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IEA report: green electricity could produce ammonia at competitive cost

November 9, 2017


Abstract : The cost of ammonia produced from green electricity, which requires only air and water, would be competitive compared with that of natural gas-based ammonia

BEIJING, Nov. 9 (Xinhua) -- The cost of ammonia produced from green electricity, which requires only air and water, would be competitive compared with that of natural gas-based ammonia, according to the report “Renewable Energy for Industry” jointly released by the International Energy Agency (IEA) and China Economic Information Service (CEIS) of Xinhua News Agency on Thursday.

The report suggests that under the most favorable conditions, the cost of producing green ammonia would be around USD 400 per tonne of ammonia (/tNH3), assuming an electricity price of USD 30 per megawatt hour (/MWh) if electricity is available in large enough quantities for the load factor of the electrolysers to be at least 50 percent. The cost under less ideal circumstances would be USD 700/tNH3 with electricity at USD 60/MWh and an electrolyser load factor of 30 percent.

In comparison, natural gas-based ammonia production ranges in cost from about USD 200/t NH3 to USD 600/tNH3, depending when and where it is produced. The cost in the United States is currently as low as USD 200/tNH3 owing to abundant and inexpensive shale gas, between USD 350/tNH3 and USD 400/tNH3 in Europe, and higher in Asian markets. It entails CO2 emissions of 1.7 tCO2/tNH3.

According to the report, ammonia could be shipped from the best resource areas at a cost of USD 40/tNH3 to USD 60/tNH3 depending on distance and vessel size, and would thus remain competitive with ammonia produced in areas with lower-quality resources. Moreover, ammonia-based solid fertilisers or other finished or semi-finished products such as urea could be shipped at significantly lower costs. Overall, green ammonia could be more affordable than conventionally produced ammonia in some cases. (Edited by Zhou Yuran)


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