In late 2018, JGC Corporation issued a press release to celebrate a "world's first" in ammonia energy, demonstrating at its pilot plant in Koriyama both "synthesis of ammonia with hydrogen produced through the electrolysis of water by renewable energy, and generation of electricity through gas turbines fueled by synthesized ammonia."
By demonstrating the feasibility of using ammonia on both sides of the renewable energy equation -- first, producing green ammonia from intermittent renewable electricity and, second, combusting this carbon-free fuel for power generation -- the project demonstrates the role of ammonia in the "establishment of an energy chain ... that does not emit CO2 (CO2-free) from production to power generation."
The movement toward small-scale ammonia is accelerating for two reasons. First, small ammonia plants are flexible. And, second, small ammonia plants are flexible.
They are feedstock-flexible, meaning that they can use the small quantities of low-value or stranded resources that are widely available at a local scale. This includes flared natural gas, landfill gas, or wind power.
And they are market-flexible, meaning that they can serve various local needs, selling products like fertilizer, energy storage, or fuel; or services like resource independence, price stability, or supply chain robustness.
While the scale of these plants is small, the impact of this technology is big. As industry-insider publication Nitrogen+Syngas explained in its last issue, "as ammonia production moves toward more sustainable and renewable feedstocks the ammonia market is facing a potentially radical change."
This week, DNV GL published its annual Energy Transition Outlook, providing a long-term forecast for global energy production and consumption, and including a dedicated report describing its Maritime Forecast to 2050. This is the first forecast from a major classification society explicitly to evaluate ammonia as a maritime fuel.
By 2050, DNV GL predicts that 39% of the global shipping energy mix will consist of "carbon-neutral fuels," a category that include ammonia, hydrogen, biofuels, and other fuels produced from electricity. By 2050, these fuels will therefore have gained greater market share than oil, LNG, and battery-electric. If ammonia succeeds as the carbon-neutral fuel of choice in the shipping sector, this new demand will be roughly equivalent to 200 million tons of ammonia per year, more than today's total global production.
Siemens Gamesa, the world's largest wind turbine manufacturer (by installed capacity), has announced a partnership with local climate innovation fund Energifonden Skive to investigate the production of ammonia from wind power at an eco-industrial hub in Denmark's "Green Tech Valley." The announcement describes "an agreement to jointly explore eco-friendly ammonia production as a way to store surplus electricity from wind turbines. The goal: a pilot plant at GreenLab Skive."
Last week, OCP Group announced plans to develop green hydrogen and green ammonia as sustainable raw materials for use in fertilizer production. This includes building pilot plants in both Germany, already under construction, and Morocco, yet to begin construction, as well as "the possible establishment of an African Institute for Solar Ammonia."
McKinsey & Company, the global consulting firm, recently published a report that analyzes the "Decarbonization of industrial sectors," with a focus on the four heaviest emitters: cement, steel, ammonia, and ethylene production.
"We conclude that decarbonizing industry is technically possible ... We also identify the drivers of costs associated with decarbonization and the impact it will have on the broader energy system." Of course, "technical and economical hurdles arise," but the report provides valuable analysis of the economic levers that will be required.
In June, ThyssenKrupp announced the launch of its technology for "advanced water electrolysis," which produces carbon-free hydrogen from renewable electricity and water. This "technology enables economical industrial-scale hydrogen plants for energy storage and the production of green chemicals."
Two weeks later, in early July, ThyssenKrupp announced that it was moving forward with a demonstration plant in Port Lincoln, South Australia, which had been proposed earlier this year. This will be "one of the first ever commercial plants to produce CO2-free 'green' ammonia from intermittent renewable resources."
The German conglomerate is one of the four major ammonia technology licensors, so its actions in the sustainable ammonia space are globally significant.
Two new pilot projects for producing "green ammonia" from renewable electricity are now up and running and successfully producing ammonia.
In April 2018, the Ammonia Manufacturing Pilot Plant for Renewable Energy started up at the Fukushima Renewable Energy Institute - AIST (FREA) in Japan. Earlier this week, Siemens launched operations at its Green Ammonia Demonstrator, at the Rutherford Appleton Laboratory outside Oxford in the UK.
The commercial product coming out of these plants is not ammonia, however, it is knowledge.
While both the FREA and Siemens plants are of similar scale, with respective ammonia capacities of 20 and 30 kg per day, they have very different objectives. At FREA, the pilot project supports catalyst development with the goal of enabling efficient low-pressure ammonia synthesis. At Siemens, the pilot will provide insights into the business case for ammonia as a market-flexible energy storage vector.
