Optimal decarbonization of ammonia production in the Netherlands: MILP-based Modeling and Analysis of a Multi-Energy System

Abstract

This study investigates the decarbonization of ammonia production in the Netherlands, which currently accounts for roughly a quarter of the country’s chemical sector emissions. The primary objective is to determine the most cost-effective production route for decar- bonizing the Dutch ammonia industry while taking into account site limitations. The study begins with a comprehensive literature review, providing an overview of vari- ous production technologies for ammonia. Among the alternatives considered, conventional steam methane reforming (SMR) with carbon capture and storage (CCUS), electrified SMR (eSMR) with CCUS and proton exchange membrane (PEM) electrolyzers emerge as the most promising low-carbon routes for ammonia production. To evaluate the viability of these processes, the study collects and standardizes techno- economic data, including information on auxiliary systems. A multi-energy systems (MES) approach combined with mixed-integer linear programming (MILP) optimization is em- ployed to analyze ammonia production at two specific sites: Sluiskil and Chemelot. The research explores four distinct cases to assess the feasibility, capacity, and associated costs of the alternative routes for decarbonizing ammonia production. The first two cases assume unlimited availability of current grid electricity and an imaginary future low-carbon grid electricity, respectively. The third case incorporates the impact of renewable energy re- sources (RES), such as offshore wind (OSW) and solar photovoltaic (PV), while considering limitations in grid electricity imports. The fourth case further incorporates the expansion of electricity networks to examine how the geographical location of ammonia production sites affects decarbonization efforts. The findings indicate that SMR-based ammonia with CCUS can potentially eliminate up to 84% of current emissions. However, achieving further reductions relies on reducing the carbon intensity of the Dutch electricity grid. Further decarbonization of ammonia production becomes feasible through eSMR-based and PEM-based production, but it requires substantial amounts of OSW, PV, hydrogen storage (HOS), and electric battery storage (BAT). Moreover, the study highlights the influence of electricity networks on ammonia production and reveals that the Sluiskil site holds a substantial comparative advantage over the Chemelot site in terms of costs. The average cost of ammonia in the Netherlands for an 84% reduction in emissions is estimated at 300 C/tonNH3 , with an average abatement cost of 32.4 C/tonCO2 . For complete emission reductions, the cost rises to 1671 C/tonNH3 and 858 C/tonCO2 . Notably, the data underscore the challenges associated with decarbonizing the final 1% of emissions due to the limited availability of renewable energy resources during specific periods of the year. An 88% increase in ammonia price and a corresponding 123% increase in abatement costs would be necessary. The study acknowledges several limitations that future research should address. These include the exclusion of dynamics related to ammonia storage, insufficient consideration of flexibility parameters for certain technologies, reliance on eSMR with a low technological readiness level (TRL), absence of a conventional plant with a high carbon capture rate, assumption of unlimited available area for technology deployment, disregard for excess electricity and heat sales and assumption of constant gas prices, among others. In conclusion, this study provides valuable insights into the decarbonization of ammonia production in the Netherlands. It emphasizes the need for policy interventions such as the development of CO2 transport and offshore storage, funding for eSMR research and support for renewable electricity to facilitate a sustainable and low-carbon ammonia industry.