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By Miguel Rico Luengo (aka Lambda), ETH Zürich engineer
In parts one twoWe have now discussed the environmental effects of biofuels, and ammonia. It is now time to address the second and third most important considerations when considering alternative shipping fuels: technical feasibility and economics. This third part will discuss how to synthesize ammonia by electrolysis. We’ll also discuss capacity factors and conclude with an overview of the main ammonia prices. Part 4 will address other implementation considerations for ammonia powered ships, compare costs to biofuels, and provide a high level summary of the entire topic.
Achievable electrolysis efficiencies
Inquisitive readers will wonder why I assumed a 40% penalty factor in solar-to-ammonia-energy parts 1 and 2. To arrive at this figure, I considered the ammonia synthesis methods by Haldor-Topsøe, a catalytic process technology development company that commands a market-leading position in the catalyst and ammonia industries. This Danish company has been developing a number of innovative products. solid oxide electrolyzer cell (SOEC) technology to electrolyze water at high temperatures, and is targeting mass production in 2023 with a 0.5–5 GW factory. The SOEC electrolyzer produces ammonia in conjunction with a Haber-Bosch Reactor, which converts N2 into H2 and N2 to NH3, at a specific electricity consumption around 7.22 kWh/kgNH326 MJ/kg. 6% of this figure is for gas pressure, Haber-Bosch and ammonia refrigeration. It is notable that no air separation unit is required to separate the nitrogen from oxygen in the air. The SOEC electrolyzer does this task. This diagram illustrates the beauty of this integrated process.
SOEC-HB ammonia synthesizing process. Inspired by a Haldor-Topsøe presentation
All in all, Haldor-Topsøe’s ammonia synthesis converts 71.5% of electrical input energy into chemical energy in the form of chilled ammonia. The following table shows other reported water electrolysis efficiency to illustrate why this electricity penalty number seems plausible. Note that H2Pro’s electrolyzer is the only non-SOEC system on the list:
I’ll briefly note that when I tried to verify Helmeth’s LHV efficiency using their stated numbers, I did not arrive at 88.8% efficiency as claimed, but the above 82.9%. Bloom Energy’s efficiency also doesn’t account for a steam input. Sunfire’s claimed numbers are the highest at the system level, but testing in an industrial environment in August of 2020This lends credibility to their technology. Zooming out from the stack to the system level will evidently result in increased power draw, but these auxiliary losses are fairly minimal at an approximate 6–12% of total energy consumption as evidenced across several electrolyzer types by Table 6 of a very exhaustive IRENA report.
Other companies that are developing SOEC technology are Nexceris, Ceres Power and OxEon Energy. Solid-oxide cell technology lends itself to both fuel cell operation (reversible SOOCs) so it is possible that many of those companies currently developing SOFCs might also develop electrolyzers.
Do these numbers violate thermodynamic laws? It is not. The energy input per kilogram of NH3 can not be less than if hydrogen is produced by water electrolysis and Haber-Bosch is used. 21.3 MJ.Methods of electrochemical ammonia synthesizing direct under development would lower this limit to 19.9 MJ/kgNH3, which is just shy of ammonia’s 18.6 MJ/kg LHV energy content. Haldor-Topsøe’s 26.0 MJ/kgNH3 are therefore well within thermodynamic limits.
The cost of an electrolyzer is not an issue
Hopefully I’ve convinced the reader that the assumed conversion efficiencies are realistic, but how about the costs? Costs are prohibitive and efficiency is meaningless. Contrary to my assumptions, electrolyzer cost are not negligible. They aren’t a deal breaker. Let’s take a closer look.
A recent study by the European Technology and Innovation Platform for Photovoltaics (ETIP PV) assumed 2021 electrolyzer costs of €400/kW. This figure exceeds IRENA’s 2020 study numbers of $450/kW, a price level that covers the full system cost, “including the electrolyzer stack, balance of plant (BoP), installation, civil works, grid connection, and utilities.” Taking the ETIP-PV study’s Rajasthan electrolyzer capacity factor of 32.2% (closest to Solar Star PV farm’s proven 32.8% CF), we obtain an approximate electrolyzer cost contribution to the levelized cost of hydrogen (LCOH) of ¢0.57/MJ. The ETIP PV study’s base growth scenario projects an average system electrolyzer CAPEX at $260/kW by 2030. This seems conservative, especially when you consider Stiesdal’s goal of serial production. €200/kW alkaline electrolyzers by 2023. This would be approximately $330/kW at system level, which includes BoP for accounting for a 70% electrolyzer-stack contribution to the system cost. This percentage was extrapolated from Figure. 10 of yet another IRENA report. That is, to reach the 2030 ETIP-PV study’s base growth numbers, we will only need to cut $70 in CAPEX costs in 7 years. Further, 2025 cost projections of the ETIP-PV’s fast-growth scenario will be reached in 2023 by Stiesdal. The study’s numbers thus trail 2 years behind near-term industry targets. Even BNEF projects $115/kWe prices 2030 China: Alkaline electrolyzers If these are stack-level costs, the cost would be $165/kW at system level (i.e. almost $100/kW less than the ETIP-PV study).
