Norwegian power utility Statkraft has signed a Letter of Intent with chemical company Yara and clean hydrogen company Aker Horizons to establish Europe's first large-scale green ammonia project in Norway, the state utility said Feb. 18.
The partners are to target green hydrogen and green ammonia opportunities in shipping, fertilizer production and industrial applications by electrifying Yara's existing ammonia facility at Herøya in Porsgrunn, Norway.
"Green hydrogen will make Yara's ammonia facility at Heroya emissions-free and cut 800,000 tonnes of CO2," Statkraft said.
Yara is the world's largest supplier of mineral fertilizer. Its ammonia factory at the Heroya industrial park has capacity of 530,000 mt/year.
Provided sufficient power is available at the site and the required co-funding is secured, the project could be realized within five to seven years, Aker Horizon said.
The three companies also plan to explore the potential for green ammonia production in northern Norway as a future opportunity, Statkraft said.
Shipping currently accounts for 2% of global GHG emissions, of which long-distance shipping represents 80%, Aker Horizon said.
Converting all long-distance shipping to ammonia would require approximately 500-600 millions mt/year of ammonia, three to four times current world production levels.
The Norwegian shipping industry has a stated ambition to reduce emissions from domestic shipping by 50% by 2030, requiring significant green hydrogen production.
With its vast hydro asset base, Statkraft is Europe's largest producer of renewable power, which can be used in water electrolysis to produce zero-emission hydrogen.
Hydrogen combined with nitrogen using the Haber-Bosch process forms ammonia, which when burned turns back into nitrogen and water with no CO2 emissions.
Hydro output up 4% on year
Statkraft's 2020 hydro output of 55.7 TWh was up 4.3% year on year as hydro reservoir levels closed the year at 122% of median, the utility said in an annual results presentation Feb. 18.
Levels have since normalized due to heavy rundown in 2021.
The average system spot power price in the Nordic region was Eur10.90/MWh ($13.15/MWh) in 2020, down 72% year-on-year.
Q4 2020 saw a modest recovery to Eur13.70/MWh while prices in 2021 have improved dramatically, Nordpool system prices hitting a five-year high on Feb. 11 at Eur75.18/MWh.
"A significant share of the generation from Nordic hydropower plants is hedged with long-term power purchase agreements (PPAs) with customers," Statkraft said, data showing 20 TWh under PPAs in 2020.
