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2 International Fertiliser Society OPPORTUNITIES FOR SMALL SCALE AMMONIA PRODUCTION by J P Vrijenhoef Proton Ventures BV, Netherlands Proceedings 7xx Paper presented to the International Fertiliser Society at a Conference in London, United Kingdom, on 29 th June International Fertiliser Society ISBN nnn-n (ISSN ) 1

3 SUMMARY. The paper reviews the technical and economical parameters for which mini-ammonia production will become feasible. Producing ammonia at a small scale means that the ammonia produced is usually more expensive in relation to capital expenditure costs, but is more environmentally sustainable, or can have lower operating costs than ammonia produced on a large scale, if produced based on sustainable, low cost or waste energy sources. The avoidance of storage and transport costs can mean that the overall operating and capital costs will be close to, or even below, the sales prices of large scale produced ammonia once brought to remote locations. As a result a credible business case can be developed, depending on the location and source of the energy, natural gas and/or hydrogen. The production of ammonia in decentralised small scale ammonia plants can be realised using various sources of stranded energy, such as wind or solar power, flared gasses and biogas, and should be considered as one of the most sustainable methods for production of ammonia. In such a situation, based on sustainable or low cost stranded power/gas or hydrogen, ammonia can be produced at a very low operating cost, much lower than traditionally produced ammonia. Mini production units have a different safety regime to conventional ones, as they only contain a maximum of 3 tonnes of pure ammonia. A small safety scrubber and flare is included, and a flare for the (scrubbed) purge gas stream from the ammonia synthesis loop removes argon and helium. The mini plants are designed to operate unmanned, but are monitored by a remotely located panel operator. Mini ammonia plants based on sustainable energy and/or by-product hydrogen can be realised today returning a reasonable return on capital invested in specific parts of the world. Green ammonia produced from sustainable sources will be a product creating a new market with a premium pricing. Additionally, storage opportunities for green ammonia are developing fast because major power companies see an upcoming need for such large scale storage. POWER2AMMONIA and GAS2AMMONIA are registered trademarks of Proton Ventures BV. 2

4 CONTENTS Summary 2 1. Introduction 4 2. Stranded energy sources 4 3. Operating expenditure 5 4. Capital expenditure 5. Safety and environmental considerations 6. Operations 7. Economics 8. Conclusion 8.1. Power2ammonia for energy storage 8.2. Power2ammonia for fertilisers 8.3. Using other decentralised energy sources to produce ammonia 9. References Related Proceedings of the Society Keywords: ammonia, small scale production, decentralised production. 3

5 1. INTRODUCTION. Proton Ventures BV is an engineering company which specialises in small scale ammonia production units, among other smaller scale technologies. The idea is that ammonia can be produced in small quantities at decentralised locations based on locally available quantities of energy. This energy can be sustainable energy, waste energy or by-product heat, or hydrogen. Producing ammonia at a small scale means that the ammonia produced is usually more expensive in relation to capital expenditure costs, but is more environmentally sustainable, or has lower operating costs than does ammonia produced on a large scale. The avoidance of storage and transport costs can mean that the overall operating and capital costs will be close to, or even below, the sales prices of large scale produced ammonia once transported to such remote locations. As a result a credible business case can be developed, depending on the location and source of the energy or hydrogen. Alternatively, small scale ammonia units can be used to store sustainable energy to prevent blackouts of the power grid, or to achieve the storage of seasonal amounts of sustainable energy in order to realise the Paris accord CO 2 targets (Paris, 2016). 2. STRANDED ENERGY SOURCES. If ammonia is to be produced from locally available resources, these sources need to be some distance from energy infrastructure and large scale ammonia plants. If these sources are close to a large scale ammonia plant, it will be very hard to compete on a small scale with the larger and usually more economical world scale ammonia plants. Appropriate energy sources are sustainable sources, such as solar or wind energy, biogas, or tidal energy. Other potential sources are hydropower, by-product hydrogen, waste heat from geothermal and/or flared gases, which can be considered as stranded and sustainable. Based on the availability of these resources, it can be concluded that they do not usually exceed more than MW. Based on MW power and/or gas equivalents, it might be expected that up to 20,000 metric tonnes ammonia could be produced per year (mtpa), depending on the infrastructure and/or continuous availability. The ammonia units of Proton Ventures BV have been developed to convert these small energy sources into stranded ammonia, which can be used in various ways, such as a fertiliser or base chemical close to the location of the sustainable energy source. In such a situation, based on sustainable or low cost stranded power/gas or hydrogen, ammonia can be produced at a very low operating cost, much lower than traditionally produced ammonia. The capital expenditure per unit of ammonia, depending on storage and production requirements (green field or brown field) will generally be higher than traditional larger scale plants. 4

