Yara’s Solar Ammonia Plant is a Key Step toward Global Trade in Renewable Energy

By Stephen H. Crolius on October 05, 2017

Ammonia Energy Anniversary Issue: a “top five” development in economic implementation

In the last 12 months …

Yara’s Australian unit announced plans to build a pilot plant to produce ammonia using solar power. This is a key step in Australia’s efforts to develop its economy around clean energy exports, and could lead to a new system of global trade in which renewable ammonia is an energy commodity.

Demonstration plant: cost-competitive electrolyzers, solar ammonia

In March 2017, International Energy Agency Senior Analyst Cedric Philibert reached several striking conclusions in an essay on the economics of producing hydrogen from renewably generated electricity. First, industry may have already reached an inflection point where the unsubsidized cost of producing renewable hydrogen via electrolysis in certain geographies can compete with the cost of producing hydrogen via steam methane reforming. Second, the geographies where this could apply are those where producers can draw on multiple renewable sources – for example, wind and photovoltaics – so that they can obtain electricity at a low price and achieve high utilization of their plant capacity. Third, given the fact that many desirable production locations are remote from end-use markets, ammonia could be employed as a well-proven, low-cost option for linking producer and customer. Finally, if ammonia were to be employed not just as a fertilizer but as an energy carrier, a whole new system of global trade in renewable energy could emerge.

Click to learn more. Image source: Siemens Pacific.

In one potential trade pairing, officials are examining options for meeting Japanese energy needs with Australian renewable resources. Australia is already one of Japan’s leading suppliers of coal and natural gas. Agencies such as the Australian Renewable Energy Agency (ARENA) made it clear during the year that the country intends to build on this position. 

In another potential trade pairing, the CEO of Siemens Pacific wrote of plans to export Australian solar ammonia to Germany, describing “projects in discussion right now” to develop a 10,000 km2 solar field in the Australian desert that would generate 500 GW. This would be enough to produce 1 million tons of ammonia per day, roughly twice today’s total global production capacity, for export as a carbon-free energy commodity.

These moves set the stage for Yara’s September 2017 unveiling of plans for a “solar ammonia” demonstration near its plant in Pilbara in Western Australia. The company’s production concept appears to dovetail with Nel Hydrogen’s recent moves toward large-scale deployment of electrolyzers (cited by Philibert in his essay) with associated reductions in capital cost burden. Yara sees the potential of solar ammonia unfolding across several stages, from reduction of the company’s own carbon footprint to entrée of green ammonia into global energy markets.

Ammonia Energy reporting

A year in review

To mark the first anniversary of Ammonia Energy, we reviewed the most important developments from the last 12 months. This “top ten” list spans two areas: five are technology advances that will arguably produce the most important opportunities for ammonia energy, and five are economic implementation steps that are arguably the most significant moves toward real-world deployment.

Technology advancement:

Economic implementation: