Power to Ammonia: The Nuon – Eemshaven case

The Institute for Sustainable Process Technology recently published a feasibility study, Power to Ammonia, looking at the possibility of producing and using ammonia in the renewable power sector. This project is based in The Netherlands and is led by a powerful industrial consortium.

I wrote about the feasibility study last month, but it deserves closer attention because it examines three entirely separate business cases for integrating ammonia into a renewable energy economy, centered on three site-specific participants in the study: Nuon at Eemshaven, Stedin at Goeree-Overflakkee, and OCI Nitrogen at Geleen.

Over the next few years, the group intends to build pilot projects to develop and demonstrate the necessary technologies. Next month, however, these projects will be an important part of the Power-to-Ammonia Conference, in Rotterdam on May 18-19.

This article is the first in a series of three that aims to introduce each business case.

The Nuon – Eemshaven case
The first business case looks at the Magnum power plant in Eemshaven, owned by Dutch company Nuon, a subsidiary of Swedish utility Vattenfall. Magnum is a relatively new CCGT (combined cycle gas turbine) power plant, but it represents a problem (or an opportunity) because it was built to burn fossil fuels.

Click to enlarge. ISPT, Power to Ammonia, Figure 3.3: The Need for Renewable Energy Storage and/or Import within the Power Sector, March 2017
Within the context of decarbonizing its economy, Nuon concludes that “additional renewable wind and solar capacity in The Netherlands is not sufficient to meet the CO2 reduction targets.” Nuon identifies two additional energy needs: “Large scale storage and import is required to meet these targets.”

Therefore, as well as integrating more renewable energy and also reducing the carbon intensity of its fossil fuel mix, “chemical storage options are required,” for large amounts of energy over long periods of time (26 to 109 TWh per year).

In addition, carbon-free fuels will need to be imported in significant quantities (between 16 to 71 TWh per year).

The study concludes that “NH3 enables both storage and import and provides a new option for achieving the CO2 reduction targets.” Ammonia therefore provides the carbon-free answer that allows Vattenfall’s “original plans to build a coal gasification unit at the Magnum plant [to be] cancelled.”

In the Netherlands, Vattenfall / Nuon is looking into possibilities to replace fossil gas with carbon-free ammonia produced from wind, sun, water and air … A demonstration facility is planned to be completed in five years.

“As a power company, Vattenfall is very interested in the idea of a carbon-free fuel and the seasonal storage of electricity. We are examining the opportunity to endow our gas-fired power plants with a sustainable future” …

When ammonia is burned, water and nitrogen are released, but no carbon dioxide and little or no nitrogen oxides. To produce the ammonia, water is first split into hydrogen and oxygen by means of renewable electricity. The hydrogen is then converted into ammonia by adding nitrogen from the air using high temperature and pressure.
Vattenfall News, Dutch Gas Plants Made Fossil Free? 03/30/2016

The Power to Ammonia Eemshaven business case examines three separate applications for ammonia at the Magnum power plant:

  1. Producing and transporting low- or zero-carbon ammonia;
  2. Storing excess power as ammonia, in large quantities over long periods of time;
  3. Ammonia storage and combustion, as a fuel for the power plant.

Business Case 1: Low-carbon NH3 production and transportation
This assumes that low-carbon ammonia is being produced remotely from renewable power, or from a natural gas feedstock with carbon capture and sequestration (SMR+CCS), and imported to Eemshaven.

Specifically, the various production technologies / business models assessed are:

  1. “CH4 with CCS to NH3” (SMR+CCS)
  2. “Remote NH3 production from PV-generated electricity” (intermittent solar)
  3. “Remote NH3 production from a baseload / controllable electricity source” (constant geothermal or hydropower)

The study concludes that two of these options are economically viable. With SMR+CCS or baseload renewable like geothermal, “the costs of electricity produced from this NH3 are lower than 150 EUR/MWhe [the benchmark], making it viable for a SDE+ type subsidy regime.”

It also sets a target for technology cost improvements: “The main cost driver for a P2A plant are the electrolysers, being more than 60% of the total CAPEX. A target for cost reduction is 70% of the current base price of 1000 EUR/kW.”

