Industrial demonstrations of ammonia fuel in Japan
By Trevor Brown on March 06, 2017
Most of the ammonia energy projects I write about are in the research and development phase but, as I’ve said before, technology transfer from the academic lab to commercial deployment is moving swiftly – especially in Japan.
Last week, Nikkei Asian Review published two articles outlining plans by major engineering and power firms to build utility-scale demonstrations using ammonia as a fuel for electricity generation. Both projects aim to reduce the carbon intensity of the Japanese electrical grid, incrementally but significantly, by displacing a portion of the fossil fuels with ammonia. The first project will generate power using an ammonia-coal mix, while the second will combine ammonia with natural gas.
Kansai Electric Power and five other utilities will join hands to commercialize technology for burning ammonia with coal in power plants, a method that could reduce carbon dioxide emissions by at least 20%.
The group, which also includes Osaka Gas and Chubu Electric Power, will participate in government research on ammonia as an energy source. The goal is to generate power efficiently from a mixture of ammonia and coal …
Field testing is slated to begin this year, with the aim of bringing the technology to market in the early 2020s …
Adopting this technology at aging plants would bring emissions in line with those of newer facilities, reducing the need for new investment. If 70 plants switch to a coal-ammonia mix, CO2 emissions would fall by an estimated 40 million tons a year, equivalent to about 3% of Japan’s annual total.
Nikkei Asian Review: Japanese utilities team on CO2-reducing tech for coal plants, 03/02/2017
While this coal-ammonia fuel mix would be more expensive, it would still be highly competitive in the Japanese electricity market:
Refitting older, CO2-spewing coal-fired plants with ammonia-burning technology would likely push up power generation costs by some 30% to roughly 7 yen (6 cents) per kilowatt-hour. This would still be cheaper than nuclear power, which costs about 10 yen per kilowatt-hour, and electricity from natural-gas-fired plants, which costs around 14 yen.
Nikkei Asian Review: Japanese utilities team on CO2-reducing tech for coal plants, 03/02/2017
This price analysis is especially useful from an American perspective. It is easy to dismiss the idea of ammonia as an economically competitive energy source because it is produced from natural gas, which is plentiful and cheap in the US – so why not just use natural gas as the fuel? Ammonia is generally considered a value-added commodity, trading at a premium over its natural gas feedstock. However, in other markets, other pricing dynamics are at play: in Japan, where natural gas must be imported as LNG, the relative value of ammonia as a fuel is far higher.
The second article brings news of IHI Corporation’s work on ammonia-natural gas combustion, about which I wrote previously, specifically regarding their important work reducing NOx emissions from ammonia combustion.
The IHI project builds on many years of research coming out of Tohoku University, and looks set for “trial operations” next year, with a full-scale demonstration in 2020. (It is noteworthy that the author of this article uses the words “hydrogen” and “ammonia” almost interchangeably, illustrating ammonia’s role in the low-carbon economy as a source of hydrogen that, unlike hydrogen itself, can be stored and transported easily.)
Plant engineering companies IHI and Chiyoda are devising cost-efficient ways of utilizing hydrogen as an energy source – a potential breakthrough for broader use of the carbon-free energy.
IHI aims to bring online a hydrogen power plant fueled by ammonia around 2020 …
IHI plans to spend around 1 billion yen ($8.76 million) by the end of this year [2017] to set up a gas turbine, ammonia tank and other equipment at a research and development site in Yokohama. Trial operations will begin in fiscal 2018.
Nikkei Asian Review: IHI, Chiyoda developing low-cost hydrogen tech, 03/02/2017
The ammonia dual-fuel strategy employed by both projects allows the power sector to reduce its emissions without needing to scrap its existing fleet of coal- and natural gas-fired power plants. In this way, ammonia can be seen as the ‘low-hanging fruit’ for decarbonizing the power sector: it is a relatively easy decision to invest in minor capital expenditures and take a small bump in operating costs, but it is a far harder choice to abandon those assets entirely and replace them with carbon-free technologies.
Both projects will demonstrate that the power sector can achieve a significant reduction in emissions in the very near future, with minimal investment. Of course, ammonia has its own carbon footprint. Although sustainable ammonia production technologies are in development all over the world, truly carbon-free ammonia synthesis may yet be years away and will require vast investments to deploy at a meaningful scale.
In the meantime, however, introducing ammonia into the fossil fuel mix creates a powerful market signal for ammonia producers to begin measuring their carbon intensity, which would let the low-carbon ammonia producers sell their product at a premium. And that market premium is precisely the incentive the industry needs in order to make those necessary investments in carbon-free ammonia synthesis technologies. (In that area, also, Japan is forging ahead, with plans for a low-carbon ammonia synthesis pilot plant to be operational in 2018.)
I wrote last week about the potential market for ammonia in energy storage. These Japanese power generation projects represent a separate, additional market opportunity for ammonia producers and technology providers. And that market opportunity is vast.
In rough numbers, Japan expects total power generation to reach 1,065 million MWh in 2030, with 26% of this power supplied by coal. If ammonia were to displace 20% of that coal power, which is the fuel displacement ratio described above, Japan would require annual imports of roughly 20 million metric tons of ammonia.
This is a big number: it represents about 10% of the current global production capacity. Of course, Australia is already making plans to meet this demand.
You can also read the full article at ammoniaindustry.com.