Renewable Fuels: Manufacturing Ammonia from Hydropower

Although the biggest market for anhydrous ammonia is the production of nitrogen-based fertilizer, there is growing interest in the use of anhydrous ammonia as a clean alternative to petroleum-based fuels. Technology advancements in the ammonia manufacturing process make the option of using hydroelectric power to produce this carbon-free fuel more viable and cost-effective than in the past.

Anhydrous ammonia (NH3) is an important and valuable chemical that is produced on massive scales throughout the world. Annual worldwide production capacity is about 180 million metric tons, making it one of the top- ranking chemicals manufactured in terms of volume. Ammonia can be produced in an environmentally friendly and reasonably efficient process, using simply water, air, and electricity. But only a tiny number of ammonia manufacturers are producing ammonia in that manner. Currently, most ammonia is produced using fossil fuels such as coal or natural gas to supply the hydrogen for the NH3 molecule. This process produces tremendous amounts of greenhouse gases.

It is possible for ammonia manufacture to be accomplished, technically and economically, using hydroelectric power, particularly given recent technology advancements. In the 20th century, millions of metric tons of ammonia were produced using hydropower, but this approach was largely curtailed in the 1980s in favor of making ammonia with low-cost natural gas and coal.

Understanding the process for producing ammonia

German Fritz Haber won the 1918 Nobel Prize for Chemistry by inventing a process to turn hydrogen and nitrogen gases into ammonia. In the 1920s, Carl Bosh performed additional research to improve the catalyst for this process, which provided higher energy conversion efficiency. As a result of their combined research, this essential ammonia synthesis process is now known as the Haber-Bosch (H-B) process. The process combines hydrogen and nitrogen over iron-based catalysts at about 500 degrees Celsius (C) and 200 to 300 atmospheres pressure to produce ammonia, as shown in:

Equation 1

3H2 + N2 —> 2NH3

The nitrogen feed for the H-B process is obtained by separating nitrogen from air. The hydrogen for this process can come from reforming fossil fuels or by cracking water into hydrogen and oxygen using electrolysis. Today, virtually all the ammonia produced in the world is carried out by reforming natural gas and gasifying coal and a few other fossil sources to produce the hydrogen.

Learning about ammonia

Ammonia has a number of unique physical and chemical characteristics that make it an important chemical and a promising fuel. Perhaps most important to society is the ability of naturally occurring bacteria in the soil to convert anhydrous ammonia and water into nitrates through a process called nitrification. The nitrates can then be absorbed readily by plants and aid in their growth.

Other key attributes of NH3 are:

— Can be stored compactly as a liquid (much like propane) at pressures around 125 pounds per square inch (psi);

— Highest hydrogen density of any liquid (50 percent more hydrogen per volume than even cryogenic liquid hydrogen);

— Carbon-free, thus combustion does not produce greenhouse gases;

— High latent heat of vaporization, resulting in excellent properties as a refrigerant;

— Flammable over a narrow range and with an extremely high ignition energy (rated as an inflammable liquid by the U.S. Department of Transportation); and

— Much lighter than air.

Accordingly, ammonia has a variety of important uses, including as a fertilizer, a refrigerant, an agent for neutralizing nitrogen oxide (NOx) in flue gas and stack gas, and likely a clean-burning alternative fuel in the future.

Ammonia is an essential fertilizer for crops, particularly corn and wheat. Before Haber’s invention in 1918 — which allowed “fixing” nitrogen from the air into a chemical that could be spread on fields — there was concern that agriculture would not be able to sustain a growing population and that widespread famine could result. Prior to the Haber invention, the primary source of nitrogen for crops was the naturally occurring mineral sodium nitrate (NaNO3), which had finite reserves and had been mined for decades, depleting the supply.

Today, ammonia is manufactured in vast quantities worldwide, with China and India leading in production. The U.S. has cut back on its ammonia production over the past decade due to high natural gas costs and now imports more than half of the 15 to 20 million metric tons of ammonia it consumes annually.

