Ammonia = Hydrogen 2.0 Conference: panel discussion recap

The Ammonia Energy Association Australia’s Ammonia = Hydrogen 2.0 Conference took place on 22-23 August 2019 in Melbourne, Australia.  The event was held near Monash University on the premises of the Commonwealth Scientific and Industrial Research Organization (CSIRO).  It attracted 115 attendees from industry, government, and research institutions.  Conference feedback I have received to date has been very positive.

The proceedings consisted of an opening session, four presentation sessions, a poster session, and three interactive panel sessions.  The Honourable Lily D’Ambrosio, Minister for Energy, Environment and Climate Change and Minister for Solar Homes for the State of Victoria, gave the opening address.  Shigeru Muraki, Representative Director of Japan’s Green Ammonia Consortium and Executive Advisor to the Tokyo Gas Company, gave the keynote address, “Ammonia, Key Green Energy for Decarbonization.”  (Note that conference presentations are available on an interim basis in a DropBox folder and in the near future will be archived permanently on the Ammonia Energy Association’s website.)

The interactive panel sessions were placed at the end of the program so that important themes from the presentations could be highlighted and integrated.  The themes included:

1. Building an energy export industry using green ammonia
2. Green ammonia as a maritime bunker fuel
3. Green ammonia as grid scale energy storage – battery to the nation

Building an Energy Export Industry Using Green Ammonia

Panelists for the “Building an Energy Export Industry Using Green Ammonia” session were Muraki and Charlotte Rouse of the Australian Renewable Energy Agency (ARENA).  The session was moderated by Doug Macfarlane, a Monash University faculty member.

The session focused on how current players and new entities could combine to build an ammonia-oriented export industry in Australia.  Panelists discussed which industries could lead the process, considering existing brown ammonia manufacturers who are in the process of moving to green (e.g., Yara); other fertilizer producers and distributors; oil and gas companies; and new businesses involved in renewable energy.  Panelists observed that overlapping activity between the traditionally distinct energy and fertilizer industries could spawn “disruption.”  Muraki indicated that the Green Ammonia Consortium does not intend to disrupt the current fertiliser market but rather wishes to create a new market.  Eventually the two markets will flow together.  An important issue raised by the convergence of the fertilizer and energy industries is the ethical implications of using a green energy vector to prolong the life of brown-energy assets such as coal-fired power stations.

Also discussed was the question of whether domestically focused green ammonia market development would need to reach a critical mass before a shift toward exporting could be effected.  Panelists speculated that the scale-up could leave small manufacturers behind.  The prospects for a strong export position were seen as favorable in any case.  Australia’s energy exporters already compete with large-scale energy suppliers on a worldwide basis.  It is not obvious why green ammonia would be different. The potential pie is very large, but demand still needs to be developed via a national hydrogen strategy.

Helpful in this regard would be expedients such as long-term contracts that can reduce business risk for companies that participate in green energy supply.  Japanese companies face similar challenges.  Muraki said that an often-cited ammonia benchmark price of USD $340 per tonne is more expensive than other energy sources in Japan. Government support in the form of subsidies is needed to open the door to green and blue ammonia production.  This is why the Green Ammonia Consortium focuses on factors that affect ammonia price in addition to fundamentals such as safety in handling the commodity.

The panelists also considered the siting of production and logistical facilities in Australia.  One prime location is the Pilbara. Many other sites have electricity, air, water and access to deep water ports.  Australia is not limited by resources but by technology.

Green Ammonia as Maritime Bunker Fuel

Panelists for the “Green Ammonia as Maritime Bunker Fuel” session were Koh Eng Kiong of the Maritime Energy and Sustainable Development Centre of Excellence at the Nanyang Technological University in Singapore, Lars Bryndum of MAN Energy Solutions, and Kenneth Kong of British Petroleum. The session was moderated by Brett Cooper of Renewable Hydrogen Pty.

The discussion started with consideration of liquefied natural gas as a low-carbon competitor to ammonia as a bunker fuel.  There has been speculation that since LNG’s carbon footprint is 25% smaller than that of heavy fuel oil, wholesale adoption of LNG would reduce the environmental scrutiny to which the maritime sector is subject.  Either way, shipping companies are aware that a 25% shrinkage in carbon footprint will fall far short of the reduction that must ultimately occur.  Since companies are averse to stranding large capital investments, leapfrogging directly to a carbon-free bunker fuel will offer the best way forward.

