Green Ammonia Plant

According to a report by the Institute for Energy Economics and Financial Analysis (IEEFA), switching to inexperienced ammonia would assist cut back India’s fertilizer subsidy burden whereas additionally rising vitality self-reliance by lowering reliance on imports of pricy liquefied pure fuel (LNG) for fertilizer manufacturing.

For 2022-23, India’s fertilizer subsidy is predicted to be near $1.05 trillion ($14.2 billion), the third yr in a row that it has exceeded $1 trillion. However, excessive and unstable world fuel costs, exacerbated by the Russia-Ukraine conflict, have pushed fertilizer costs to all-time highs, implying that the subsidy must be considerably elevated.

From $10.75/MMBtu (metric million British thermal items) in January 2021 to $33.00 in January 2022, fuel costs practically tripled. Between October 2021 and March 2022, world urea costs reached all-time highs of $690-794/tonne (51.4-60.4/kg). However, the retail value of urea for the Indian agriculture sector remained at a closely backed 5.3/kg ($71/tonne), reflecting a greater than 90 p.c subsidy on the worldwide benchmark value of urea.

“Demand for fertilizer in India is expected to rise, necessitating additional subsidies and LNG imports unless we switch to a cleaner and domestically produced feedstock,” mentioned Kashish Shah, vitality finance analyst at IEEFA, in an announcement.

“Green hydrogen is produced through the electrolysis of water using renewable energy sources, and it can replace grey hydrogen, which is produced as a feedstock for ammonia production from natural gas, or methane.”

According to Shah, demand for hydrogen within the Indian fertilizer trade is predicted to extend from about 3MT (million tonnes) per yr right this moment to 7.5MT by 2050. According to the International Energy Agency’s (IEA) hydrogen venture database, there may be 8MT of inexperienced hydrogen to inexperienced ammonia manufacturing capability deliberate worldwide.

The report examines main inexperienced hydrogen to inexperienced ammonia tasks all over the world and assesses the price competitiveness of manufacturing inexperienced ammonia utilizing numerous electrical energy inputs – grid electrical energy, steady renewable vitality, and solar energy plus batteries.

The value of manufacturing inexperienced hydrogen is at present round $5.5 per kilogramme, or $3 per kilogramme in nations with plentiful photo voltaic assets, and is predicted to fall sharply over the following decade. However, as a way to compete with gray hydrogen at $2 per kg, the prices of two crucial inputs, electrolyzers, and renewable vitality, should be decreased even additional.

“While the cost difference between producing green hydrogen and producing hydrogen from fossil fuels is narrowing, there is still a long way to go,” Shah says. He claims that manufacturing electrolyzers in India, in tandem with the rising photo voltaic PV manufacturing base, would cut back the price of producing inexperienced hydrogen for inexperienced ammonia.

According to the report, the federal government’s new inexperienced hydrogen coverage offers a wide range of incentives to inexperienced hydrogen and inexperienced ammonia producers, together with the allocation of land in renewable vitality parks, the waiver of interstate transmission fees for 25 years, and the banking of renewable energy for as much as 30 days.



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