“World first” solar methanol plant signs up potential investor and offtaker

Plans for South Australia to host a “world-first” solar methanol production facility – providing green fuels for the shipping and aviation industry – have received a boost, with developer Vast Solar snagging a potential investor and offtaker for the project.

Vast said on Tuesday it had signed a letter of intent with German outfit Mabanaft for potential offtake and equity investment in Solar Methanol 1 (SM1), which is to be built in Port Augusta and powered by what is hoped to be Australia’s first large-scale solar thermal project.

Concentrating solar thermal (CSP) uses mirrors to concentrate and capture heat from the sun in solar receivers, with high temperature heat transferred via sodium and stored in molten salt.

The stored heat can then be used to heat water to create steam to power a turbine and produce electricity, and which can be stored over long periods. The heat can also be used directly to decarbonise some industrial processes, such as the proposed solar methanol plant.

Vast Solar’s modular design uses multiple towers and different fields of solar collectors and sodium as the heat transfer fluid. It has also developed its own control systems, can generate higher temperature heat, and in its 1.1MW pilot plant – funded by another $9.9 million grant from ARENA – has delivered greater reliability than other solar thermal technologies.

Vast’s Port Augusta solar thermal project – dubbed VS1 – had life breathed into it in February, when Vast was awarded a $65 million grant from the Australian Renewable Energy Agency to build a 30MW/288MWh CSP plant on the same piece of land as the ill-fated and much bigger Aurora project.

The ARENA funds added to the $110 million in concessional finance from the Australian government, and a further $40 million from the Australian and German governments – awarded in January – to add a hydrogen electrolyser and solar methanol conversion facility to the project.

The other partner in the consortium is the Australian Solar Thermal Research Institute (ASTRI). The provider of hydrogen electrolysers and the German supplier of the methanol plant have not been named.

On the solar thermal and methanol plants, Vast is partnering with fellow Australian company Calix and Australian Solar Thermal Research Institute (ASTRI). The provider of hydrogen electrolysers and the German supplier of the methanol plant have not been named.

Vast is also partnering with local company 1414 to develop a 140MW big battery (with at least one hour storage) at the site.

The methanol project is expected to take around 10 to 20 per cent of the solar thermal plant’s output under an off-take agreement, with the money promised by ARENA ($19.48 million) and its German counterparts (€13.2 million) to build the methanol plant and other infrastructure.

Methanol is made by the combination of hydrogen and Co2, with the latter to be supplied by Calix, under a carbon capture technology it uses as part of a lime supply agreement with cement company AdBri.

Vast says solar methanol is an attractive product because it is easier to use in retrofitted ships than green ammonia, and can readily be used to produce sustainable aviation fuel, and is likely cost competitive with fossil fuel methanol once produced at industrial scale.

This suits Mabanaft, which is active in the import, distribution and marketing of petroleum products, natural gas liquids, chemicals and biofuels, and it is supporting its customers’ transition to cleaner fuels.

“Partnering with Mabanaft is an important step forward for SM1 that will unlock significant development of the project,” said Vast CEO Craig Wood, on Tuesday.

“Together with the Solar Methanol Consortium, we are excited to partner with a company such as Mabanaft that offers its customers innovative energy solutions for their transportation, heating, industrial and agricultural needs.”

Calix CEO and managing director Phil Hodgson said Mabanaft was a welcome new member of the Solar Methanol Consortium – and testament to the significant demand for more sustainable transport fuels.

“(The LIO is) an important milestone in the consortium’s journey to use renewable energy, hydrogen and CO2 captured from industry to help decarbonise this hard-to-abate sector,” Hodgson said.

After successful completion of the Front End Engineering and Design (FEED), a Final Investment Decision (FID) will be made, with equity funding expected by Vast to be matched by ARENA and PtJ for a total funding envelope of up to AUD$78 million.