A number of green ammonia projects have been announced in the Netherlands since the influential Power-to-Ammonia feasibility study was published in early 2017. Perhaps the most important publication since then, however, is the roadmap published by The Northern Netherlands Innovation Board, The Green Hydrogen Economy in the Northern Netherlands. Its scope, including sections written by consultants from ING, Rabobank, and Accenture, goes well beyond the standard techno-economic analysis and presents a cogent plan for coordinated development of "production projects, markets, infrastructure and societal issues."
Green ammonia features heavily throughout the roadmap, which calls for the construction of 300,000 tons per year of renewable ammonia production in Delfzijl by 2024, as well as for large-scale imports of green ammonia, starting in 2021, which would provide low-cost delivery and storage of carbon-free fuel, cracked into hydrogen, for the Magnum power plant.
The second annual Power to Ammonia conference, which took place earlier this month in Rotterdam, was a tremendous success. It was again hosted by Proton Ventures, the Dutch engineering firm and mini-ammonia-plant pioneer, and had roughly twice as many attendees as last year with the same extremely high quality of presentations (it is always an honor for me to speak alongside the technical wizards and economic innovators who represent the world of ammonia energy).
However, for me, the most exciting part of this year's event was the fact that, for the first time at an ammonia energy conference, all four of the major ammonia technology licensors were represented. With Casale, Haldor Topsoe, ThyssenKrupp, and KBR all developing designs for integration of their ammonia synthesis technologies with renewable powered electrolyzers, green ammonia is now clearly established as a commercial prospect.
Over the last few years, world-scale ammonia plants have been built, restarted, and relocated across the US. The last of these mega-projects began operations at Freeport in Texas last month. No more new ammonia plants are currently under construction in the US, and the received industry wisdom is that no more will begin construction.
However, project developers and ammonia start-ups did not get this memo. With low natural gas prices persisting, they have not stopped announcing plans to build new plants. The difference is that the next tranche of new ammonia plants breaking ground will not be world-scale but regional-scale, with production capacities of perhaps only one tenth the industry standard. Despite using fossil feedstocks, these plants will set new efficiency and emissions standards for small-scale ammonia plants, and demonstrate novel business models that will profoundly alter the future industry landscape for sustainable ammonia technologies.
The newest ammonia plant on the planet has opened in Freeport, Texas.
A joint venture between Yara and BASF, this world-scale ammonia plant uses no fossil fuel feedstock. Instead, it will produce 750,000 metric tons of ammonia per year using hydrogen and nitrogen delivered directly by pipeline. The plant's hydrogen contract is structured so that the primary supply is byproduct hydrogen, rather than hydrogen produced from fossil fuels, and therefore the Freeport plant can claim that its ammonia has a significantly reduced carbon footprint.
This new ammonia plant demonstrates three truths. First, low-carbon merchant ammonia is available for purchase in industrial quantities today: this is not just technically feasible but also economically competitive. Second, carbon intensity is measured in shades of grey, not black and white. Ammonia is not necessarily carbon-free or carbon-full, but it has a carbon intensity that can quantified and, in a carbon-constrained economy, less carbon content equates to higher premium pricing. Third, the ammonia industry must improve its carbon footprinting before it can hope to be rewarded for producing green ammonia.
Last week, the International Maritime Organization (IMO) formally adopted its Initial GHG Strategy. This means that the shipping industry has committed to "reduce the total annual GHG emissions by at least 50% by 2050," and completely "phase them out, as soon as possible in this century."
This also means that a global industry is searching for a very large quantity of carbon-free liquid fuel, with a production and distribution infrastructure that can be scaled up within decades. The most viable option is ammonia. How much would be required? Roughly one million tons of ammonia per day.
Six months ago, in September 2017, I reported a $100 million joint venture announcement between Bayer and Ginkgo Bioworks that aimed to engineer nitrogen-fixing microbes, which could be put into seed coatings and provide nutrients to non-legume crops. Now, the joint venture has been named, and Joyn Bio is staffing up. For the ammonia industry, this represents potential demand destruction at a significant scale in the coming decades.
SUMMARY STATUS: Financing Phase
Following years of quiet development, Greenfield Nitrogen launched its financing roadshow in March 2018 and, by mid-May, "has raised about $40 million." If the company succeeds in raising its $103 million equity round, this will be the first plant built with the Linde Ammonia Concept (LAC) technology for regional-scale ammonia production.