6 3. OPERATING EXPENDITURE. Small scale ammonia units may require a higher specific energy consumption than large scale units, due to the effects of economics of scale, as well the less integrated design (less scope for co-generation and/or heat integration). The small scale units do not require as much energy integration, while such integration does not pay off for smaller units. In addition, smaller units have higher heat losses and relatively higher fugitive emissions. Of course, one might design a small unit to be like a large scale unit, to save this energy. However, the use of stranded, waste or sustainable energy is usually based on lower priced energy sources, compared to pipe line gas or grid power. This lower cost offsets the relative inefficiency in production at this stage. Making use of new integration possibilities for hydrogen and nitrogen in the future may enable these inefficiencies to be reduced over time, for example by applying auto thermal hydrogen reactors on a mini scale. For the moment, the easily obtainable potential for mini ammonia plants is based on gas prices of close to 1-2 USD/MMBtu and or power sources for sustainable energy, averaging 2-3 $ct/kwh. Such sources do exist, for both short and longer periods of time. Flared gases, in particular, may be an energy source of long duration and low cost. In such cases ammonia operating costs can be as low as close to 50 USD/tonne, including all variable costs, i.e. water, power, gas. Typical consumption figures for methane/natural gas equivalent are some 800 Nm 3 /tonne ammonia and 900 kwh/tonne ammonia, including nitrogen, hydrogen and ammonia units, along with safety, storage and other power users in utilities (cooling water, air cooler fans and instrument air). Actual consumption varies between sites, depending on the availability of utilities and/or raw materials. The costs of these raw materials and utilities will be, on average, as low or lower than those for large scale units, due to the low(er) prices of such excess or wasted sources. This takes into account that small scale units are supplied from decentralised, adjacent sources, considerably reducing ammonia transport and storage costs, which is worth between USD/tonne equivalent costs. In remote areas the cost to the customer of ammonia produced locally can be as much as USD/tonne lower than that of ammonia supplied from large scale plants. The capital expenditure (even if it is little higher or close to large scale units) can be compensated by the lower out-of-pocket costs for ammonia produced on a local, decentralised basis. In such cases, operating costs plus capital expenditure could be even cheaper than the supply of ammonia from a large plant over a long distance. It should be noted that storage costs are not included in this pricing, since the needs and circumstances of all industrial users and fertilisers users vary considerably. Such storage costs should be added to the out-of-pocket-costs, but depend very much on the user s wishes, which makes the overall comparison rather difficult. 5

7 4. CAPITAL EXPENDITURE. Figure 1 shows the latest investments in ammonia plants in the USA, based on an average of 3 USD/MMBtu pipe line gas price. Costs will be comparable in other parts of the world. Figure 1: Total installed cost per metric tonne NH 3 produced per year for North American projects (Brown, 2017). The lowest capital expenditure per tonne investment is at Yara s plant, based on a brown field investment and also based on a non- conventional ammonia plant (based on by-product hydrogen). Other plants are more in the range of 1,000-1,500 USD/tonne annual capacity installed. Higher installation and time over-run costs mean that costs over 2,000 USD/tonne annual capacity installed are not abnormal. The installed cost for a small scale ammonia plant by Proton (20,000 mtpa [tonnes per annum]) will be around 1,250 USD/tonne annual output. This is similar to that for larger scale plants. For the smaller plants of 4,000 tpa the capital expenditure costs can be as high as 3,000 USD/tonne installed. This means that the capital expenditure cost for such units is rather high, but perhaps not as high as might be expected. The fact that the units are modular enables the installer of the units to use mass production techniques. Accordingly engineering costs can be reduced, as can the costs for equipment, due to the ability to repeat tasks multiple times. Considerable cost savings have been achieved in practice when buying many identical pieces of equipment, with up to 60% discounts for certain heat exchangers. In addition, large reactor and high pressure vessel design costs can be significantly reduced by spreading them across multiple units. 6

