The International Energy Agency (IEA) has just published Energy Technology Perspectives 2017, the latest in its long-running annual series, subtitled “Catalysing Energy Technology Transformations.”

In this year’s edition, for the first time, ammonia is featured in two major technology transformations. First, ammonia production is shown making a transition away from fossil fuel feedstocks and towards electrification, using hydrogen made with electrolyzers using renewable power. And, following this assumption that sustainable ammonia will be widely available in the future, the IEA takes the next logical step and also classifies ammonia “as an energy carrier,” in the category of future “electricity-based fuels (PtX synthetic fuels).”

The inclusion of this pair of technology transformations represents a major step towards broader acceptance of ammonia as an energy vector, from the perspectives of both technical feasibility and policy imperative. While the 2017 report features these only in small ways some decades in the future, it’s important to recognize that the 2016 report included neither of them. The IEA is on a learning curve regarding ammonia energy, as are so many organizations today, and it will be interesting to see to what extent the 2018 report gives ammonia energy an increasingly important and imminent role in the energy economy of tomorrow.

The IEA’s Energy Technology Perspectives
The IEA aims to provide “authoritative research and analysis on ways to ensure reliable, affordable and clean energy,” for its OECD member countries. Energy Technology Perspectives is one of its primary tools for distributing “strategic guidance on energy technology and policy … keeping IEA stakeholders informed about technological trends, advances and opportunities, while presenting various scenarios for technology deployment that can efficiently meet policy objectives.”

New policy objectives are emerging as the energy sector sits on the verge of a historic transformation, driven by technological progress and evolving political, economic and environmental issues … The Paris Agreement on climate change, signed by over 190 countries, demonstrates the new expectations from societies for the energy sector. This international agreement’s ambitious climate mitigation target implies drastic alterations to the way the energy sector needs to consider its own development.

The unique value of IEA analysis is that in all its research, the organisation never loses sight of energy security imperatives, with a focus on solutions that can also improve affordability and sustainability. ETP 2017 analyses various energy sector development paths to 2060, each with different implications for the development and deployment of energy technologies and for energy policy … our analysis continues to focus on understanding how a portfolio of technologies can be nurtured to effectively address multiple energy policy objectives.

The first point to note regarding the IEA’s ammonia sector development path over the coming decades is that, while energy intensity (efficiency) delivers small, incremental improvements, the carbon intensity of global ammonia production is profoundly altered by 2060.

According to the set of projections that are consistent with the Paris Agreement (“B2DS”), the specific energy consumption (SEC) will shrink a bit to 10.7GJ per metric ton of ammonia by 2060 (note that this excludes feedstock energy), but the CO2 footprint of ammonia production will be drastically reduced by 96%, to just 0.1 tons of CO2 per ton of ammonia (this number is currently more than 2 tons of CO2 per ton of ammonia).

ETP2017‘s three scenarios, through 2060
It is crucial to recognize that the three scenarios in the IEA’s analysis are not forecasts or predictions, but illustrations of what might be done to meet certain stated targets. ETP2017 aims “to demonstrate what types of measures and what level of commitment would be required to attain specific policy goals,” with a particular focus on the Paris Agreement.

The first pathway is based on the actual policies that exist today, which ETP2017 notes fall short of meeting the intended policy goals and national pledges. The second and third pathways look at what might be necessary to actually achieve those goals.

The Reference Technology Scenario (RTS) provides a baseline scenario that takes into account existing energy- and climate-related commitments by countries, including Nationally Determined Contributions pledged under the Paris Agreement. The RTS — reflecting the world’s current ambitions — is not consistent with achieving global climate mitigation objectives, but would still represent a significant shift from a historical “business as usual” approach.

More ambitious decarbonisation requires increased effort and sustained political commitment. The 2°C Scenario (2DS) and the Beyond 2°C Scenario (B2DS) each sets out a rapid decarbonisation pathway in line with international policy goals. The 2DS has been the main climate scenario in the ETP series for many years, and it has been widely used by policy makers and business stakeholders to assess their climate strategies. For the first time, the B2DS looks at how far known clean energy technologies could go if pushed to their practical limits, in line with countries’ more ambitious aspirations in the Paris Agreement.

Three technology pathways for sustainable ammonia
ETP2017 assumes there are three technology pathways by which we could produce the hydrogen for low-carbon ammonia in the future: biomass gasification, steam methane reformation of natural gas with carbon capture and sequestration (SMR-CCS), and using renewable energy to produce carbon-free electrolytic hydrogen.

The report includes a sensitivity analysis to illustrate the levelized cost of ammonia production via each technology under varying utilization rates and power pricing scenarios.

(The IEA also acknowledges that alternative ammonia technologies exist but it doesn’t include them in its projections: “Other electrochemical ammonia production routes are not included … Catalysts could enable photo‐catalysis or photovoltaic‐assisted water electrolysis, which are at the fundamental research phase, to open new research avenues for less CO2‐intensive ammonia and methanol production processes. A number of research projects looking at electrochemical ammonia production are ongoing …”)

Ammonia from renewable electricity
The most promising technology pathway is the electrolytic ammonia, made using hydrogen produced by splitting water powered by renewable electricity. In 2017, the IEA’s analysis sees this technology start to capture market share in 2055, but I suspect that the agency’s learning curve on this issue will reveal itself in future years, when renewable ammonia will play an increasingly important and nearer-term role.

ETP2017 illustrates the growth of the global ammonia market with a graph of process technologies by market share from now through 2060. Of note, naphtha feedstock is completely phased out by 2025 (this mainly affects India) and coal feedstock is almost entirely obsolete by 2045 (this mainly affects China).

Any companies that are currently considering building new ammonia plants using these feedstocks will probably find their capital repayment schedule incompatible with the IEA’s projections.

In 2055, electrolytic ammonia begins to be introduced, and this technology quickly takes off. On the IEA’s graph (Figure 4.13), electrolytic ammonia may only appear in 2055 as a small sliver of purple atop a green mountain of natural gas, but the numbers behind the growth of this sliver are astonishing.

To begin in 2055 and gain the projected 7% share of a 260 million ton per year global market, electrolytic ammonia plants would need to be deployed at an average rate of 3.5 million tons per year, leading to an installed global capacity of 18 million tons per year of electrolytic ammonia by 2060. These are very large numbers but, even so, they only consider ammonia as a fertilizer and do not begin to include the orders-of-magnitude larger scale of the energy market.

Capital expenditure for electrolysers remains high compared with that of steam reforming equipment. Additional technology development and equipment scale-up could bring the costs of this process route down in the future. If these conditions are met, in some regions, future ammonia production capacity could be sited near renewable electricity capacity, as the ammonia can be stored and transported more easily than hydrogen …

Most of the innovative low‐carbon processes needed to achieve the B2DS pathway have not yet been fully commercialised … Without major deployment of new low‐carbon processes, the 2DS and B2DS will not be achievable. Bringing these technologies and processes to commercial deployment will require significant investment in research and development (R&D) as well as a major effort to deploy innovative processes across the industry sector.

The IEA’s full Energy Technology Perspectives 2017, published in June 2017, is available to IEA subscribers through the agency’s website.