  This paper studies the economics of carbon-neutral synthetic fuel production
from renewable electricity in remote areas where high-quality renewable
resources are abundant. To this end, a graph-based optimisation modelling
framework directly applicable to the strategic planning of remote renewable
energy supply chains is proposed. More precisely, a graph abstraction of
planning problems is introduced, wherein nodes can be viewed as optimisation
subproblems with their own parameters, variables, constraints and local
objective, and typically represent a subsystem such as a technology, a plant or
a process. Edges, on the other hand, express the connectivity between
subsystems. The framework is leveraged to study the economics of carbon-neutral
synthetic methane production from solar and wind energy in North Africa and its
delivery to Northwestern European markets. The full supply chain is modelled in
an integrated fashion, which makes it possible to accurately capture the
interaction between various technologies on hourly time scales. Results suggest
that the cost of synthetic methane production and delivery would be slightly
under 200 \euro/MWh and 150 \euro/MWh by 2030 for a system supplying 100 TWh
(higher heating value) annually that relies on solar photovoltaic plants alone
and a combination of solar photovoltaic and wind power plants, respectively,
assuming a uniform weighted average cost of capital of 7\%. The cost difference
between these system configurations mostly stems from higher investments in
technologies providing flexibility required to balance the system in the
solar-driven configuration. Synthetic methane costs would drop to roughly 124
\euro/MWh and 87 \euro/MWh, respectively, if financing costs were zero and only
technology costs were taken into account. Prospects for cost reductions are
also discussed, and options that would enable such reductions are reviewed.