Business Case 2: Storing Excess Power as NH3

Click to enlarge. ISPT, Power to Ammonia, Table 2.3: Comparison of P2A as electricity storage technology with alternatives, March 2017
The study compares electricity storage technology options, demonstrating that ammonia has significant advantages: it is not carcinogenous, doesn’t require cryogenic storage temperatures, suffers minimal losses over time, has a high round-trip efficiency, and benefits from extensive industrial experience.

But, again, the capital cost of electrolyzers creates a challenge:

NH3 can be used to store locally excess renewable electricity at times when prices are low. However, the economic feasibility is only positive if the investments for the electrolysers decreases drastically in combination with a high run times for the plant and a positive business model for such storage. The business model for the storage must be further elaborated …

The resulting NH3 costs will be relatively high due to the relatively low load factor in combination with high investment costs in the NH3 production plant. The business case will become more attractive if the primary response (timescale seconds) and secondary response (timescale quarters of an hour) will be included.

Therefore, next to significant further penetration of variable renewable energy sources (wind and solar) in the electricity system, technological developments aiming at reducing investment costs are required to reach reasonable NH3 prices … (approx. 325-350 EUR/ton).

It should further be noted that a market mechanism or subsidy regime for energy storage needs to be established to make a viable business case.

Business Case 3: NH3 Storage and Combustion

Click to enlarge. ISPT, Power to Ammonia, Table 2.2: Performance Evaluation for the Combustion Options, March 2017
The third section of the Nuon business case examines the available methods for burning ammonia.

Because there is limited research into turbine combustion of ammonia, “the preferred way to use NH3 as a fuel for a CCGT is the convert it back to H2 … by cracking.” (Note: significant progress is being made on direct ammonia combustion in Japan)

“NH3 [direct combustion] would give the highest efficiency, but would require the development of a complete new combustor requiring much time, resources and investments and a probability for high NOx-emissions. The combustor would also be bigger due to the combustion properties of NH3.”

(Note, also: more research from Japan addresses the NOx emission issue.)

Power-to-Ammonia examines two basic options for hydrogen combustion at the Magnum plant. First, co-firing natural gas with 10% hydrogen from cracked ammonia. This would require a 20 ton/hour NH3 cracker, at a total project cost of 50 million EUR. Second, burning 100% hydrogen from cracked ammonia, which would require a 200 ton/hour NH3 cracker, and capex of 246 million EUR.

The first option is deemed uncommercial (“high costs are primarily caused by a combination of relatively high specific CAPEX and a low number of operating hours”). However, the second option meets the benchmark financial performance:

Based on the analysis performed, it can be concluded that [firing 100% hydrogen from cracked NH3] can meet the targeted cost level of 100-150 EUR/MWh(e) … The Nuon Magnum plant will operate approximately 7000 hours per year, which is a significant increase compared to the case in which the Magnum power plant continues to operate on natural gas and comparable to the operating regime of coal fired power stations …

A logical [next] step is to demonstrate the operation of a 20 ton/h NH3 cracker in combination with a Magnum CCGT including the existing DLN-combustors. This avoids initial investment in combustors until the cracker concept is demonstrated. Estimated timeline for the demo is 5 years (start operation in 2021). After successful closure of the demo, the cracker can be scaled up to 200 ton/h. This would take another 5 years, resulting in a COD in 2026. A condition is the this schedule also matches with expected H2-rich combustor developments.

Conclusions – the Nuon Eemshaven case

Limited co-firing of NH3 in Nuon Magnum is economically not attractive due to the limited number of operating hours of the NH3 cracker. If the cracker can be operated continuously for other H2 consumers this might change. 100% NH3 firing is economically feasible with an SDE+ type of subsidy and when sourcing of NH3 against a cost around 300 EUR/ton.

A key question is to what extent the produced H2 will actually be shifted to NH3 in case of excess electricity. Other applications for produced H2 (e.g. use in industry or in the transportation sector) may be available …

As a final remark, in case synergies may be realised with other initiatives related to development of an H2 infrastructure in The Netherlands (e.g. Northern Innovation Board), the business cases may be improved. This should be explored further.

Nonetheless, the plan is to move forward, demonstrating first the 10% hydrogen mix co-firing with natural gas, and then the 100% hydrogen from cracked ammonia: “Nuon aims for co-firing cracked NH3 as a fuel in the Eemshaven CCGT power plant in 2021 and for a full conversion in 2026.”

You can download the full Power to Ammonia feasibility study from the ISPT website.

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