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Hydrogen Stands Out in BP’s New Strategy

Last week oil major BP released its second quarter financial results – and used the occasion to share the company’s new strategy. “We aim to be a very different kind of energy company by 2030,” the company said, “as we scale up investment in low-carbon, focus our oil and gas production and make headway on reducing emissions.” “Investment in low-carbon” turns out to involve full embrace of the hydrogen paradigm circa 2020: power-to-gas; carbon capture, utilization, and storage; and the possibility of a “hydrogen export” business based on ammonia.

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Green ammonia at oil and gas scale: the 15 GW Asian Renewable Energy Hub

The Asian Renewable Energy Hub will be a 6,500 square kilometer wind and solar farm in Australia's Pilbara desert, producing green ammonia for export beginning in 2027/28. This was recently reported as an investment of AU$ 22 billion (US$ 16 billion). As it says on its website, this is "renewable energy at oil and gas scale." Details recently entered the public domain regarding the project's upstream segment (power generation). Now, its downstream segment (green ammonia production) is coming into focus as well. InterContinental Energy, one of the project backers, represents the Asian Renewable Energy Hub as just one project within its $100+ billion, 50 million ton per year, green ammonia and green methanol production portfolio: "the largest and most advanced portfolio of green hydrogen projects worldwide."

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Solar ammonia, available in Spain from 2021

Last week, Iberdrola and Fertiberia announced plans to start producing green ammonia for “fertilizantes libres de emisiones” (emission-free fertilizers). Iberdrola will invest EUR 150 million to build the 100 MW “Puertollano II” solar field, with a 20 MW electrolyzer bank to produce renewable hydrogen. Fertiberia will “update and modify” its existing Puertollano plant to consume this green hydrogen, reducing its natural gas use by “over 10%,” and producing green ammonia beginning in 2021.

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Saudi Arabia to export renewable energy using green ammonia

Last week, Air Products, ACWA Power, and NEOM announced a $5 billion, 4 gigawatt green ammonia plant in Saudi Arabia, to be operational by 2025. Air Products, the exclusive off-taker, intends to distribute the green ammonia globally and crack it back to “carbon-free hydrogen” at the point of use, supplying hydrogen refueling stations. According to Air Products’ presentation on the project, “our focus is fueling hydrogen fuel cell buses and trucks.” This will be one of the first projects to be built in the industrial hub of NEOM, a futuristic “model for sustainable living.” NEOM is a key element in Vision 2030, Crown Prince Mohammed bin Salman’s plan to diversify the Saudi Arabian economy and reduce dependence on oil revenues. In other words, Saudi Arabia is establishing itself as “a global leader in green hydrogen production and green fuels.”

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Wärtsilä, Repsol, and Knutsen to test ammonia four-stroke engine

This week, engine manufacturer Wärtsilä announced “the world’s first long term, full-scale, testing of ammonia as a fuel in a marine four-stroke combustion engine.” The project will begin in the first quarter of 2021, at the Sustainable Energy Catapult Centre’s testing facilities at Stord, Norway. It is supported by a NOK 20 million (USD 2 million) grant from the Norwegian Research Council.

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Hydrogen in Australia: investments and jobs

There is so much hydrogen news coming out of Australia that it is hard to keep up. At the state level, Tasmania has released its draft plan to increase renewables to 200% of its electricity use by 2040. This marks a serious start to establishing a renewable energy export economy, and includes funding and policy support to ramp up green hydrogen and ammonia production and begin exports by 2027. At the federal level, ARENA announced that its AU$ 70 million funding round for large-scale, “shovel-ready,” renewable hydrogen projects received applications representing over $3 billion of commercial investments. Australia’s renewable hydrogen industry has appetite and momentum, “and we’re seeing a lot of projects ready to be built.” As if to prove the point, two developers in two weeks have each announced hydrogen projects that could produce a million tons per year of ammonia. These are at opposite ends of the low-carbon spectrum: Leigh Creek Energy's in-situ gasification (ISG) coal-to-ammonia plant; and Austom Hydrogen's 3.6 GW green hydrogen export project.

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Industry report sees multi-billion ton market for green ammonia

This week, Argus Media published a white paper on green ammonia. This includes an overview of potential new markets and market volumes, a round-up of green ammonia projects around the world, and an assessment of production technologies and their impact on the ammonia cost curve. Argus estimates that, by 2040, green ammonia could cost just $250 per ton. Argus is an industrial analysis and consulting firm with long experience in the ammonia market, which, traditionally, centers on the fertilizer sector. This white paper therefore provides a welcome commercial perspective on the outlook for ammonia energy.