8 Another advantage is that the usage of existing hydrogen and nitrogen production units means that there is no need to use integrated front-ends for small scale ammonia plants. Hydrogen units and nitrogen units are widely deployed in the world at a smaller scale, and so the cost of such standard units is low. The fact that such units can be supplied more or less off-the-shelf, reduces the need for construction resources. These hydrogen and nitrogen plants are built in a factory and transported to site in modules, enabling a fast installation at a low installation cost. Also, the installation is usually on time, as most of equipment parts have been tested in the factory, including control (I/O) system and loop testing. Only a few field welds and final connections to the distributed control system (DCS) or Motor Control Centre MCCs is required locally, but usually these jobs are less critical to the project timing than are the in-field commissioning and testing procedures. The ability to exploit these modular hydrogen and nitrogen units was the reason behind the development of the skid mounted ammonia loop. Ensuring that the ammonia synthesis loop is simple, avoiding steam production, makes it easy to design and build the loop in three skids: the compressor skid; the reactor; the rest of the loop equipment. With a maximum height of 12 metres all the mini loops fit into a containerised module, making it easy to transport them to a distant destination, Plate 1. Plate 1: Proton Ventures NH 3 unit skid - NFUEL20 (20,000 mtpa). Organising all the main parts of the ammonia production into skids makes it simple to send an ammonia plant from the factory to any destination in the world. It is only a matter of economics and technical skills to decide whether such units are built in the Netherlands (the base of Proton Ventures BV) or to build these skids in a remote area. Having multiple factories around the world looks like an obvious solution, however quality standards and knowhow are required to guarantee the correct functioning of the units. 7

9 Plate 2: Typical 5,000 NM 3 /hr hydrogen skid mounted unit (for 20,000 mtpa) (Vrijenhoef, 2017). 5. SAFETY AND ENVIRONMENTAL CONSIDERATIONS. The supply of decentralised units also requires a new safety philosophy. Larger units, in combination with other downstream plants, are usually built on larger industrial complexes. Such units have all the required infrastructure and systems to protect the environment and the surrounding area from safety incidents. Mini units have a different safety regime. Firstly, the content of ammonia in the units, except for the storage tank(s), will be well below the Post Seveso (lower-tier) amount of 50 tonnes of ammonia. Even the largest small-sized ammonia plant contains a maximum of 3-5 tonnes of pure ammonia. Even if the containment fails, the maximum exposure for the environment is some 5 tonnes of ammonia over a period of 1-2 hours. Using dispersion models for the loss of containment of ammonia, as well as standard safety models for calculating the external safety risks, it can easily be calculated that the radius of the danger zone/risk contour (frequency rate< 10-6 ) is not more than 50 metres. Also, the use of a small safety scrubber and flare for incidents, as in larger scale ammonia plants, safeguards any emergency situation which may occur in ammonia and/or hydrogen plants. A flare for the (scrubbed) purge gas stream from the ammonia synthesis loop to remove argon and helium is added to the overall system, and combined with the safety valves from the hydrogen unit. An emergency scrubber and this flare are included in the capital expenditure, and included in the skids as a standard emission prevention control. The emergency scrubber is a standard sulphuric acid scrubber, but production of aqua ammonia is possible as well, if there is a need for aqueous ammonia locally. Ammonium sulphate solution 8

10 can be sold to farmers in the area, although there is only a very small volume: one tank truck a year from the largest sized units, based on a maximum of one safety incident per year. Furthermore, the storage of ammonia is set at 3-5 days maximum, and based on pressurised storage. Water addition is standardised to 0.2% to have a lower risk of stress corrosion cracking. The DM-water unit in the steam reformer section can handle this extra water addition without extra capital expenditure and operating costs are almost negligible. Figure 2: Proton s Wind to Ammonia system (Vrijenhoef, 2017). 6. OPERATIONS. The mini plants are designed so that the individual components can operate unmanned, but not un-monitored. Hydrogen plants of this size, as well as nitrogen units, run unmanned at steel mills, small chemical plants or refineries. Usually these plants are not even on the site of such major production unit, but just outside the fence of the main units. Telemetry and DCS systems at a distance allow for unmanned operation. However a remotely located panel operator follows the process and trips it if needed, in a situation where the unit is not tripped automatically. The use of a simplified ammonia loop, without steam generation, also enables a simple operation which can be fully controlled from a remote location. It is best to either have this full ammonia plant operation integrated in a control room, where other activities also take place, or to use a locally based installer. 9

