Greener Chemicals: World’s Largest Methanol Producer Expands Wind Energy Use in Chile

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Market leaders in their respective industries, Methanex and Vestas on May 24 announced they are extending a joint effort to identify and develop wind energy project sites in Chile’s wind-rich Magallanes region.

Looking to secure reliable supplies of clean, renewable electricity, Methanex signed a wind energy development agreement with Vestas two years ago when the methanol producer and distributor used Vestas wind turbines to build the 2.55MW Cabo Negro Wind Power Plant near its production facility in Magallanes.

Used on a large-scale for a wide variety of industrial and commercial purposes, methanol is viewed by some as a better alternative to ethanol and hydrogen as a replacement for petroleum-based fuels and chemical feedstock. As Methanex points out, methanol can be found in everything “from windshield washer fluid to recyclable plastic bottles, plywood floors to the paint on your walls, silicone sealants to synthetic fibers.”

The Methanol Economy: Alternative to Petroleum?

Demand for methanol has been growing fastest in the energy sector, however. Methanol’s increasingly being used as an alternative to petroleum-based transportation fuels, as well as plastics and petrochemicals. Methanol demand from the energy sector now represents about 1/3 of total global methanol demand, according to Methanex. “There has been strong demand growth for methanol for direct blending into transportation fuels and for the production of dimethyl ether (DME) and biodiesel. Methanol is also used to produce methyl tertiary butyl ether (MTBE), a gasoline component,” the company notes.

Methanex is the largest producer and distributor of methanol to international markets, operating plants in Alberta, Canada; Chile, Egypt, New Zealand and Trinidad and Tobago capable of producing more than 9 million metric tons per year. It also operates a worldwide network of storage sites and the world’s largest methanol tanker fleet.

Located 28 kilometers (17.36 miles) north of Punta Arenas on the Straits of Magellan, Methanex’s plant at Cabo Negro is the production and distribution hub for its Latin American operations. From there, Methanex ships methanol throughout Latin America, as well as to North American, Asia-Pacific, and European markets.

Cabo Negro is also the center of Chile’s petroleum and natural gas industry. It’s also world famous as a region unique and stunning in natural beauty, ecosystems, flora and fauna.

Natural gas, by a long stretch, continues to be predominant feedstock used to produce methanol. The simplest type of alcohol, methanol can be produced from a wide variety of feedstock with an equally wide range of pollutant and CO2 emissions profiles, however, including CO2 captured from flue gas as well as coal bed gasification.

Methanex Looks to Magallanes Wind for Cleaner, Cost-Effective Renewable Energy

Methanex operates four separate methanol plants with combined capacity of 3.8 million metric tons per year at Cabo Negro. The Vancouver-based company’s been operating only one plant at Cabo Negro, and that at around 50% of capacity, constrained by natural gas supply, however.

“We expect short-term pressure on gas supply in southern Chile to continue,” Methanex management reported recently. “We continue to believe that there is upside potential for Methanex in the region, as gas development and drilling activity in southern Chile has been accelerating.

“While we remain committed to supporting gas development in Chile, we are also evaluating other options to create value from our Chile operations, including capacity relocation and installing coal gasification as an alternative supply source.”

Methanol production’s an energy-intensive process. The Cabo Negro wind farm is “plugged” into the internal generating system at the Methanex plant complex, augmenting its base 36 MW of power generation capacity.

Looking for alternatives to natural gas has also led Methanex to consider much cleaner, less polluting and renewable ways of producing energy to power its operations. As it turns out, the Magallanes region is also rich in wind energy resources. That’s led to the construction of the 2.5 MW Cabo Negro wind farm and its 2010 wind energy project development agreement with Vestas.

The Cabo Negro wind farm’s capacity factor in 2011 was 53.5%, which means it was producing clean, renewable electricity 53.5% of its up-time. That’s much higher than the 25%-30% that serves as a rough guide average for the wind energy industry, the result being that Methanex has been avoiding about 12,204 metric tons of CO2 emissions per year.

“The agreement between Vestas and Methanex defines the framework for further cooperation between both companies to establish a baseline for the development of future wind projects in/or around Methanex´s global production facilities; to support and advise Methanex in the development of new wind projects around the world; and to help build a robust renewable energy regulation in the Magallanes Region – contributing to the diversification of its energy mix,” according to a Vestas press release.

Chile’s Environmental Ethic, or Lack Thereof

Paul Schiodz, General Manager, Methanex Chile, says: “The success of our wind energy farm in Magallanes demonstrates the role that wind energy can play in the regional energy matrix. The agreement with Vestas should contribute to establish a robust regulatory framework to incentivize wind energy in the region”.

Blessed with large-scale hydropower resources, Chile’s government hasn’t been proactive when it comes enacting strong renewable energy incentives and policies. The fact that a major industrial and commercial chemical supplier situated in the heart of the country’s petroleum and natural gas region has chosen wind power testifies as to how far wind energy economics have improved.

As Chileans organize, speak out and demonstrate in favor of stronger environmental protections and conservation, it also testifies to a growing environmental ethic and the positive effects public outreach and education can have in striking a healthier, more sustainable balance between economics and human use of environmental resources.

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