Ammonia is widely used as the working fluid in industrial refrigeration applications. About half a million metric tons of ammonia are used annually worldwide for this purpose.1

Ammonia is the active ingredient in neutralizing NOx in flue gas and stack gas. It is also used in de-NOx of diesel truck exhaust. The NH3 molecule reacts with the NOx to form nitrogen and water vapor. Often, the ammonia is “carried” on board in the form of urea or aqueous ammonia (ammonia dissolved in water). This de-NOx application is small in volume compared to fertilizer consumption.

A few years after Haber’s invention, researchers in Norway and Italy demonstrated that ammonia would work well to power internal combustion engines. This was later demonstrated on a large scale during World War II, when Belgium operated its bus system on ammonia after the Germans seized its diesel fuel for the war effort.2 Today, with energy shortages and fluctuating fuel prices, ammonia is undergoing a renewal in interest as a viable, clean alternative to oil-based fuels.3

Ammonia fuel has unique characteristics, including its ease of storage and the fact that it is carbon-free (i.e., it does not emit any greenhouse gases on combustion). It also does not require any biomass in its production. Certainly, if ammonia receives support and acceptance as a clean alternative fuel, for both stationary and vehicular applications, this market could easily exceed the fertilizer market over time.

Ammonia production basics

By far, the world’s production of ammonia is dominated by plants where the hydrogen for the NH3 molecule is supplied by reforming natural gas and gasifying coal. About 70 percent of the world’s 130 million annual metric tons of ammonia is made with natural gas; the bulk of the remainder is made with coal. At current prices, ammonia production, transport, and consumption represent roughly a $100 billion annual worldwide business. About 33 million British thermal units (Btus) of natural gas are required to make a metric ton of ammonia. An average-scale ammonia plant produces 500 to 1,000 metric tons of ammonia per day. That results in the use of a tremendous amount of natural gas. For example, the amount of natural gas needed for one day’s production of ammonia at that average-scale plant would heat 850 to 1,700 homes during a typical northeastern U.S. winter for one month.

A significant concern about the production of ammonia using natural gas and coal is emissions of the greenhouse gas carbon dioxide (CO2). With natural gas, about 1.8 metric tons of CO2 are vented to the atmosphere for every metric ton of ammonia manufactured. With coal, with an approximate chemical formula of CH, the situation is clearly much worse. Virtually no ammonia plant operating in the world is equipped with carbon sequestration capabilities. Efforts to add those capabilities result in plants not being viewed as economically competitive, according to Keith Stokes, an ammonia consultant with Stokes Engineering. (An exception is Dakota Gasification, which produces a variety of chemicals using coal gasification technology and sells captured CO2 to the Canadian oil industry to enhance yield.4) Ultimately, though, manufacture of ammonia using fossil fuels is one of the world’s largest single contributors to greenhouse gas emissions.

Alternative production approach

Hydrogen for ammonia can be supplied in an alternative way, by splitting water into hydrogen and oxygen. This is generally done through a process called electrolysis, where application of a few volts of direct current causes evolution of hydrogen at one electrode in a cell and oxygen at the other electrode. The oxygen produced can be used for other chemical processes or sold as a relatively valuable byproduct. In this approach to ammonia production, no CO2 is produced, provided the electricity to power the electrolysis, and later the H-B synthesis, is derived from a non-polluting source of electricity (such as hydropower). It takes 420 gallons of water to make a metric ton of anhydrous ammonia. That may seem like a lot, but even ammonia production using natural gas uses half of that, 210 gallons, in the steam-reforming process.

Large electrolyzers are used to crack water to provide hydrogen for manufacturing ammonia. Advances in electrolyzer technology have decreased the cost of producing ammonia.