11 Operational running costs of the units are therefore limited and these costs reflect the required operational support, including production planning and maintenance activities. Due to the simplicity of the system, the operator is a maintenance planner, production manager and secretary in one. Maintenance is outsourced in these remote areas. When there is a planned or unplanned shut down, the operations manager will call the maintenance company which has been contracted to do all the required works. These companies are typically technicians who operate or maintain power plants and similar, and have been trained to maintain the units. The usual industrial gas supply companies have access to such technicians, both in industrially developed areas and in more remote ones. This has to be set up by the local management of the mini plants. 7. ECONOMICS. It might be assumed that an appropriate price to farmers and distributors of ammonia produced on a small scale would be equal to that of traditionally produced ammonia. However, ammonia produced in this small scale manner offers considerable advantages over ammonia delivered by truck, rail or ship. What also needs to be taken into account are the shorter distribution channels, the re-use of waste gases, the potential to use green and sustainable sources of energy, and the reduction of CO 2 emissions or other wastes in the area. Small scale production also generates more jobs locally and makes certain users of ammonia like farmers or chemical companies less dependent on sometimes more expensive ammonia, due to fluctuations in supply and demand. Whether one should charge for this or not depends on the value to the farmer of the locally produced ammonia. If biogas is being used for the production of this ammonia, green credits may be monetised, and the image of companies may be improved, creating added benefits. Based on the costs presented for making fertiliser or technical grade ammonia, this paper focuses on POWER2AMMONIA and GAS2AMMONIA. At the Stichting Ammonia Event in May 2017 several papers were presented in the field of Power2ammonia. (1 st European Power to Ammonia Conference). The economics for the development of Power2ammonia plants have significantly different costs, compared to alternative systems. Today the ability to store sustainable energy is becoming increasingly important. Figure 3 shows the storage systems available to store this sustainable energy and especially to overcome excess amounts of sustainable energy produced. Bubble 1 shows islanded stand-alone energy storage and Bubble 5 shows the combination of energy storage and fertiliser production. For such units, to overcome seasonal variation the amount of energy that has to be stored in summer, for use in winter, exceeds the normal and economical limits for existing storage media, such as flywheels, batteries and even 10

12 Future economic competitiveness Economically viable in the future but not at present Economically viable at present and in future Economically viable in future Market size Small Moderate Market segments Energy storage Fertiliser Combination Not economically viable Large Islanded Not islanded Economically viable at present Current economic competitiveness Figure 3: Relative market potential of market segments (Bañares et al., 2017). hydro- pumped water reservoirs. In such situations systems such power2gas or Power2ammonia can help. Complete cycles of over 50% efficiency can be reached using ammonia, especially using the mini ammonia plant as designed by Proton/Casale. With a 50% efficiency in the overall cycle from Power2ammonia and from ammonia2power, the storage costs for sustainable energy is in the range of 300 USD/tonne produced on site. Using sustainable sources such as geothermal or combined wind and solar, in combination with biogas and/or tidal energy, the production of ammonia can be more or less continuous. The use of the battolyser technology (Mulder, 2017), reduces any periods of low or no power and enables the ammonia plant to run steadily, Figure 4. During outages of power supply, the battolyser will still produce hydrogen and power from its battery function, whereas under normal conditions power is used to make hydrogen by the electrolyser function. Proton Ventures, together with NUON, TUDelft, Alliander and BASF, have formed a consortium to further improve the efficiency of the battolyser. But even at current levels the cost of a battolyser producing hydrogen and using excess power results in reasonable costs for making hydrogen under constant conditions. In a study by ISPT (ISPT, 2017)) and its partners (Proton Ventures, Nuon, Akzo, OCI, CE Delft, TU Delft, TU Twente, ECN) current costs for making Power2ammonia based on existing technologies have been calculated. The use of battolysers was not taken into account, neither were the expected and already existing improved capital costs of the electrolysers. 11

13 Figure 4: Battolyser fundamentals (Mulder, 2017). In this study ammonia production from power is not considered to be currently viable for making fertilisers. However, making use of battolyser technology and lower electrolysers capital cost, along with a small improvement in energy efficiency of approximately 4 kwh/nm 3 hydrogen produced, ammonia prices start to drop to levels of 350 USD/tonne, based on a commercial tariff for power supply from the grid to large industrial users of power. In such a scenario ammonia could be used commercially in the studied project proposal for energy storage at the power plant of NUON in Eemshaven in Groningen, The Netherlands, Figure 5. The benefit is that ammonia can be easily stored and that its characteristics make its use in large scale storage applications very economic, once the whole chain is optimised in more detail, Figure 6. Price levels of below 300 USD per tonne of ammonia produced should be the target in future, although it is not feasible today. New electrolyser developments are underway, though not proven as yet. Based on the studies above, one could conclude that the use of Power2ammonia in a small scale ammonia plant means that it is feasible to store excess sustainable power to levels of approximately USD/tonne ammonia. At a price of 300 USD/tonne ammonia, including operating and capital costs, the cost of converted ammonia2power will be in the low 100 EUR/MWh power supplied to the grid in off-peak periods. This will generally optimise local grids, saving huge amounts of capital expenditure costs for power distribution companies e.g. infrastructure costs of power cables and transformers etc). 12

