0

International Fertiliser Society

OPPORTUN I TI ES FOR SM A LL SCA LE

A M M ON I A PROD UCTI ON
by
J P V ri j enhoef
Proton Ventures BV, N etherlands

Proceedi ngs 7xx

Paper presented to the International Fertiliser Society

at a Conference in London, United Kingdom, on 29th June 2017.

w w w .fertiliser-society.org

© 2017 International Fertiliser Society

ISBN 978-0-85310-nnn-n
(I SSN 1466-1314)

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SUM M A RY.
The paper review s the technical and economical parameters for w hich
mini-ammonia production w ill 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 low er operating costs than ammonia produced on
a large scale, if produced based on sustainable, low cost or w aste energy
sources. The avoidance of storage and transport costs can mean that the
overall operating and capital costs w ill be close to, or even below , the sales
prices of large scale produced ammonia once brought to remote locations.
A s 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 w ind or
solar pow er, 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 pow er/ gas or
hydrogen, ammonia can be produced at a very low operating cost, much
low er than traditionally produced ammonia.
M ini 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. M ini 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
w orld. Green ammonia produced from sustainable sources w ill be a
product creating a new market w ith a premium pricing. A dditionally,
storage opportunities for green ammonia are developing fast because
major pow er companies see an upcoming need for such large scale storage.

POWER2A M M ONIA ® and GA S2A M M ONIA ® are registered trademarks of

Proton Ventures BV.

2
 CON TEN TS

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. Pow er2ammonia for energy storage

8.2. Pow er2ammonia for fertilisers

8.3. Using other decentralised energy sources to produce ammonia

9. References

Related Proceedings of the Society

K eywords: ammonia, small scale production, decentralised production.

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1. I N TROD UCTI ON .
Proton Ventures BV is an engineering company w hich 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, w aste 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 low er 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 w ill be close to, or even below , the sales
prices of large scale produced ammonia once transported to such remote
locations. A s a result a credible business case can be developed, depending on
the location and source of the energy or hydrogen.
A lternatively, small scale ammonia units can be used to store sustainable
energy to prevent blackouts of the pow er grid, or to achieve the storage of
seasonal amounts of sustainable energy in order to realise the Paris accord
CO2 targets (Paris, 2016).

2. STRA N D ED EN ERGY 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 w ill be very
hard to compete on a small scale w ith the larger and usually more economical
w orld scale ammonia plants.
A ppropriate energy sources are sustainable sources, such as solar or w ind
energy, biogas, or tidal energy. Other potential sources are hydropow er,
by-product hydrogen, w aste heat from geothermal and/ or flared gases, w hich
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 20-30 M W. Based on 20-30 M W pow er 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, w hich can be used in
various w ays, 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 pow er/ gas or
hydrogen, ammonia can be produced at a very low operating cost, much
low er than traditionally produced ammonia. The capital expenditure per unit
of ammonia, depending on storage and production requirements (green field
or brow n field) w ill generally be higher than traditional larger scale plants.

4
3. OPERA TI N G EXPEN D I TURE.
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 pow er.
This lower cost offsets the relative inefficiency in production at this stage.
M aking 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/ M M Btu 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, pow er, 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 w ith safety, storage and other power users
in utilities (cooling water, air cooler fans and instrument air). A ctual
consumption varies between sites, depending on the availability of utilities
and/ or raw materials.
The costs of these raw materials and utilities w ill 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, w hich is w orth between 50-100 USD/ tonne equivalent costs.
In remote areas the cost to the customer of ammonia produced locally can be as
much as 100-150 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 w ishes, which
makes the overall comparison rather difficult.

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4. CA PI TA L EXPEN D I TURE.
Figure 1 show s the latest investments in ammonia plants in the USA , based on
an average of 3 USD/ M M Btu pipe line gas price. Costs w ill be comparable in
other parts of the w orld.

Fi gure 1: Total installed cost per metric tonneNH 3 produced per year for North
American projects (Brown, 2017).
The low est capital expenditure per tonne investment is at Yara’s plant, based
on a brow n 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. H igher 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 Prot on (20,000 mtpa
[tonnes per annum]) w ill 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.
A ccordingly 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 w hen buying many identical
pieces of equipment, w ith 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
A nother advantage is that the usage of existing hydrogen and nitrogen
production units means that there is no need to use integrat ed front-ends
for small scale ammonia plants. H ydrogen units and nitrogen units are
w idely deployed in the w orld 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. A lso, the
installation is usually on time, as most of equipment par ts have been tested
in the factory, including control (I/ O) system and loop testing. Only a few
field w elds and final connections to the distributed control system (DCS)
or M otor Control Centre M CCs 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 w as 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.

Pl ate 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
w orld. It is only a matter of economics and technical skills to decide w hether
such units are built in the N etherlands (the base of Proton Ventures BV) or to
build these skids in a remote area. H aving multiple factories ar ound the w orld
looks like an obvious solution, how ever quality standards and know how are
required to guarantee the correct functioning of the units.

7
Pl ate 2: Typical 5,000 NM 3/hr hydrogen skid mounted unit (for 20,000 mtpa)
(Vrijenhoef, 2017).

5. SA FETY A N D EN V I RON M EN TA L CON SI D ERA TI ON S.

The supply of decentralised units also requires a new safety philosophy.
Larger units, in combination w ith other dow nstream plants, are usually built
on larger industrial complexes. Such units have all the required inf rastructure
and systems to protect the environment and the surrounding area from safety
incidents.
M ini units have a different safety regime. Firstly, the content of ammonia in
the units, except for the storage tank(s), w ill be w ell below the Post Seveso
(low er-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 w ell 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. A lso, the use of a small safety scrubber and flare for incidents, as in
larger scale ammonia plants, safeguards any emergency situation w hich 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
w ith the safety valves from the hydrogen unit. A n 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 w ell,
if there is a need for aqueous ammonia locally. A mmonium sulphate solution

8
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 low er
risk of stress corrosion cracking. The DM -w ater unit in the steam reformer
section can handle this extra w ater addition w ithout extra capital expenditure
and operating costs are almost negligible.