At this point, some readers will ask: “Why is ammonia synthesis using hydrogen from water splitting not the dominant approach for ammonia production?” The answer is simple — cost. Using the standard electrolytic ammonia approach consisting of electrolyzers, air separation equipment, and Haber-Bosch synthesis (the EHB approach), energy consumption to produce a metric ton of ammonia has historically been about 12 megawatt-hours. Thus, the “fuel cost” alone of making that metric ton of ammonia would be $600 at 5 cents per kilowatt-hour. Add in capital and operating expenses, and that metric ton of ammonia costs about $800 to make. Compare that to ammonia produced from natural gas. For much of the past 100 years, the cost of a million Btu of natural gas, even in the U.S., has not been much higher than US$1. Based on the number given earlier of 33 million Btu for a metric ton of NH3, the fuel cost for a metric ton of ammonia from natural gas that costs $1 per million Btu has been $30 to $40, compared to $600 for EHB ammonia. There was no way for electrolytic ammonia to compete economically.

Times have changed, however. Market-available merchant ammonia — that is, ammonia made from natural gas or coal — recently has been selling for $1,000 in many parts of the U.S., even more in some geographical locations distant from the Midwest pipeline and terminal delivery infrastructure. Figure 1 displays wholesale prices for a metric ton of ammonia for the west coast of the U.S. At its peak in late 2008, the price of ammonia had nearly tripled over recent years, driven largely by demand outstripping supply.

International ammonia producers are well-aware of the rising demand for ammonia. It is projected that, with new NH3 plant construction and upgrades, the worldwide capacity will increase by 6 to 8 million metric tons per year for the near future.5 This will be focused primarily in low-priced coal or natural gas countries such as China, India, and Australia to try to address expanding ammonia demand. This rising demand is caused, in part, by expanding population, increase in standard of living in developing/expanding countries, and by the diversion of food crops (e.g., corn) for ethanol fuel needs.

Thus, at roughly $1,000 per metric ton for merchant ammonia, the future for electrolytic ammonia from hydropower and other sustainable and green energy sources is beginning to appear brighter.

Another disconcerting fact is that many countries not possessing rich natural gas and coal supplies (or strict environmental standards) are required to import increasing amounts of ammonia from countries that have abundant supplies of cheap natural gas and coal. This is particularly true for the U.S., which now imports more than half of the 15 to 20 million metric tons of ammonia consumed annually, representing a trade imbalance of more than $5 billion per year.

Producing ammonia from hydropower

From a technical standpoint, there is no question that ammonia can be produced from water, air, and hydropower. The list of countries that produced ammonia from hydropower in the 20th century is fairly long — Canada, Chile, Egypt, Iceland, India, Norway, Peru, and Zimbabwe.6 Of the about ten plants that were operating then, only three — Que Que in Zimbabwe; Cuzco in Peru; and a facility in Aswan, Egypt — are believed to be still in operation.

In all of these plants, the NH3 manufacturing process used large electrolyzers to crack water to provide hydrogen for the H-B synthesis. The nitrogen was obtained by air separation, usually using cryogenic methods. The three plants in Norway were notable for their relatively large capacity, with a total output of about 440,000 metric tons per year of ammonia. However, the combined electrolytic ammonia production capacity of all the plants in all the countries was still only a small fraction of the amount produced with natural gas and coal.

Many of the electrolytic ammonia plants were built in the 1940s and 1950s, but some even before that. By the 1980s, a convergence of issues finally eroded the viability of the electrolytic ammonia business. These issues included the cost of maintenance of aging facilities, low efficiency of the older electrolyzers, the spread of transmission grid connections making the electricity valuable and costly, and, most importantly, the availability of extremely cheap natural gas in nations that took up manufacture of NH3.

Does ammonia from hydropower make sense?

The worldwide market demand for ammonia shows no signs of abating. Driven largely by the increased food demand in developing nations, there are no indications that the value and price of ammonia, although volatile, will drop precipitously from its recent highs, at least in the U.S. Even a significant decrease in demand for corn-produced ethanol driven by transportation fuel consumption would not appear to make a big difference internationally in demand, although it could have moderate effect in the U.S.

