectivity. It may
therefore be considered in a lower state of development than reactions (7), (8), or (9). However,
assuming the selectivity issue can be overcome with continued catalyst refinement, the process
identified in reaction (1) could be enabled with CO2 feedstock using reaction (6) to produced the
required CO, followed by hydrogen addition. Alternatively, if coal is available, reaction (2)
could be employed, followed by hydrogen addition. Using the CO2 feedstock route, at total of 20
hydrogen atoms are required for each propane molecule produced. Using the coal feedstock
route, 8 hydrogen atoms are needed for each propane produced.

Oil
Oil is basically a mixture of hydrocarbons, dominated by paraffins including, but typically
significantly longer chained, than propane. FT synthesis reactions similar to (10) could be used
to create mixtures with similar compositions to natural oil. Since mixtures would be created, the
selectivity problem is lower than for propane production. However the longer chained molecules
required to make oil are harder to produce than shorter chained paraffins, so yields remain
modest. Waxes are typically created as well, which need to be removed, adding complexity to

4
the process. Overall, the difficulty of the reaction is comparable to (10). Hydrogen requirements
as a percentage of product weight would be similar to those needed to make propane; however,
the price of oil per unit weight is lower than propane, making the potential profit margins per
unit produced lower.

In Table 1, we summarize the features of the potential fuel products discussed above.

Table 1. Summary of Fuel Production Characteristics.

CO2 Feed Coal Feed Ease of Synthesis
Fuel Price/kg (A=Easy;
H2/kg Income/kg H2 H2/kg Income/kg H2 D=Hard)
Methane $0.22 0.5000 $0.44 0.2500 $0.88 A
Methanol $0.24 0.1875 $1.28 0.0625 $3.84 B
Ethanol $0.30 0.2609 $1.15 0.0869 $3.45 C
Benzene $0.50 0.3846 $1.30 0.0769 $6.50 C
Propane $0.40 0.4545 $0.88 0.1818 $2.20 D
Oil ($30/bbl) $0.20 0.3750 $0.53 0.1500 $1.33 D

On the basis of the results Table 1, the two most favorable options appear to be benzene and
methanol, both with coal as the feedstock. Benzene has the highest income/kg hydrogen utilized,
while methanol has the highest income/hydrogen ratio for the simpler production options.

The data in Table 1 does not include any coal costs, however. In Figures 1 and 2 we show the
income to cost ratios for all of the fuels, with coal costs fixed at $0.03/kg and electricity costs
varying from $0.002/kWh to $0.010/kWh. We note that this varies the cost from slightly over the
Mok photovoltaic target electricity production cost of $0.00175/kWh to almost six times that
amount. The purpose of varying the price in this way is to test the robustness of the business plan
against the contingency that electricity costs prove to be higher than the target price. Note that
income values do not include any potential benefit from the sale of oxygen co-produced with
hydrogen.

Figure 1 shows how the income/cost ratio, as defined above, varies if the feedstock is CO2. Fig 2
shows how the ratio varies if the feedstock is coal.

It can be seen that regardless of whether CO2 or coal is chosen as the feedstock, the two most
promising options are benzene and methanol. If the Mok photovoltaic electricity target price of
~$0.002/kWh is met the income/cost ratio for both methanol and benzene using either CO2 or
coal as feedstock is about the same, with values between 13 and 14. However, if the actual cost
of Mok photovoltaic-generated electricity should be twice that anticipated, i.e. $0.004/kWh, then
the income/cost ratio for both methanol and benzene using CO2 feed would fall to ~6.5, while
benzene produced from coal would have a ratio of 11.5 and methanol from coal would be about
10. This trend towards advantage for the coal option increases further should an even higher
price for MPVS electricity be assumed.

5
We thus can see that the use of coal in place of CO2, while offering no advantages if the target
electricity price is achieved, makes the business plan much less sensitive to a higher achieved
price.
Profit from CO2

14

12

10

CH4
income/cost

8 CH3OH
C2H5OH
C6H6
6 C3H8
oil ($30/bbl)

0
0.002 0.003 0.004 0.005 0.006 0.007 0.008 0.009 0.01
electricity cost $/kWh

Fig. 1, Income to Cost ratio for producing various fuels from using MPVS assuming a range of
electricity costs and CO2 for carbon feedstock.
Profit from Coal

16

14

12

10 CH4
income/cost

CH3OH
C2H5OH
8
C6H6
C3H8
6 oil ($30/bbl)

0
0.002 0.003 0.004 0.005 0.006 0.007 0.008 0.009 0.01
electricity cost $/kWh

Fig. 2, Income to Cost ratio for producing various fuels from using MPVS assuming a range of
electricity costs and coal for carbon feedstock.

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In the analysis presented in Fig.1 and 2, we do not include other costs, including plant, labor, and
equipment for the chemical processing, rent or purchase of land, interest, legal costs, advertising,
taxes, management salaries, and dividends. If we assume these costs are equal to the hydrogen
and coal costs, and we desire a 100% markup on product between our production cost (including
all the above) and actual sale price, then the condition required for satisfactory company profit
would be that the income/cost ratio, as defined in Figs 1 and 2 exceed 4.0.