Fi gure 2: Proton’s Wind to Ammonia system (Vrijenhoef, 2017).

6. OPERA TI ON S.
The mini plants are designed so that the individual components can operate
unmanned, but not un-monitored. H ydrogen plants of this size, as w ell 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. H ow ever a
remotely located panel operator follow s the process and trips it if needed, in a
situation w here the unit is not tripped automatically. The use of a simplified
ammonia loop, w ithout steam generation, also enables a simple operation
w hich can be fully controlled from a remote location. It is best to either have
this full ammonia plant operation integrated in a control room, w here other
activities also take place, or to use a locally based installer.

9
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.
M aintenance is outsourced in these remote areas. When there is a planned or
unplanned shut dow n, the operations manager w ill call the maintenance
company w hich has been contracted to do all the required w orks. These
companies are typically technicians w ho operate or maintain pow er 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. ECON OM I CS.
It might be assumed that an appropriate price to farmers and distributors of
ammonia produced on a small scale w ould be equal to that of traditionally
produced ammonia. H ow ever, 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 w aste gases, the potential to use green and sustainable sources of
energy, and the reduction of CO2 emissions or other w astes 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 POWER2A M M ON IA ® and GA S2A M M ON IA ®. A t the
Stichting A mmonia Event in M ay 2017 several papers w ere presented in the
field of Pow er2ammonia. (1st European Pow er to A mmonia® Conference).
The economics for the development of Pow er2ammonia plants have
significantly different costs, compared to alternative systems. Today the
ability to store sustainable energy is becoming increasingl y important. Figure
3 show s the storage systems available to store this sustainable energy and
especially to overcome excess amounts of sustainable energy produced.
Bubble 1 show s ‘islanded’ stand-alone energy storage and Bubble 5 show s 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 w inter, exceeds the normal and economical
limits for existing storage media, such as flyw heels, batter ies and even

10
 Future economic
competitiveness

Economically viable in the Economically viable at

future but not at present present and in future
Economically viable
in future

Market size Market segments

Energy storage
Small
Fertiliser

Moderate
Combination

Not economically viable ‘Islanded’

Large
Not ‘islanded’

Economically viable at
Current economic
present
competitiveness

Fi gure 3: Relativemarket 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 Pow er2ammonia 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 w ith biogas and/ or tidal energy, the production of ammonia can
be more or less continuous. The use of the battolyser technology (M ulder, 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, w hereas under normal conditions power is
used to make hydrogen by the electrolyser function. Proton Ventures, together
with NUON, TUDelft, A lliander and BA SF, 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, N uon,
A kzo, 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
Fi gure 4: Battolyser fundamentals (M ulder, 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 w ith a small improvement in energy
efficiency of approximately 4 kwh/ N m 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 w hole
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 300-350 USD/ tonne ammonia. A t
a price of 300 USD/ tonne ammonia, including operating and capital costs, the
cost of converted ammonia2pow er will be in the low 100 EUR/ M Wh 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
Fi gure 5: Super battery diagram.

Fi gure 6: Thesuitability of ammonia for largescaleenergy storage(Mulder, 2017).

13
8. CON CLUSI ON .
8.1. Pow er2ammoni a f or energy storage.
Power2ammonia is a new production method for ammonia on a decentralised
scale. A lthough 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%, w hereas 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 w ould be reached if
all car fuel were to be replaced in the future by ammonia as an energy carrier,
based on sustainable sources. A mmonia 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.
8.2. Pow er2ammoni a f or f erti l i sers.
Power2ammonia for fertilisers w ill 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 CO2 credits or tax
advantages in the current competitive markets for ammonia. A lthough price
levels of 300-350 USD/ tonne can be realised, ammonia produced based on
3 USD/ M M Btu natural gas in existing ammonia plants w ill result in lower
ammonia prices, close to the ammonia plant.
8.3. Usi ng other decentral i sed energy sources to produce ammoni a.
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 20-30 M W power, it w ill be possible with the
current mini ammonia concept to realise a cost price of ammonia close to
300-350 USD/ tonne ammonia in a stranded location. Taking the transport
advantage as w ell 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
9. REFEREN CES.
Bañares, R. et al. (2017). A nalysis of Islanded A mmonia-based Energy Storage
Systems, University of Oxford, N H 3 event Rotterdam.
Brown, T. (2017). N H 3 A ssociation, A mmonia costs analysis, N H 3event
Rotterdam.
ISPT consortium, (2017). Pow er to A mmonia, ISPT STUDY REPORT.
M ulder, F. (2017). TU Delft presentation at the N H 3 event Rotterdam.
https://phys.org/news/2016-12-battolyser-technology-combines-electricity-
storage.html
Paris, (2016). UN Framew ork A greement on Climate Change; The Paris
A greement. http://unfccc.int/paris_agreement/items/9485.php
Patil, A . (2015). Paper from Proton Ventures BV, N H 3 conference, Chicago.
Vrijenhoef, J. P. (2017). Paper from Proton Ventures BV, N H 3 event Rotterdam.

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