In early April the Business Network for Offshore Wind held its 2018 International Offshore Wind Partnering Forum in Princeton, New Jersey in the U.S.. Ammonia energy was not on the agenda, at least as a matter of formal programming. But it did come up during a panel session entitled “Offshore Wind Energy Hydrogen Production, Grid Balancing and Decarbonization.” We know this because Steve Szymanski, Director of Business Development for Proton OnSite (a subsidiary of Norway’s Nel ASA), was on the panel and says he was the one to bring it up. The topic attracted “a lot of interest and a lot of good questions,” Szymanski said. Nel is an industry member of the NH3 Fuel Association.
The second annual Power to Ammonia conference, which took place earlier this month in Rotterdam, was a tremendous success. It was again hosted by Proton Ventures, the Dutch engineering firm and mini-ammonia-plant pioneer, and had roughly twice as many attendees as last year with the same extremely high quality of presentations (it is always an honor for me to speak alongside the technical wizards and economic innovators who represent the world of ammonia energy).
However, for me, the most exciting part of this year's event was the fact that, for the first time at an ammonia energy conference, all four of the major ammonia technology licensors were represented. With Casale, Haldor Topsoe, ThyssenKrupp, and KBR all developing designs for integration of their ammonia synthesis technologies with renewable powered electrolyzers, green ammonia is now clearly established as a commercial prospect.
Over the last few years, world-scale ammonia plants have been built, restarted, and relocated across the US. The last of these mega-projects began operations at Freeport in Texas last month. No more new ammonia plants are currently under construction in the US, and the received industry wisdom is that no more will begin construction.
However, project developers and ammonia start-ups did not get this memo. With low natural gas prices persisting, they have not stopped announcing plans to build new plants. The difference is that the next tranche of new ammonia plants breaking ground will not be world-scale but regional-scale, with production capacities of perhaps only one tenth the industry standard. Despite using fossil feedstocks, these plants will set new efficiency and emissions standards for small-scale ammonia plants, and demonstrate novel business models that will profoundly alter the future industry landscape for sustainable ammonia technologies.
The United States Congress passed a measure on February 9 that could galvanize the production of low-carbon ammonia in the U.S. The measure, included within the Bipartisan Budget Act of 2018, amends Section 45Q of the Internal Revenue Code, titled “Credit for Carbon Dioxide Sequestration”. That section, originally adopted in 2008, created a framework of tax credits for carbon capture and sequestration. 45Q’s impact in the intervening years has been minimal, an outcome attributed by experts to the relatively low prices assigned to CO2 sequestration and the fact that tax credits would be allowed only for the first 75 million tonnes of sequestered CO2. The new legislation increases the tax credit per tonne of CO2 placed in secure geological storage from $20 to $50, and for CO2 used for enhanced oil recovery from $10 to $35. It eliminates the credits cap altogether. With these changes, it now seems possible that low-carbon ammonia could find itself on an equal economic footing with “fossil” ammonia – and this could have consequences well beyond American agricultural markets.
The newest ammonia plant on the planet has opened in Freeport, Texas.
A joint venture between Yara and BASF, this world-scale ammonia plant uses no fossil fuel feedstock. Instead, it will produce 750,000 metric tons of ammonia per year using hydrogen and nitrogen delivered directly by pipeline. The plant's hydrogen contract is structured so that the primary supply is byproduct hydrogen, rather than hydrogen produced from fossil fuels, and therefore the Freeport plant can claim that its ammonia has a significantly reduced carbon footprint.
This new ammonia plant demonstrates three truths. First, low-carbon merchant ammonia is available for purchase in industrial quantities today: this is not just technically feasible but also economically competitive. Second, carbon intensity is measured in shades of grey, not black and white. Ammonia is not necessarily carbon-free or carbon-full, but it has a carbon intensity that can quantified and, in a carbon-constrained economy, less carbon content equates to higher premium pricing. Third, the ammonia industry must improve its carbon footprinting before it can hope to be rewarded for producing green ammonia.
Six months ago, in September 2017, I reported a $100 million joint venture announcement between Bayer and Ginkgo Bioworks that aimed to engineer nitrogen-fixing microbes, which could be put into seed coatings and provide nutrients to non-legume crops. Now, the joint venture has been named, and Joyn Bio is staffing up. For the ammonia industry, this represents potential demand destruction at a significant scale in the coming decades.
The NH3 Fuel Association has exciting plans for the 15th annual NH3 Fuel Conference!
Our 2018 offering will have much in common with the 2017 edition, but will also embody significant departures. As was the case in 2017, our annual event will be held over two days, scheduled in alignment with the American Institute of Chemical Engineers (AIChE) Annual Meeting. The key difference for 2018 is that it won’t be a single two-day conference; rather it will take the form of two separate conferences held on consecutive days.
On October 31, we will host the NH3 Energy+ Topical Conference within the AIChE Annual Meeting in Pittsburgh, Pennsylvania. And on the next day, November 1, we will present the inaugural NH3 Energy Implementation Conference, also in Pittsburgh albeit at a separate venue.
The Topical Conference’s call for abstracts is now open and interested parties can submit their abstracts through the AIChE Web site.
At the 2017 NH3 Energy+ Conference, graduate student Doga Demirhan reported on an ongoing investigation at the Energy Institute at Texas A&M University. The work involved evaluation of options for an ammonia production system and concluded that biomass could be an economically viable feedstock under current, real-world conditions. This is a notable outcome. Just as notable is how it was reached.
A new study examines the technologies needed to produce renewable ammonia from offshore wind in the US, and analyzes the lifetime economics of such an operation.
This is the latest in a years-long series of papers by a team of researchers from the University of Massachusetts, Amherst, and Massachusetts Institute of Technology (MIT). And it is by far the closest they have come to establishing sustainable ammonia as being cost-competitive with fossil ammonia.
The U.S. Department of Energy H2@Scale program’s November 2017 workshop in California included mention of ammonia as a constituent of a future hydrogen economy. It also highlighted the relevance ammonia energy could have in California.
California stands out globally as a large economy that is strongly committed to development of a hydrogen economy. The state’s strategy for hydrogen-powered transportation involves reducing the production cost of renewable hydrogen and the capital and operating costs of hydrogen fueling stations. It does not explicitly address the cost of intermediate hydrogen logistics.
The question of cost is of utmost importance because California has so far put $120 million of public funds into hydrogen fueling stations and intends to invest an additional $20 million per year through 2022. The state’s aspiration is to move to a point where hydrogen that is used as a motor fuel is free of public subsidy. So it clearly behooves the state to investigate how ammonia could be used as a cost-reducing energy carrier.
Toyota is active in California’s hydrogen movement and has announced plans to build a renewable hydrogen plant that will use cow manure as a feedstock. A project with a different conception, one that draws upon the solar and wind resources of the Mojave Desert to produce renewable hydrogen and logistically advantaged ammonia, would align better with the state’s sustainability objectives.