14 Figure 5: Super battery diagram. Figure 6: The suitability of ammonia for large scale energy storage (Mulder, 2017). 13

15 8. CONCLUSION Power2ammonia for energy storage. Power2ammonia is a new production method for ammonia on a decentralised scale. Although new technologies are under investigation, none of these new technologies, except Haber-Bosch mini ammonia, appear to be capable of supplying ammonia from power in the short term. The proven Haber-Bosch synthesis loop will enable power production companies in combination with, for instance, batteries and/or battolysers, to achieve a cost of ammonia of approximately 300 USD/tonne ammonia produced, based on excess sustainable power. So mini ammonia plants can be considered to be a potential new source for energy storage systems, giving the Haber-Bosch reaction a new application. The net complete cycle efficiency could currently be as high as 41%, whereas in the future, levels of 50% should be realistic. Economically, such Power2ammonia units could produce in total up to 700-1,000 million metric tonnes of ammonia per annum in decentralised small scale plants, typically 20,000 tpa per unit. Such a number would be reached if all car fuel were to be replaced in the future by ammonia as an energy carrier, based on sustainable sources. Ammonia in cars is not really considered today, although it is possible, but conversion of ammonia at a fuel station back to power could be a reasonable and fully feasible solution Power2ammonia for fertilisers. Power2ammonia for fertilisers will depend on the extra costs of producing ammonia, compared to the standard natural gas to ammonia plants, and especially the large scale units. In general, Power2ammonia is not economical now, or in the short term, unless users can benefit from CO 2 credits or tax advantages in the current competitive markets for ammonia. Although price levels of USD/tonne can be realised, ammonia produced based on 3 USD/MMBtu natural gas in existing ammonia plants will result in lower ammonia prices, close to the ammonia plant Using other decentralised energy sources to produce ammonia. There are also potential opportunities in the use of decentralised sources of energy, such as gas, waste gas, flare gas and waste hydrogen to produce ammonia. Using the waste or low priced biogas, flared gas or waste gas stream / energy streams in volumes of say 2,000 NM 3 /hr gas equivalent (for NFUEL20 i.e. 20,000 mtpa) or MW power, it will be possible with the current mini ammonia concept to realise a cost price of ammonia close to USD/tonne ammonia in a stranded location. Taking the transport advantage as well as other advantages such independence from long distance supplies and other advantages realised locally, the mini ammonia plants can be competitive, having offtake of ammonia at or nearby the decentralised units. 14

16 9. REFERENCES. Bañares, R. et al. (2017). Analysis of Islanded Ammonia-based Energy Storage Systems, University of Oxford, NH 3 event Rotterdam. Brown, T. (2017). NH 3 Association, Ammonia costs analysis, NH 3event Rotterdam. ISPT consortium, (2017). Power to Ammonia, ISPT STUDY REPORT. Mulder, F. (2017). TU Delft presentation at the NH 3 event Rotterdam. Paris, (2016). UN Framework Agreement on Climate Change; The Paris Agreement. Patil, A. (2015). Paper from Proton Ventures BV, NH 3 conference, Chicago. Vrijenhoef, J. P. (2017). Paper from Proton Ventures BV, NH 3 event Rotterdam. RELATED PROCEEDINGS OF THE SOCIETY. 89, (1965), Manufacture of Ammonia, P W Reynolds. 184, (1979), Coal Gasification - Routes to Ammonia and Methanol, F C Brown, H G Hargreaves. 191, (1980), New Concept Ammonia Process with Higher Efficiency, W F van Weenen, J Tielrooy. 260, (1987), Twenty Five Years in 'Small' Ammonia Plant Technology, A Pinto, S G Trotter. 319, (1992), Development & Operation of the Leading Concept Ammonia (LCA) Technology, K J Elkins, A J Gow, D Kitchen, A Pinto. 401, (1997), Ammonia: Safety, Health and Environmental Aspects, K D Shah. 434, (1999), Environment and Energy - A Business Opportunity for Fertiliser Producers?, J J B Ward, M S Morrell. 601, (2007), Ammonia Production: Energy Efficiency, CO 2 Balances and Environmental Impact, J D Pach. 602, (2007), Ammonia Plant Energy-saving Project: Design and Implementation, W T Nobel, R B J Waggeveld, M J Walton, P A Sharp. 647, (2009), Developments in Ammonia Plant Contracting, P Kummann. 671, (2010), By-Product Formation in Ammonia Plants, J D Pach. 743, (2014), Environmental Constraints on New Plant Construction in the USA, K Ruthardt. 15

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