Moreover, the current high ammonia prices represent ammonia made from finite and reducing supplies of fossil fuels, which have competing demands for consumption in household heating and cooking, and in transportation and industry. These demands will not decrease, and if more natural gas is used for transportation, they will only grow. Thus, the market demand for ammonia, and associated high prices, would appear to be stable for years to come.

The question of economic viability in the marketplace of electrolytic ammonia produced from hydropower has more to do with the efficiency and cost to produce than it does a robust market. Electrolytic ammonia plants have suffered in the past for primarily two reasons: the “fuel cost,” which is essentially the amount and cost of electric power to make ammonia, and the capital cost of the EHB equipment. Historically, the efficiency of the hydrogen production by electrolysis has been relatively low, and the capital costs of electrolyzers have been relatively high.


Table 1: Cost of Ammonia Produced Using Haber-Bosch Synthesis Technology

Figure 2 shows the major functions involved in producing ammonia from a source of electricity such as hydropower. The essential difference between the process shown in v versus manufacture of ammonia from, say, natural gas is the method of delivering the hydrogen. The photo on page 43 shows the hydrogen being delivered by cracking water with electrolyzers. For ammonia from natural gas, the electrolyzer box would be replaced with a box representing steam methane reforming (SMR) to generate the hydrogen. What experience has shown, however, is that when the cost of electricity and the capital costs of electrolyzers are accounted for, SMR has been a much more cost-effective means of delivering hydrogen to manufacture low-cost ammonia.

However, driven largely by the challenges and opportunities of the hydrogen economy, considerable effort has been focused recently on improving the performance and lowering the capital cost of large electrolyzers.

In 2008, GE Global Research reported results of its development program for low-capital-cost, MW-scale electrolyzers.7 Rather than try to improve the efficiency of the electrolysis process, GE chose to focus on reducing the capital cost ($ per kW of electricity input) at an assumed conversion efficiency of 50 kilowatt-hours (kWh) per kilogram of H2. GE estimated the cost of the “stack module” at only $150,000 per 1 MW of electricity input, 20 kilograms of H2 per hour output. The balance of system — primarily transformer-rectifier, electrolyte management, and controls — were estimated to bring the electrolysis system total capital cost to about $400 per kW of electricity input. This is compared to about $1,000 per kW of electricity input capital costs for earlier-generation electrolyzers, such as those used in Norway and other countries. A similar approach, that of lowering the capital costs, is being pursued by a United Kingdom-based company, ITM Power, although this company has been working in the vehicle-scale hydrogen generation regime and has yet to announce plans for megawatt-scale electrolyzers.8 

Table 2: Cost of Ammonia Produced Using Solid State Synthesis Technology

Based on an earlier analysis of ammonia plant costs for harnessing wind energy,9 we estimate that the capital costs associated with ammonia synthesis equipment (including an air separation unit but excluding tank storage and transportation) for an EHB system would be $825 to $1,500 per kW of electricity input. The higher number reflects costs for older generation electrolyzers, and the lower part of the estimate reflects new technology electrolyzer prices in the $350 to $400 per kW of electricity range. Then, for example, assuming a cost recovery factor of 12 percent, an ammonia synthesis plant with 100 MW of electricity capacity at a hydropower facility that produces about 73,000 metric tons of ammonia per year would provide a metric ton of ammonia for the costs shown in Table 1.

Table 1 shows that the cost for a metric ton of ammonia produced using new technology electrolzyers is $110 less than the cost using the old electrolyzer technology. It can also be seen that the advanced electrolyzer technology coupled with low electricity costs suggest that electrolytic ammonia can be made at costs competitive with fossil fuel merchant ammonia.