Panelists observed that the maritime industry is driven both by standards and short-term economics. Relative to standards, it will be important to further develop safety protocols and standards for the use of ammonia as a bunker fuel; and to reinforce the need for standards compliance to prevent accidental releases.  Conversion of existing ammonia tankers to operate on ammonia bunker fuel was suggested as an appropriate initial step forward. These tankers already operate under a regime of relevant safety protocols and standards.

Regarding fuel availability, panelists stated that it will be important to have reliable supply of anhydrous ammonia of consistent quality for different kinds of maritime vessels.  Ammonia is already widely available around the world for fertilizer and industrial uses.  The specifications and quality standards currently in place for these applications may be appropriate for maritime bunker fuel. If oil companies want to stay in the game, they will need to follow the demand of maritime industry customers for carbon-free fuel.

The panel considered pathways that might lead to the maritime sector’s adoption of ammonia as a bunker fuel.  One such pathway would be national or regional mandates.  In the United Kingdom, for example, the Clean Maritime Plan mandates that all new vessels ordered from 2025 for service in UK waters should be designed with zero-emissions-capable technologies.  Another potential pathway is represented by the Poseidon Principles and the initiative of the Principles’ banking signatories to incorporate “climate risk” into their lending criteria. Such measures will help, but at the end of the day it will be the ship owners who have to pay for the conversion of existing vessels to operate on ammonia bunker fuel or cover the extra costs of building new vessels that comply with the likes of the Clean Maritime Plan.

The panelists felt that it would be desirable to have an organization in Australia that is similar to the Green Ammonia Consortium in its commitment to “pushing the case” for ammonia in such areas as regulation, policy frameworks, carbon footprint certification, and safety — in the maritime sector and more generally. This is something that was not achieved for the LNG industry.

Green Ammonia as Grid-Scale Energy Storage – Battery to the Nation

Panelists for the “Green Ammonia as Grid-Scale Energy Storage” session were Daniel Roberts of CSIRO and John Bøgild Hansen of Haldor Topsoe.  I served as the moderator for the session.

I framed the session with an interview I recently had with my hometown newspaper, the Bendigo Advertiser.  The resulting story (“‘Green ammonia’ could supercharge hopes for solar, wind energy batteries, Bendigo expert says”) included comparison of a hypothetical ammonia storage facility with a pumped hydro energy storage installation (“Snowy 2.0”) that will be built with backing from private-sector and government interests.  I wanted to make the point in the newspaper and during the session that ammonia could be a practical and economical option for storing renewable energy in large quantities over extended time frames.  The projected energy storage capacity of the Snowy 2.0 facility is 350,000 MWh.  It will have a multi-kilometer footprint and an eight-year construction schedule.  I pointed out that an ammonia facility of similar capacity could be built on four hectares (ten acres) of land with a construction period of five years.

The panel saw pumped hydro as an attractive energy storage option but agreed that chemical energy storage using ammonia also has excellent potential. They cautioned, though, that when power-to-power round-trip efficiency is considered, ammonia falls short of pumped hydro.  This means that a positive business case may depend on some form of subsidy whenever ammonia storage goes head-to-head with pumped hydro.

The panel said that in any case the energy storage picture is a great deal broader than just pumped hydro.  They pointed out that renewable electricity assets will often be located in remote areas that are far from major energy markets and may not even be served by electricity transmission lines.  In these cases, the only viable options will involve chemical energy storage.  Given the difficulties of storing and transporting hydrogen, ammonia may be prove to be the best option.

Hansen pointed out that in Denmark, which has one of the highest penetrations of renewable electricity generation in the world, the need for inter-seasonal energy storage is clear.  Mechanisms are needed to shift wind energy generated in the winter, when the wind blows most strongly, to the summer months when renewable electricity generation is less abundant.

Finally the panel observed that it generally makes more sense to use ammonia derived from electricity as a fuel instead of turning it back into electricity.

Wrap-Up

At the end of the panel review sessions, we took a sense of the room regarding institutionalization of the Australian Ammonia Energy Conference.  We received overwhelming support both in favour of holding the conference again in 2020 and holding it again at the CSIRO premises in greater Melbourne.

John Mott is the Chair of the Ammonia Energy Association Australia.