Ammonia use in thermal power plants could be worth $100bn in 2050, Wood Mackenzie says
Ammonia co-firing in thermal power plants could be worth $100 billion by 2050 as green transition efforts by governments increase demand for the compound, energy consultancy Wood Mackenzie says.
Ammonia, a compound of hydrogen and nitrogen, does not emit carbon dioxide when burnt and is “an increasingly attractive proposition,” in the thermal power generation sector to cut emissions, the consultancy said.
“The possibility to burn low-carbon hydrogen and ammonia in thermal power plants provides countries with an additional tool for decarbonising the power generation sector,” Prakash Sharma, vice president of multi-commodity research at Wood Mackenzie, said at the Australian Petroleum Production and Exploration Association conference in Brisbane yesterday.
“Just a 10 per cent use of ammonia co-firing in coal plants could result in a 50 per cent growth from today to 200 million tonnes of ammonia demand by 2050, and this is a $100bn market opportunity.
“Additionally, co-firing will deliver a 10 per cent reduction in carbon emissions.”
One of the lightest and most abundant elements, hydrogen is being prioritised as a viable alternative fuel.
Ammonia allows for the easy transport of hydrogen, the blue form of which is derived from gas and the green version from splitting water into hydrogen and oxygen using renewable sources.
Thermal generation is the largest source of power and heat in the world.
In 2021, the share of thermal generation was 70 per cent in Asia Pacific, and 50 per cent in Europe and Americas combined, according to Wood Mackenzie.
Globally, the size of the hydrogen industry is expected to hit $183bn by 2023, up from $129bn in 2017, according to Fitch Solutions.
French investment bank Natixis estimates investment in hydrogen will exceed $300bn by 2030.
A number of countries set net-zero targets in the coming years that could push demand for ammonia and hydrogen higher, Wood Mackenzie said.
The US, the world’s largest economy, aims to become carbon neutral by 2050, while China, the second-largest, plans to reach the net-zero target by 2060.
The UAE, Opec’s third-largest oil producer, aims to become carbon neutral by 2050, with clean and renewable energy investments worth Dh600bn ($163.5bn) planned over the next three decades.
Japan’s utilities are taking a lead in co-firing ammonia in both coal- and gas-fired plants.
South Korea recently expanded plans to co-fire hydrogen and ammonia in thermal power plants.