It can be seen that if the target MPVS electricity price of $0.002/kWh is met, then all options
fulfill this condition. However if CO2 is used as the feedstock, then methane and oil fail as viable
products should the MPVS price exceed $0.003/kWh, and propane fails at $0.0045. The two
most promising products, methanol and benzene would remain profitable unless the MPVS price
exceeded $0.0065/kWh, over three times the baseline target.

If coal is assumed as a feedstock, adequate profit margin would be preserved for methanol and
benzene production until the MPVS price reached $0.014 and $0.018 respectively, seven to nine
times the Mok estimated target price for the photovoltaic electricity output.

It should be noted that the use of coal adds process complexity to the system, as all coals contain
impurities, some of which, such as sulfur, can act as strong catalyst poisons. These impurities
and other ash need to be removed before the CO produced in reaction (2) can be used in
synthesis reactions such as (3), (7), (8), or (10). Technology to do this exists, but it does add cost.
Therefore conservative planning might demand an income/cost ratio of 5.0 for the coal fed
options, as compared to 4.0 for the CO2 fed options. That said, the coal fed options remain less
sensitive to electricity cost than the CO2 fed options, remaining strongly profitable even under
conditions where the MPVS cost is six times that currently anticipated by Mok industries.

Part I Conclusion:
We conclude that, provided that the Mok photovoltaic system can be made to produce electricity
at anything approaching its design cost, plans for using this technology to produce chemical fuels
could be extremely profitable.

7
 PART II: TESTING OF BRASSBOARD METHANE PRODUCTION UNIT

As per contract with Mok, this phase 1 program also included a first order brassboard
demonstration of one of the options considered for MPVS fuel production, specifically, the
conversion of CO2 to methane via the Sabatier reaction (Equation (1)). Provided the Mok system
produces electricity at the design price of ~$0.002/kWh, this reaction alone is sufficient to
produce an income to cost ratio of about 5:1 for the MPVS system. However, if this reaction is
used as the first stage of a system that produces benzene via reaction (9), the income to cost ratio
jumps to 14:1 at the Mok system design electricity price. Furthermore, by employing using coal
as a means of cutting hydrogen production requirements in half (i.e. equation (2)), the income to
cost ratio for the MPVS will remain above 7:1 even if the actual cost of electricity of the Mok
system should exceed the design cost by a factor of 5.

Accordingly, as a first critical step in technical validation of this system, a methane production
reactor was constructed and tested. The reactor consisted of a 300 cc stainless steel vessel, filled
with ruthenium-on-alumina catalyst. This reactor was raised to temperatures in the 400 C range
using electrical heat tape, after which flow would be initiated. Once flow was underway, reaction
would commence. This would release sufficient thermal energy to maintain reactor temperature.
Thus once startup had been achieved, no further electrical power for heating would be required..

Results of Methane Reactor Experiments

Experiments were conducted to determine the effects of operating parameters such as flow,
pressure, temperature, and H2:CO2 ratio on conversion and carbon monoxide generation. In one
set of tests, the effect of temperature on conversion was determined using a stoichiometric 4:1
molar H2:CO2 ratio at 1.1 bar absolute pressure. Conversions of up to 89 percent were obtained.
Figure 3 shows the results. (Note; 0.63 SLPM of stoichiometric 4H2/CO2 gas equals a mass flow
rate of 18 gm/hour).

8
 100

90
Hydrogen Conversion, %

80

70

60
300 350 400 450 500 550 600
Temperature (oC)

Figure 3. Effect of Sabatier Reactor Temperature on Conversion

(0.63 SLPM Feed Rate; 80% H2/20% CO2; 1.1 Bar Absolute Pressure)

The results in Figure 3 show that maximum conversion takes place in the temperature range of
about 350 to 400oC at lower flow rates. The effect of temperature at double the flow is shown in
Figure 4. This is the maximum flow measurable by the mass flow meters in a one-pass
configuration on the brassboard. The results show a slightly diminished conversion at higher
flow rate, but still greater than 82-83 percent over a temperature range of 350 to 450oC.

9
 100

90
Hydrogen Conversion, %

80

70

60
300 350 400 450 500 550 600
Temperature (oC)

0.63 SLPM Feed 1.26 SLPM Feed

Figure 4. Effect of Sabatier Reactor Temperature and Flow Rate on Conversion

(80% H2/20% CO2; 1.1 Bar Absolute Pressure)

The effect of operating pressure on conversion was measured over a temperature range of 350 -
450oC at a flow rate of 1.26 SLPM. As shown in Figure 5, conversion is noticeably improved at
higher operating pressures up to the maximum 3.8 bar absolute pressure tested. These limited
data suggest that maximum conversion is obtained at slightly lower temperatures as pressure is
increased.