In December 2017, IFFCO Canada relaunched with new development partners, new design, and a new name: ProjetBécancour.ag Limited Partnership. The project, first announced in 2012, was originally a $1.2 billion urea plant, but is now being reconfigured as a methanol-urea plant.
Earlier this month, I had the pleasure of speaking at the International Fertilizer Association's (IFA) conference on the subject of Innovations in Ammonia. A key point was the benefit of technology diversification: as with any portfolio, whether an investment account or a global industry's range of available technologies, concentration in any area represents risk, and diversification represents resiliency. Unfortunately, the ammonia industry's defined path for emissions reductions through 2050 requires an increasing dependency upon one technology and one carbon-based feedstock. This represents significant risk in tomorrow's carbon-constrained markets.
This article features five charts that aim to demonstrate why the industry's focus on energy efficiency is insufficient as the only measure of technology improvement, why it is better to optimize rather than maximize, and why market evolution is supporting investment decisions in sustainable ammonia synthesis technologies.
A chemicals technology firm in Belgium recently launched its vision for using green ammonia for "energy harvesting." The Dualtower is a new kind of wind turbine, under development by Arranged BVBA, that will use wind power to produce and also store hydrogen and nitrogen. These gases are "harvested" as ammonia, which becomes the energy carrier that allows large-scale renewable energy to be transported economically from remote locations with excellent renewable resources to centers of power consumption.
Arranged's Dualtower is ambitious and, perhaps, futuristic but it illustrates three powerful concepts. First, the vast untapped scalability of renewable power. Second, the benefits of using ammonia as an energy carrier, to improve the economics of large-scale, long-distance energy transportation relative to every other low-carbon technology. The third concept is simply that every idea has its time, and now may be the time for ammonia energy. What was once futuristic, now just makes sense.
This week, the government of South Australia announced a "globally-significant demonstrator project," to be built by the hydrogen infrastructure company Hydrogen Utility (H2U). The renewable hydrogen power plant will cost AUD$117.5 million ($95 million USD), and will be built by ThyssenKrupp Industrial Solutions with construction beginning in 2019.
The plant will comprise a 15 MW electrolyzer system, to produce the hydrogen, and two technologies for converting the hydrogen back into electricity: a 10MW gas turbine and 5MW fuel cell. The plant will also include a small but significant ammonia plant, making it "among the first ever commercial facilities to produce distributed ammonia from intermittent renewable resources."
A new study examines the technologies needed to produce renewable ammonia from offshore wind in the US, and analyzes the lifetime economics of such an operation.
This is the latest in a years-long series of papers by a team of researchers from the University of Massachusetts, Amherst, and Massachusetts Institute of Technology (MIT). And it is by far the closest they have come to establishing sustainable ammonia as being cost-competitive with fossil ammonia.
The list of investment drivers for building new ammonia plants in the US over the last few years was short, beginning and ending with cheap natural gas. Markets change, however, and the investment drivers for the next generation of new ammonia plants might include low cost electrolyzers, low cost renewable power, carbon taxes, and global demand for ammonia as a carbon-free energy vector.
For this to make sense, however, ammonia needs to be produced without fossil fuel inputs. This is perfectly possible using Haber-Bosch technology with electrolyzers, but today's wind and solar power plants exist on a smaller scale than could support a standard (very big) Haber-Bosch plant. So, to produce renewable ammonia, small-scale ammonia production is essential.
This time series chart shows the capital intensity of today’s ammonia plants. Together, the data illustrate competitive advantages of alternative investment strategies, and demonstrate a shift away from the prior trend toward (and received wisdom of) monolithic mega-plants that rely on a natural gas feedstock.
The developers behind the proposed world-scale ammonia plant in Topolobampo, Mexico, are quietly moving forward again.
This illustrates how hard it can be to challenge unwanted industrial development.
This also illustrates the local impact of a national statistic. The US became "a net exporter of natural gas on an annual basis in 2017 for the first time since 1957," in part due to new pipelines to Mexico, which benefitted from industrial anchor customers creating a future market for that gas.
Thus, Topolobampo ammonia: vertical integration of the value chain.
The urea brownfield in Beulah, North Dakota, has been under construction since mid-2014. It didn't start-up in early 2017, as originally scheduled, but it is now, finally, more-or-less finished, and its owners have announced a new schedule for the start of production.