Decarbonisation Technology August 2025 Issue

Methanol production

Power plant

Stack

Methanol synthesis

MeOH

HRSG

Methanol storage

Condensate

Condenser

Electrolysis

Turbine + generator

Condensate

Figure 4 Methanol production – liquid energy storage solution

low cost. Building a tank farm for methanol storage is not markedly different from building one for oil or gasoline, and the cost per kWh of storage capacity is extremely cheap compared to big batteries. Methanol also has a far higher energy density by volume than hydrogen. A given tank can store several times more energy as methanol than it could as compressed hydrogen gas. Moreover, unlike hydrogen, methanol does not require extreme pressurisation or cryogenics – it can sit in a normal tank for months without significant losses. The main trade-off, as with hydrogen, is efficiency. Turning electricity into methanol and back involves multiple steps, each with energy losses. First, some energy is lost making hydrogen (electrolysis might be ~65% efficient), then more is lost synthesising methanol from hydrogen and CO₂, and again when converting methanol back to electricity. Overall round- trip efficiency for methanol storage is roughly 30-35%. It is slightly lower than hydrogen’s efficiency because of the extra fuel synthesis step, but it is in the same general range. Like hydrogen, methanol is not intended for daily cycling with minimal loss – it is meant for long-term energy storage where the ability to store massive amounts of energy in liquid form outweighs the inefficiency. Where methanol shines is as long-duration insurance for the grid and as a highly flexible energy carrier. Modelling studies suggest that

in a highly renewable grid, a methanol-fuelled backup could economically cover extended periods of low wind or sun. In some scenarios, using methanol for long-term backup is cheaper than storing hydrogen in expensive above- ground tanks. While hydrogen in underground caverns is very low-cost, not every region has suitable geology, but virtually any location can build steel tanks for liquid methanol. Where geological hydrogen storage is not possible, methanol offers a viable alternative for multi- week backup to keep the lights on. Another compelling aspect of methanol is its integration with other sectors. A reserve of renewable methanol could be used not only for grid power during shortages, but also as a fuel for vehicles or as a feedstock for industry if needed. This cross-sector flexibility is something a battery cannot offer – methanol turns excess renewable electricity into a universally usable liquid fuel that can go wherever energy is needed most. Of course, there are challenges and considerations for methanol-based storage. One challenge is the need for a sustainable CO₂ source for methanol synthesis. To be carbon-neutral, the CO₂ used to make methanol must come from a non-fossil, recycled source (for example, captured from air or biomass). Capturing and recycling CO₂ adds complexity and cost to the system. Another challenge is that the technology to convert methanol back to electricity at high