Techno-economic optimization of flexible distributed green ammonia production

“Green” ammonia produced using hydrogen obtained from renewable-powered electrolysis has lower carbon intensity than ammonia produced from fossil fuels. Implementing green ammonia production at distributed facilities closer to demand locations offers prospective advantages but the tradeoff of losing economies of scale relative to conventional centralized production is not broadly quantified. In this work, we compare the levelized cost of green ammonia from distributed production (≤50,000 mt/y) in Southern California and New York vs. centralized production (≥500,000 mt/y) in West Texas and Iowa followed by transportation to Southern California and New York respectively. We make this comparison for both 2030 and 2050 for a range of scenarios. We use a technoeconomic optimization model which minimizes the levelized cost in each scenario by simultaneously determining the best sizing and hourly operating schedules of chemical process and storage technologies to accommodate renewable energy variability. In 2030, levelized costs from distributed production are 9% to 26% lower than centralized production because transportation costs are avoided and battery and hydrogen storage are mitigated through flexible synthesis. In 2050, the economic benefit of distributed production is lessened due to lower energy prices and projected advances in large-scale ammonia synthesis flexibility. Distributed production provides other advantages including less capital exposure, less renewable generation and electrolysis capacity, avoided transportation risks, and local supply security. Overall, distributed production could provide a promising path forward for green ammonia deployment, especially in the near term to monetize clean hydrogen production tax credits not available beyond 2030.