'Sad to see' | Co-firing ammonia with coal would gobble up at least four million tonnes of clean hydrogen: BNEF
Total announced Asian co-firing projects could require the equivalent of 40-220GW of electrolyser capacity, data from BNEF indicates
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And yet that is exactly what 15 countries now plan to do, according to new analysis from research house BloombergNEF (BNEF) — which has found that the ammonia co-firing plans of just 12 Asian nations could require enough low-carbon hydrogen production to require the installation of 220GW of electrolysers.
This has the potential to cause periodic spikes in the price of ammonia, widely used as a feedstock for fertiliser production, with knock-on implications for both the energy transition and global food costs.
At 50% co-firing, the figure jumps to 61 million tonnes of ammonia, requiring the equivalent of 5% of the renewable hydrogen project pipeline, and at 100% co-firing, the amount of green ammonia required hits 122.1 million tonnes — requiring a staggering 22 million tonnes of green hydrogen per year.
“This also depends on the timing of when ammonia [demand] for each use case scale,” said the BNEF analyst who authored the report, Isshu Kikuma. “If other demand uses scale by 2030, the supply-demand balance could be tighter.”
In fact, BNEF estimates that a single retrofitted 1GW thermal power plant combusting 100% ammonia would require three million tonnes of clean ammonia per year.
To give a sense of scale, the world’s first mega-project, Air Products’ 2.2GW Neom, currently under construction in Saudi Arabia at a cost of over $8bn, will produce 1.2 million tonnes of green ammonia per year.
In addition, the costs to consumers in countries adopting ammonia co-firing would come to hundreds of millions of dollars in procurement costs and subsidies.
BNEF estimates that it would eventually cost electricity users seven to 14 times that of burning coal, depending on the year, noting that solar and batteries remain by far the cheapest option for power production in South Korea, Japan and Indonesia, as well as other Asian countries.
BNEF argues that ammonia co-firing is still expensive and dirty to use in the power sector — and should be prioritised for use in fertiliser production — as well as an energy security risk that could inflame geopolitical tensions due to the need to import ammonia from locations such as Australia, the US and the Middle East.
“It's…sad to see governments and companies in Japan (my second home) and South Korea rush to commercialise ammonia co-firing technology at home and in the rest of Asia,” said BNEF’s head of hydrogen research, Martin Tengler, in a LinkedIn post. “We now count 12 jurisdictions in Asia eyeing ammonia combustion at thermal power plants.
“A cynic could say North East Asian companies built coal power plants at home and in South East Asia knowing these plants couldn't operate their entire economic lives if we were to comply with the Paris Agreement. Now these same companies are selling an expensive solution to the problem they helped create.”
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