Ammonia vs. Hydrogen: Cost for 2030's Low-Carbon Powerhouse - India Renewable Energy Consulting – Solar, Biomass, Wind, Cleantech
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  • Ammonia vs. Hydrogen: Cost for 2030’s Low-Carbon Powerhouse

    Here’s an article posted in Natural Gas World that explains why Ammonia emerges as cheaper in cost.

    According to the article, 

    • Ammonia is a cheaper low-carbon fuel option for power generation than hydrogen.
    • Transport cost of hydrogen is the primary reason for ammonia being cheaper.
    • Even using the assumptions that result in the highest cost of ammonia and the lowest cost of hydrogen, the resulting power is $10/mn Btu cheaper when ammonia is combusted.
    • Blue rather than green ammonia and hydrogen will dominate the low-carbon fuel mix in 2030.

    Dive into more such study reports and statistics predicting the future cost of Green Ammonia and Green Hydrogen:

    1. Cost Predictions for Green Hydrogen

    Green hydrogen is produced primarily through the electrolysis of water, using electricity generated from renewable sources. Its production cost is largely influenced by the cost of electricity and the efficiency of electrolyzers.

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    • Current Costs: As of now, the cost of producing green hydrogen ranges between $3 to $8 per kilogram, depending on regional energy prices and technology.
    • Future Projections: According to the International Renewable Energy Agency (IRENA), green hydrogen costs could fall to $1.50 per kilogram by 2050 due to technological advancements and scaled-up production.
    • Influencing Factors: Key factors that could reduce costs include improvements in electrolyzer technology, cheaper renewable electricity, and increased system efficiencies.

    2. Cost Predictions for Green Ammonia

    Green ammonia is produced by combining green hydrogen with nitrogen from the air, using the Haber-Bosch process. It is considered a promising vector for hydrogen storage and transport.

    • Current Costs: The current production cost of green ammonia is approximately $600 to $800 per ton.
    • Future Projections: Analysts predict that the cost could decrease to around $250 per ton by 2030 if production of green hydrogen scales effectively.
    • Influencing Factors: Decreases in the cost of green hydrogen production, advances in ammonia synthesis technologies, and the integration of renewable energy sources are pivotal.

    3. Statistical Insights and Examples

    • Production Scale-up: As per IRENA, electrolyzer installations around the world are set to increase from a capacity of 0.3 GW in 2020 to potentially 850 GW by 2050, significantly amplifying green hydrogen output.
    • Policy Influence: Government policies and incentives play a critical role. For instance, the European Union’s Green Deal and Hydrogen Strategy aim to install at least 6 GW of renewable hydrogen electrolyzers in the EU by 2024 and 40 GW by 2030.
    • Case Studies:
      • Australia’s Strategy: Australia is investing heavily in green hydrogen projects as part of its strategy to become a leading exporter. Projects like the Asian Renewable Energy Hub aim to produce 1.75 million tons of green hydrogen annually.
      • Germany’s Funding: Germany has allocated over €8 billion for new hydrogen projects in its national hydrogen strategy, focusing on green hydrogen.

    4. Market Growth and Investment Trends

    • Investment Surge: Global investments in green hydrogen and ammonia production are expected to exceed $70 billion by 2030.
    • Market Growth: The green ammonia market is projected to grow at a CAGR of over 70% from 2020 to 2025, highlighting the rapid pace of development and adoption.

    About Narasimhan Santhanam (Narsi)

    Narsi, a Director at EAI, Co-founded one of India's first climate tech consulting firm in 2008.

    Since then, he has assisted over 250 Indian and International firms, across many climate tech domain Solar, Bio-energy, Green hydrogen, E-Mobility, Green Chemicals.

    Narsi works closely with senior and top management corporates and helps then devise strategy and go-to-market plans to benefit from the fast growing Indian Climate tech market.


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