The economic viability of green Ammonia production
Ammonia is a major source of natural gas consumption in its production as a chemical. About 75% of ammonia is used in fertilizer industries while the balance of 25% is used in other chemical industries. Globally ammonia accounts for about 1% of the GHG emissions and is one of the significant sources of CO2 emissions.
While globally we are focusing on green hydrogen production there are issues in handling the large volumes of hydrogen in terms of safety as well as transport. Hydrogen is a major ingredient in the production of ammonia if you produce hydrogen through the solar through the electrolysis process this hydrogen can be used in the production of ammonia which can be available in the liquid form and easy to transport and safe to handle.
As per the recent IHS Markit report, the typical cost of green ammonia production is about $500 per metric ton compared to the average cost of Green ammonia production, which ranges from about $200-$300 per metric ton. This is considering the power cost at about 4 Cents/kWh, by 2030, we are expecting that green power through solar and wind power will be available at t2 Cents/kWh and the green ammonia production cost can be brought down to about $300 per metric ton. Considering this as a new technology the carbon credit benefits will also be available which will lead to the green ammonia availability at $200 per metric ton which is going to be lower than the typical green ammonia production.
Indian companies such as Avaada have already announced large investments of Rs.40,000 crore in the production of green ammonia. One of the facilities will be recently coming up in Kota Rajasthan.
Apart from its uses in agriculture as a fertilizer and in industry, green ammonia is expected to use as a green fuel for combustion engines as well as for power generation. Especially in marine vehicles and long-haul vehicles where batteries cannot be used due to low energy density green ammonia can be a game-changing fuel considering a very high energy density.