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The role of Ammonia in the North West Hydrogen Economy
The role of Ammonia in the North West Hydrogen Economy
Global production of ammonia currently stands at 176 million tonnes per year. Most ammonia is produced at large scale via the Haber Bosch process where nitrogen and hydrogen react at pressures of up to 200 bar. The carbon intensity of the ammonia is dependent on the source of hydrogen. Almost all ammonia today is produced using natural gas or LPG as a feedstock and reformed to produce hydrogen. In order to produce low carbon ammonia, a low carbon hydrogen source is required.
The cost of low carbon hydrogen and therefore low carbon ammonia is largely driven by the economics and scale of production, with the input cost of renewable electricity for electrolytic “green” production or natural gas for CCUS-enabled “blue” production being the most significant factors.
These costs are likely to be largely geographically driven. The low cost of solar energy in the Middle East and Australia means that hydrogen imported from these areas could be competitive with domestic production and could support the UK as it looks to meet domestic hydrogen demand. Figure 2 shows an evaluation of the cost of hydrogen production from natural gas in different geographies.
The CAPEX and OPEX of the reformation and capture process is the same for all locations, however the cost of gas has a large impact on the cost of hydrogen and varies by geography. The fragility of gas prices has been well documented in recent months, with the rapid rise in prices globally.
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