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.
Last month, a heavyweight consortium of local and global companies announced plans to collaborate on a project to design, build, operate, and evaluate a demonstration plant to produce "green ammonia" from water, air, and renewable energy in The Netherlands.
This is one practical outcome of last year's Power-to-Ammonia study, which examined the economic and technical feasibility of using tidal power off the island of Goeree-Overflakkee in Zuid-Holland to power a 25 MWe electrolyzer unit, and feed renewable hydrogen to a 20,000 ton per year green ammonia plant.
This new demonstration plant phase of the project will still be led by the original developer, Dutch mini-ammonia plant developer Proton Ventures. However, its partners in the venture now include Yara and Siemens, as well as speciality fertilizer producer Van Iperen, and local sustainable agricultural producer, the Van Peperstraten Groep.
The Institute for Sustainable Process Technology (ISPT) recently published a detailed analysis of three business cases for producing renewable ammonia from electricity: Power to Ammonia. The feasibility study concludes that, in the near term, ammonia production using clean electricity will likely rely on a combination of two old-established, proven technologies: electrolysis and Haber-Bosch (E-HB). To reach this conclusion, however, the study also assessed a range of alternative technologies, which I summarize in this article.
The Power-to-Ammonia feasibility study includes an assessment of the costs and benefits of producing ammonia from renewable energy at OCI Nitrogen's existing production site in Geleen.
Of all the companies who joined forces in the Power-to-Ammonia project, OCI is the only ammonia producer. Its business case for making carbon-free ammonia is especially interesting therefore: not just because of the company's deep understanding of the ammonia market and available technologies, but also because it faces corporate exposure to the financial, operational, and social risks of relying upon a fossil-fueled technology in a carbon constrained future.
Goeree-Overflakkee, in the southwest corner of The Netherlands, already produces more renewable power than it can consume. But, by 2020, this small island will generate a full 300 MWe of solar and wind, which far "exceeds the electricity demand on the island, rated at maximum 30 MWe peak."
Stedin, the local grid operator, has the expensive task of integrating these and future renewable resources into its electricity distribution system.
The recent Power-to-Ammonia study included a detailed analysis of Stedin's business case for producing renewable ammonia as a way to store and transport this electricity - enabling the island to become a net exporter of clean energy.
The Institute for Sustainable Process Technology has just published a feasibility study that represents a major step toward commercializing renewable ammonia.
It examines the "value chains and business cases to produce CO2-free ammonia," analysing the potential for commercial deployment at three companies with existing sites in The Netherlands: Nuon at Eemshaven, Stedin at Goeree-Overflakkee, and OCI Nitrogen at Geleen. The project is called Power to Ammonia.
The team behind it is an industrial powerhouse with serious intentions, and this feasibility study is the first part of their plan: next come the pilot plants and demonstrations. As OCI Nitrogen explains, "there are still many hurdles to be overcome. By setting up pilots for this new technology, we can identify these and find ways to solve them."
To make urea, fertilizer producers combine ammonia with carbon dioxide (CO2), but when farmers apply that urea to the soil, an equal amount of CO2 is emitted to the atmosphere. No CO2 is permanently stored or sequestered through the production of urea.
This is a statement of the obvious, I'm told, but it's worth stating for three reasons. First, not everyone knows it. Second, there was zero data in the academic literature supporting the fact, until now (see below). And third, next generation ammonia-urea plants with "zero-emissions" are becoming a reality, despite some of these new technologies relying on fossil fuel feedstocks.