This special interest group is for professionals to connect and discuss all types of carbon-free power alternatives, including nuclear, renewable, tidal and more.

Publication

IRENA | Innovation Outlook, Renewable Ammonia

image credit: Irena AE
Charley Rattan's picture
World Hydrogen Leader Charley Rattan Associates

UK based offshore wind & hydrogen corporate advisor, broker and trainer; Faculty member World Hydrogen Leaders. Delivering global hydrogen and offshore wind corporate investment brokerage....

  • Member since 2019
  • 3,172 items added with 2,126,668 views
  • May 21, 2022
  • 313 views

Access Publication

 

Policies and recommendations

Setting out the appropriate policy frameworks and support mechanisms is crucial to reaching the goals of carbon emission mitigation, sustainability and energy security. Adequate investment in enduring and capital-intensive renewable energy technologies is not likely to emerge without giving confidence to investors through strong, predictable, forward-looking and decisive policies.

Put a sufficiently high price on CO2 emissions A CO2 penalty of around USD 60-90 per tonne of CO2 is required to bridge the gap between fossil-based ammonia with unmitigated emissions and fossil-based ammonia with CCS. A CO2 penalty of up to USD 150 per tonne of CO2 would bridge the gap between fossil-based and renewable ammonia (see section 2.3). In the long term, renewable ammonia is expected to be cost competitive with fossil-based ammonia with CCS. Thus, CCS can play a role in decarbonising current ammonia facilities, but newly built fossil-based ammonia plants with CCS may result in stranded assets in the long term, unless supported by very low natural gas prices. 102 INNOVATION OUTLOOK

Translate political will into policies With or without a price on CO2 emissions, strong, stable and sustained regulatory measures for fuel standards and renewable quotas or mandates will facilitate price incentives to provide stability of sustained growth and investment. These can be supported by robust certification that can account for the carbon intensity of ammonia. Suitable policy instruments are paramount to ensure equitable tax treatment and a long-term guaranteed price floor for wider adoption of renewable ammonia and other promising sustainable fuels.

While energy tax reduction can be provided for renewable fuels, including renewable ammonia, fuel excise and other taxes should be based on energy content and not volume (e.g. USD per kilowatt-hour [kWh], not USD per litre). For example, a contract for difference (CfD) scheme in which advanced renewable fuel production projects bid for CfDs, and the winners are awarded them in so-called reverse auctions (lowest bid wins) is an appropriate taxation policy that can “make or break” alternative fuels; this could motivate investments as a meaningful production support system.

Moderate carbon taxation levels can be obtained via earmark and return principles. Focus on deployment of existing renewable ammonia technologies The current focus should be on implementing existing technologies at scale rather than developing new, breakthrough technologies. The latter is not necessarily required, as most elements in the renewable ammonia value chain have already been demonstrated. Rather, combinations of technologies should be demonstrated at relevant scale and under relevant conditions, which is the breakthrough required. This concerns innovations such as improving the flexibility of the ammonia synthesis loop, improving the performance of the electrolyser, improving the performance of ammonia crackers and driving down the costs of today’s technologies. Near-term market creation through the deployment of existing technologies will accelerate innovation in the longer term.

Support the development of entire supply chains Funding programmes should extend their scope to include ammonia and other hydrogen carriers. Programmes that focus on a single technology (e.g. hydrogen or solar panels) tend to support early-stage R&D and pilot projects. However, broader funding programmes that focus on applications for these technologies (e.g. electrofuels, energy storage) support deployment by connecting the value chain across production, distribution and use. Programmes may also wish to allow foreign participation, to support development of global supply chains, recognising that demand may not be met by domestic production.

Devise trade strategies that mitigate supply risks To create jobs and encourage competitive new industries for renewable ammonia in both producing and consuming regions, international co-operation must be fostered – for example, between project developers, ammonia users and ammonia production companies.

Increasing the investments in renewable ammonia production capacity could broaden the energy and feedstock supply range and minimise political risks. Invest in electrolyser manufacturing Substantial scale-up of electrolyser factories is required.

The reported electrolyser production capacity in 2020 was only 2.1 GW per year (ESMAP and World Bank, 2020), but 40-65 GW per year will be required to supply the volume of hydrogen needed for decarbonising the fertiliser, power and maritime sectors with renewable ammonia. Thus, multiple gigawatt-scale electrolyser factories will be required. The development of such large-scale factories will inherently decrease the cost of electrolyser production due to an accelerated learning curve and economies of scale, which will in turn make renewable ammonia more competitive with fossil-based alternatives.

 

Charley Rattan's picture
Thank Charley for the Post!
Energy Central contributors share their experience and insights for the benefit of other Members (like you). Please show them your appreciation by leaving a comment, 'liking' this post, or following this Member.
More posts from this member
Discussions
Spell checking: Press the CTRL or COMMAND key then click on the underlined misspelled word.

No discussions yet. Start a discussion below.

Get Published - Build a Following

The Energy Central Power Industry Network is based on one core idea - power industry professionals helping each other and advancing the industry by sharing and learning from each other.

If you have an experience or insight to share or have learned something from a conference or seminar, your peers and colleagues on Energy Central want to hear about it. It's also easy to share a link to an article you've liked or an industry resource that you think would be helpful.

                 Learn more about posting on Energy Central »