A new collaboration was announced last week, between Dutch power company Nuon, European natural gas pipeline operator Gasunie, and Norwegian oil major Statoil. The joint venture will look at converting one of the Magnum power plant’s three 440 MW gasifiers, with hopes to have it running on hydrogen fuel by 2023.
This is the continuation of the Power to Ammonia project and, although ammonia is not expected to be used in this particular stage of the project, converting Magnum to hydrogen fuel represents the “intermediate step” to demonstrate that “where hydrogen could be produced using natural gas by 2023, from the year 2030 it could be possible to produce it with sustainably produced ammonia … Ammonia then effectively serves as a storage medium for hydrogen, making Magnum a super battery.”
I’ve written extensively about Power to Ammonia over the last few months, including a focus on the Nuon business case and the feasibility study’s assessment of ammonia synthesis technologies. All of which were central to the recent Power to Ammonia conference in Rotterdam, in May 2017. This latest announcement moves the project forward in significant steps, with serious partners.
Memorandum of Understanding
The Institute for Sustainable Process Technology (ISPT) brought together the parties involved in the original Power to Ammonia feasibility study, including Nuon, and this latest announcement means that this particular business case is moving forward.
ISPT’s announcement begins by setting these corporate decisions in context, explaining the motivation for decarbonization in the power sector:
In this project one of the three units of the Magnum gas-power plant in the Eemshaven in Groningen would start producing electricity from hydrogen by the year 2023 … this innovation project can provide important learning experiences in order to reach a CO2-free production of electricity …
Natural gas-power plants play a very important role in the reliability of the Dutch power supply due to their flexible employability. Safeguarding the stability in energy supply will become increasingly important in the future when the portion of solar and wind energy increases … To meet the goals set by the Paris climate accord, the emissions in the electricity sector must be 55 to 75% lower than they were in the year 1990 by 2030. If these new power plants – that will easily stay in production beyond the year 2050 – won’t be using gas but have transferred to hydrogen, the energy supply could become CO2-free while also maintaining reliability and stability.
ISPT: Nuon, Statoil and Gasunie join forces using hydrogen in future CO2-free energy plants, 07/07/2017
Statoil’s press release describes the scope of the MOU:
The next steps will involve feasibility studies to evaluate the conversion of one of the three Magnum units of Vattenfall Nuon in Eemshaven to run on hydrogen … In addition, Gasunie examines which infrastructure for transport and storage is needed.
The scope of the MoU also includes exploring how to design a large-scale value chain where production of hydrogen is combined with CO2 capture, transport and permanent storage as well as considering potential business models.
Statoil: Evaluating conversion of natural gas to hydrogen, 07/07/2017
Gasunie’s press release explains the roles each party will play, and explains the commercial interest from the infrastructure perspective:
Statoil will be responsible for the production and supply of hydrogen. To this end, Norwegian natural gas will be converted into hydrogen and CO2. The CO2 will be stored underground, off the Norwegian coast … Gasunie is examining how the hydrogen can be transported to the Magnum power station and, if necessary, stored temporarily. Once the first natural gas station has been made suitable for hydrogen, it can serve as an example for other stations …
“At Gasunie, we see renewable gases as an indispensable component in making our energy supply more sustainable. The energy transition requires new types of infrastructure and the smart use of existing networks. Gasunie aims to invest in new infrastructure for renewable gases, such as green gas and hydrogen.
Gasunie: Gasunie contributes to switching power station from gas to hydrogen, 07/07/2017
Carbon Capture and Sequestration (CCS) as a bridge to Renewable Hydrogen
Statoil, the state-owned Norwegian oil producer, has been running commercial carbon capture and sequestration (CCS) projects for over 20 years already, at Sleipner and Snøhvit in the North Sea and Barents Sea.
The Nuon project fits in neatly with a much larger CCS project that Statoil has been developing over the last few years, with partners including Yara and the Norwegian government, for massive carbon sequestration in the Norwegian continental shelf. The latest announcement regarding Statoil’s CCS project came just two weeks ago, at the end of June:
The results of studies performed in 2016 show that it is technically feasible to realise a carbon capture and storage chain in Norway. The next phase of the project, which Statoil has been assigned to perform, will involve concept and pre-engineering studies in order to evaluate the possibilities in more detail, and to get accurate cost estimates towards a possible investment decision. An investment decision for project implementation is expected to be made by the Norwegian Parliament in 2019 …
The storage solution to be evaluated by Statoil will have the potential to receive CO2 from both Norwegian and European emission sources [like the Nuon power plant] … Future carbon storage may also help realise a hydrogen market. Hydrogen produced from natural gas generates CO2 as a by-product, and with a value chain for [CO2] capture, transportation and storage it will be possible to further examine a full-scale value chain for hydrogen, which is a low-carbon energy solution with potentials within both power, heating and transportation.
Statoil: Statoil evaluating new CO2 storage project on the Norwegian continental shelf, 06/30/2017
All these actions fit in with Statoil’s strategy of diversification into clean energy, with its significant assets and expansion plans in offshore wind and a $200 million clean energy investment fund, Statoil Energy Ventures.
[Note: while I applaud Statoil’s clean energy investments and innovation, I am deeply skeptical about the net carbon benefit of CCS for enhanced oil recovery (EOR). In CCS for EOR, CO2 is pumped underground for permanent storage, but displaces hard-to-reach oil which can then be extracted. Although there is little transparency in this industry regarding the amount of carbon sequestered or oil recovered, all the numbers I have seen suggest that CCS for EOR offers no carbon benefit, in fact, quite the opposite. CCS for EOR probably extracts much more carbon than it stores because the oil it extracts, which was otherwise unrecoverable and would have remained sequestered, contains more carbon than the CO2 stored in its place.]
The idea to use CCS in hydrogen production for the Magnum plant is a bridge solution, however, not a permanent plan. The ultimate aim is to make the full transition to renewable hydrogen, which is where ammonia plays its part, facilitating storage and distribution, and benefiting from economical production in regions – perhaps across the oceans – where renewable resources are sufficiently abundant.
For context, the conversion of one of Magnum’s three 440 MW turbines to run on hydrogen fuel, produced from ammonia, would require Nuon to import roughly one million tons of ammonia per year. To convert all three units, it would need to import closer to three million tons per year.
The opportunity for ammonia producers here is in the scale of such a transition. If the economics or the ethics of carbon-avoidance can spur a broader adoption of renewable hydrogen for power generation, then the energy market’s demand for ammonia will dwarf the fertilizer industry.