Don’t be discouraged if you only read the last paragraph. All of it is meant to convey that the ETIP-PV study’s projections present a more than adequate assessment of solar hydrogen cost reductions. The bottom line is that neither capital costs nor capacity factors will prevent the cost reductions of renewable hydrogen (and ammonia) in the future. IRENAA minimal cost reduction is also possible for an increase in electrolyzer annual full loads hours from 3200h to 4200h (Fig. ES1 and 1. Agora Energiewende (Fig. 2) supports this assessment.
You can draw relevant parallels with the solar industry. A decade ago, solar PV couldn’t compete with other energy generation technologies at utility scale. The capacity factor wasn’t the problem, the high installation costs were. While capacity factors have not improved in the past, costs have plummeted. New nuclear energy installations can attest to the fact that low costs do not come with high capacity factors. Instead, they are achieved with low CAPEX due to mass industrialization and deployment. Solar is quickly becoming the most affordable energy source. Electrolyzers will benefit from the same cost reduction phenomenon as solar because they are manufactured systems with similar operational capacities factors to solar.
Even if capacity factors were to be crucial in lowering hydrogen production cost, there would be many sites all over the world that had a combination of both. wind solar resources. These regions include ChileLarge parts of Australia, South Africa and Namibia, as well as Kazakhstan, are located in the vicinity of the Tibetan Plateau. Also relevant would be Mauritania, Morocco, Sudan, Egypt, and the Horn of Africa, all of which lie in the immediate vicinity of some of the world’s busiest shipping lanes. Bids for 24-hour solar electricity (hybrid PV-CSP), are coming in at $39.99/MWhIt is possible that solar electricity could reach $30/MWh or even $20/MWh in the near future. Offshore wind, another energy source that’s enjoying sustained cost reductions, has demonstrated capacity factors of 54% As an average over 2 years of operation.
What about water use in arid areas? Topography and other considerations allow for the supply of water to the electrolysis process. pumped hydro with desalination. This system could produce fresh water for industry and agrivoltaic crops, as well as increase the electrolyzer capacity factor. Dry cooling would be used to meet cooling needs. coolinga technology that is particularly suited to systems like SOECs that lose heat at high temperatures.
A summary of costs
The literature is sparse and estimates vary greatly on transportation and distribution costs. I chose the more expensive of the two logistics cost studies for calculationOf the full costs. Without further ado, here’s the relevant chart summarizing the main costs, including cost targets by three commercial entities as well as Lazard’s The most recent numbers:
Here is a summary of all logistics costs and the dominant ammonia synthesis.
The IEEJ transportation costs do not just cover the long journey from the Middle East and Japan with a relatively small fleet of 11 and 19 vessels in 2030 and 2035, respectively. They also include distribution of the ammonia to electricity plants for production. These last costs are not included in this analysis, which focuses on ammonia used by ships that dock at ports. Scaling up ammonia consumption across the entire shipping industry would definitely reduce the cost per unit of ammonia carrier ship. To service the global market, more than 19 ammonia-carrier ships are required.
Evidently, cargo ships cannot make short detours to tank from ammonia production sites because of the ammonia carrier ship requirements. However, multiple Middle Eastern and North African countries are so close to one of the world’s main shipping routes (Asia-Europe) that transportation costs in this case would virtually disappear. The result is a feasible ¢1.35/MJ,NH3,LHV for $20/MWh electricity.
The unstoppable power of solar energy is evident
If you are skeptical that continuing electricity cost reductions will result in a more widespread $10/MWh solar energy LCOE, then it is worth considering that Chile announced in August 2016 a record-low, unsubsidized bid price for a 120 MW utility scale PV project at $29.1/MWh. Five years later, in April 2021, Al Shuaiba PV project in Saudi Arabia with 600 MW was announced to sell power at $10.4/MWh. It is located in a region with lower solar irradiances than Atacama. This should be a warning sign to avoid betting on PV costs continuing their downward spiral at a price that is almost a third of the original price. Projecting the average 1979–2020 US inflation rate of 3.5% until 2040 would raise today’s best PV PPA costs to $19.99/MWh in 2021 dollars. This LCOE assumes there will be no further cost reductions in solar PV. This assumption would be historical. The average solar PV learning rate, which is the cost decrease associated each doubling in cumulative capacity, was 40% between 2006 and 2020, the historical average. 23.8%. Yet, as of 2020, solar PV produced less than 4% of worldwide electricity. Many industries are still to be electrified, and most of the world is still developing economically, so it would be foolish not to expect a few more doublings in installed power.
This concludes this third part. The final article will compare all relevant shipping fuels and dispel any doubts about ammonia’s viability for shipping. It will also present a roadmap of the future direction of the industry.
Featured image Public Domain imageModified by the author
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