Potentially Disruptive Green Ammonia Project Officially Starts Production
Wind-turbine maker Envision Group has officially put into operation a project in North China’s Inner Mongolia autonomous region which produces ammonia using electricity generated by its standalone renewables-powered grid.
For Envision, one big benefit of having a standalone grid is long-term cost. The electricity used by the project costs just 0.2 yuan (3 U.S. cents) per kilowatt-hour — nearly 60% lower than the public grid charges for local industrial users.
The project, which spans four phases including a now-completed trial phase, is able to produce 320,000 tons of hydrogen-based ammonia annually, using water and air as raw materials. Once fully operational, the project aims to have 1.52 million tons of annual production capacity.
So-called “green” ammonia and hydrogen — which the project is intended to produce eventually — are seen as key to decarbonizing sectors such as shipping, aviation, heavy-duty trucking and chemical production. The project is focusing on ammonia first because it is easier to transport as ammonia liquefies at higher temperatures than hydrogen — a major consideration for a project based in the landlocked, relatively remote city of Chifeng.
Standalone grid
The project has 1.43 million-kilowatt of wind and solar power capacity and a 680 megawatt-hour energy storage system.
To minimize the effects of unstable wind and solar energy supply, the project employs a weather prediction system which works in tandem with another system capable of flexibly adjusting the power load during production.
Millimeter-wave radar is central to the weather prediction system, said Zhang Jian, the chief engineer of the Envision subsidiary responsible for operating the project. He said the radars can detect wind speeds and cloud movements kilometers away.
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However, during trial operations the project encountered three consecutive days of no wind and little sunshine, a person familiar with the matter previously told Caixin, adding that Envision had to purchase electricity from the public grid to keep running.
Additionally, the project’s electricity supply can fluctuate significantly within a day. This puts strain on key components, a chemical worker at the project told Caixin, which makes it more likely that something will break down, causing both operational issues and potentially even safety risks.
Winning downstream clients
The project has been operating at a loss, at least in its trial phase. In part, that’s because domestic demand for pricier green fuels remains low, while its goal of tapping the lucrative export market has yet to be achieved.
The cost of producing green ammonia is between 2,920 yuan and 4,600 yuan per ton, about 1.2 times to 2.1 times higher than that of making traditional ammonia produced with electricity generated by fossil fuels.
To facilitate eventual exports, the Chifeng government is in talks to build a pipeline to Jinzhou, a coastal city in Northeast China’s Liaoning province, according to Chifeng’s energy bureau chief Wang Weidong.
At the project’s inauguration ceremony held Tuesday, the general manager of Marubeni Corp.’s energy and chemicals division said that the Japanese group will start buying green ammonia in bulk from the Chifeng project from 2026 for export to other countries in the Asia-Pacific region.
One planned destination for these products is Europe, where the price of both green ammonia and hydrogen can reach 1,000 euros ($1,068) per ton. However, getting certified as a green ammonia or hydrogen producer by the EU is no easy feat, an industry source told Caixin previously.
Sun Feifei, vice president of Chinese conglomerate Shandong Xianglong Group, said at the ceremony that its chemical fertilizer manufacturing base in Liaoning province has signed a deal to buy green ammonia from Envision.
Despite the cost disadvantages, Envision is confident that it will be able to sell green ammonia manufacturing equipment and off-grid system technology, especially to projects based in Africa and the Middle East, said Zhang Huayong, head of hydrogen product research and development.
Contact reporter Ding Yi (yiding@caixin.com) and editor Joshua Dummer (joshuadummer@caixin.com)
caixinglobal.com is the English-language online news portal of Chinese financial and business news media group Caixin. Global Neighbours is authorized to reprint this article.
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