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 95
Hydrogen Conversion, %

90

85

80
340 360 380 400 420 440 460
Temperature (oC)
1.1 bar abs 1.8 bar abs 2.8 bar abs 3.8 bar abs

Figure 5. Effect of Sabatier Reactor Temperature and Pressure on Conversion

(1.26 SLPM [36 gm/hr] Feed; 80%H2/ 20%CO2).

Ideally, the Sabatier reactor produces only methane and water at 100% conversion per pass.
However, a small amount of byproduct gases can be produced along with desired reaction
products. One byproduct gas of interest is carbon monoxide. In some cases, a small amount of
carbon monoxide in feed gas to a downstream benzene production system is desirable to promote
longevity of the catalyst. However, greater amounts of CO should be avoided to prevent build up
in the system and potential coking by disproportionation. Figure 6 shows the effect of
temperature on CO generation in the Sabatier reactor. At a stoichiometric 4:1 molar H2:CO2 feed,
the carbon monoxide concentration ranges from a low of 0.3 – 0.4 percent at 350 - 400oC to a
high of nearly 2 percent at 550oC (the highest temperature tested).

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 2.0

1.5
Volume % CO in Product Gas

1.0

0.5

0.0
300 350 400 450 500 550 600
o
Temperature ( C)

Figure 6. Effect of Sabatier Reactor Temperature on Carbon Monoxide Production

(0.63 SLPM Feed; 80% H2/20% CO2; 1.1 Bar Absolute Pressure).

Additional data taken over a range of pressures, temperatures, and flow rates shows that only
temperature has a strong influence on carbon monoxide production at the conditions of interest.
Figure 7. summarizes these results.

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 2.0
Volume % CO in Product Gas

1.5

1.0

0.63 SLPM; 1.1 bar abs

1.26 SLPM; 1.1 bar abs
0.5 1.26 SLPM; 1.8 bar abs
1.26 SLPM; 2.8 bar abs
1.26 SLPM; 3.8 bar abs

0.0
300 350 400 450 500 550 600
o
Temperature ( C)
Figure 7. Effect of Sabatier Reactor Temperature, Flow, and Pressure
on Carbon Monoxide Production (80% H2/20% CO2).

Additional experiments were conducted to determine the effect of the H2:CO2 feed ratio on
conversion in the Sabatier reactor. Pioneer Astronautics experience has shown that if it is desired
to use the Sabatier reactor as the first step in a benzene production system, then hydrogen-rich
environment is desired in the Sabatier system to minimize the concentration of CO2 in the outlet
stream. Table 2 summarizes the results obtained when feeding the Sabatier reactor at various
H2:CO2 ratios.

Table 2. Effect of Inlet Gas H2:CO2 Ratio on Sabatier Outlet Gas Composition
(0.1 SLPM CO2; 0.8 Bar Absolute Pressure; ~380oC).

CO2 Outlet Gas Composition (volume %)

Inlet H2:CO2 Conversio
Ratio n H2 CO CH4 CO2
(%)
4.0:1 87.1 30.1 .92 60.1 8.85
5.0:1 98.5 51.9 .67 46.7 0.72
5.5:1 100.0 59.4 .75 39.9 0.00
6.0:1 100.0 65.8 .59 33.7 0.00

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The results show that the CO2 concentration can be eliminated by operating at higher H2:CO2
ratios. The extra hydrogen needed to keep the Sabatier reactor hydrogen rich does not need to be
produced and then wasted. Instead, it can be recycled using a hydrogen permeable membrane
and a recycle pump. However, from an operational standpoint, extremely high hydrogen
concentrations are to be avoided to prevent an excessive load on the membrane and recycle
pump. Therefore, only the amount of excess hydrogen required for nearly complete CO2
conversion should employed.

In summary, the Sabatier reactor performed consistently with per-pass conversions generally in
the 80-90 percent range using a stoichiometric feed. CO2 conversion rates of essentially 100%
could be achieved by raising the input H2/CO2 ratio to 5.5:1. CO by product production can be
kept to less than 1%. This does not represent a problem, since if it present in natural gas it will be
burned along with the rest of the fuel, and if instead the Sabatier reactor is being used to feed a
benzene production system it will have negligible effect. Any excess hydrogen that is not caught
by the membrane and recycled will also not hurt a benzene production system, as Pioneer
experience has shown that up to 10% hydrogen is in fact desired in the feed of such systems to
prevent coking.

Part II Conclusion:
The use of Sabatier reactors convert CO2 to methane at near 100% efficiency using hydrogen
reactant is technically feasible.

OVERALL STUDY CONCLUSION

Based on both the commercial analysis and the experimental work done with the Sabatier
system, we see no reason why cheap hydrogen made available at the currently projected Mok
design price could not be profitably converted in methane fuel. If a second step is added to
transform the methane so produced into benzene, profit could be achieved even if the actual cost
of MPVS electricity should exceed current Mok estimates by a factor of five. An alternative
process that produces methanol is also quite promising.

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