At the same time, there are other ammonia synthesis technologies under development that could make the outlook of hydropower to ammonia even brighter. One of those has been named “solid state ammonia synthesis” or SSAS.@10 SSAS in effect combines the functions of the electrolyzer and the H-B synthesis loop into one process and, because the process step of producing hydrogen is eliminated, claims significantly higher efficiency for ammonia synthesis and decreased capital costs. The SSAS process and equipment are still under development. However, SSAS researchers estimate that the capital costs for that process would be about $650 per kW of electricity input and that the electric energy needed to produce a metric ton of NH3 would be about 7.5 megawatt-hours (MWh), compared to about 12 MWh for the EHB approach. Then for SSAS, a 100-MW ammonia synthesis plant would produce about 117,000 metric tons of NH3 per year and would have costs per metric ton of $145 to $445, depending on the cost of electricity (see Table 2).

If SSAS technology delivers on its promise, extremely cost-effective ammonia should be able to be produced from hydropower.

Other issues

Additional issues may come into the question regarding whether ammonia synthesis from hydropower makes good economic sense. Clearly, with “stranded” resources without a ready or convenient grid connection, ammonia synthesis could be lucrative, provided there is a storage and delivery system for the ammonia. Also, distance to market and characteristics of the market (e.g., needing large storage capability) could be a factor. Fortunately, however, ammonia is quite easy to store in either pressurized or atmospheric tanks and can be transported with trucks, barges, rail, and/or pipeline. In fact, there are 3,000 miles of carbon steel ammonia pipeline operating at full capacity in the U.S. heartland.

Another factor would be the ultimate end use of the ammonia. For instance, consider ammonia that is being produced to use as a fuel, essentially storing the hydropower. How the ammonia would be distributed to the end user and how and at what efficiency the ammonia fuel would be converted back to electric power would be issues to consider, in that both rely on the efficiency of the generator.


We believe the forgoing discussion strongly suggests that a new emphasis on manufacture of ammonia from hydropower makes good sense. Technology developments promise to make big improvements in the efficiency and reduced costs for synthesis equipment. And, with current market outlooks for merchant ammonia made from fossil fuels, the economics of electrolytic ammonia appear competitive. Finally, every metric ton of ammonia produced with hydropower is produced with zero greenhouse gas emissions.


  1. Linborg, Anders, Ammonia Partnership AB, private communication, 2008.
  2. Kroch, E., “Ammonia — A Fuel for Motor Buses,” Journal of the Institute of Petroleum, Volume 31, 1945, pages 213-223.
  4. Fagerstrom, Bob, “NH3 from Coal with Carbon Sequestration,” 5th Annual Ammonia Fuel Conference, Iowa Energy Center, Ames, Iowa, 2008.
  5. Buckley, Glen, CF Industries, private communication, 2008.
  6. Bradley, Dave, Freedom Fertilizer LLC, private communication, 2008.
  7. Bourgeois, D., T. Swalla, and T. Ramsden, “Low Cost Electrolyzer Technology for Industrial Hydrogen Markets,” National Hydrogen Association Annual Meeting, Washington, D.C., 2008,
  9. Leighty, William, and John H. Holbrook, “Transmission and Firming of GW-Scale Wind Energy via Hydrogen and Ammonia,” Wind Engineering, Volume 32, No. 1, 2008, pages 45-65.
  10. Ganley, Jason, “Solid State Ammonia Synthesis from Renewable Energy,” 4th Annual Ammonia Fuel Conference, Iowa Energy Center, Ames, Iowa, 2007.

John Holbrook is director of AmmPower LLC, a consulting company focusing on stationary and vehicular applications of ammonia as a fuel and an energy storage medium. Bill Leighty is director of The Leighty Foundation, a charitable family foundation that funds energy policy research by nonprofit organizations.  

This article has been evaluated and edited in accordance with reviews conducted by two or more professionals who have relevant expertise. These peer reviewers judge manuscripts for technical accuracy, usefulness, and overall importance within the hydroelectric industry.

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