Japanese firms step up ammonia power development
Japanese thermal power firm Jera is bolstering the development of ammonia co-firing power generation technology with the country's engineering firms, as demand increases for cleaner feedstocks for electricity output to achieve Japan's 2050 carbon neutral goal.
Jera has partnered with IHI and Mitsubishi Heavy Industries (MHI) to separately develop and demonstrate a new burner capable of co-firing rate of at least 50pc ammonia at a coal-fired power plant until March 2029. The projects are estimated to cost around ¥45.2bn ($390mn) in total, of which the companies have secured about ¥27.9bn of subsidies from the Green Innovation Fund managed by state-controlled research and development institute Nedo. The funding for each pilot project is unclear.
Jera and IHI plan to develop the new co-firing burner and to install it at the No.4 or No.5 unit at Jera's Hekinan coal-fired power plant in central Japan's Aichi prefecture. The firms target to develop the advanced burner and consider specification for boilers and other equipment by the April 2024-March 2025 fiscal year, then start testing co-firing with more than 50pc ammonia at the existing coal-fired unit by 2028-29.
Jera and IHI have already worked together on demonstrating co-burning of ammonia and coal at Hekinan to ensure a 20pc co-firing ratio at the No.4 unit during 2024-25. The project is also backed by Nedo.
Jera also has a project with MHI to develop an ammonia-dedicated burner suitable for coal-fired boilers and demonstrate operations of the burner at actual boilers. The companies will develop the new burner and draw up a master plan for equipment by 2024-25 and verify co-firing with at least 50pc ammonia at two units with different boiler types by 2028-29. It is still unclear which power plant will be candidate for the pilot project.
The 50pc ammonia co-firing target is beyond Tokyo's current goal to achieve a 20pc ratio by 2030. If the companies advance the development of a new burner technology as planned by 2028-29, demand for ammonia may increase faster than the original schedule. Japan's trade and industry ministry under the current roadmap is expecting ammonia fuel demand to reach 3mn t/yr by 2030 and 30mn t/yr by 2050.
Related news posts
Low US natgas prices help ammonia economics
Low US natgas prices help ammonia economics
Houston, 8 May (Argus) — Nitrogen fertilizer production costs in the US are primed to hit historically low levels through the third quarter, potentially creating favorable margin and arbitrage opportunities during the offseason as bloated natural gas inventories depress key feedstock prices. Estimated ammonia production costs for most US producers tied to Henry Hub natural gas prices have spent the last 12 consecutive weeks below $100/short ton (st) on sub-$2/mmBtu feedstock prices. They should benefit from sub-$3/mmBtu natural gas costs through October, based on the 7 May Nymex futures curve. A mild winter stemmed seasonal withdrawals from natural gas storage and mitigated heating demand. US natural gas inventories exited the 2023-24 winter at the highest seasonal levels in eight years. High inventories help contain US gas prices by easing concerns about spikes in demand or supply shortfalls. Slackened natural gas demand has continued through April and has maintained downward price pressure, even as producers curtail output. The US Energy Information Administration (EIA) said that it expects inventory growth to lag average levels in the coming months as producers cut output in response to lower prices. But inventories were still expected to exit the injection season, when gas stockpiles are replenished to meet winter heating needs, at an all-time high above 4.1 Tcf, the EIA said. Natural gas is the primary feedstock for US ammonia producers, comprising on average 60-70pc of total production costs at current prices. Ammonia production costs have not spent this long below $100/st since May-July 2020, according to Argus data. Ammonia is a key feedstock for urea and UAN manufacturing. Sinking feedstock ammonia costs lowers the cost floor for upgraded nitrogen alternatives and fosters favorable margin opportunities. US producer CF Industries said during its first quarter results the energy curves between North America and Europe — with the latter a higher-cost ammonia production hub — remain wider than historical levels, creating potential arbitrage scenarios. Ammonia production costs based on the Dutch TTF natural gas day-ahead contract, which serves as the European benchmark, have averaged more than three-times more than those tied to Henry Hub since January, according to Argus data. "Longer term, we expect the global energy cost structure to continue to provide significant margin opportunities for our North American production network," CF chief executive Tony Will said during the company's earnings call. By Connor Hyde Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Baltic April gas consumption rises on year
Baltic April gas consumption rises on year
London, 8 May (Argus) — Gas demand in the three Baltic states and Finland was up by 26pc on the year in April, although there were diverging trends in the different markets. Consumption in Finland, Estonia, Latvia and Lithuania totalled 3.56TWh, up from 2.82TWh a year earlier but down from 4.31TWh in March ( see data and download, graph ). That said, total demand was still well below the 2018-21 average for the month of 5.03TWh. Consumption was up on the year in all three Baltic countries, but Finnish demand edged down. This was the first month in which Finnish demand was lower on the year since April 2023. In contrast, Lithuanian consumption surged by nearly 50pc on the year, and was also higher than in February and March despite the end of the traditional heating season. Gas-fired power generation held broadly stable from a year earlier, totalling 305MW across the four countries compared with 301MW in April last year ( see gas-fired output table ). Output edged down in Estonia and Lithuania and dropped by 25MW in Finland, but this was offset by a 31MW increase on the year in Latvia. But, unlike in March, gas-fired output fell by 246MW, a large contributing factor to the lower gas demand on the month. Many combined heat and power plants will have switched off at around the end of March or mid-April as the traditional heating season came to a close, possibly driving the fall in gas-fired output. But renewables generation was also stronger in April than March, particularly in Finland, where wind output rose to 2.03GW from 1.63GW, while hydro also stepped up. In Lithuania, solar and waste-based production increased on the month. Demand was also stronger despite higher year-on-year minimum temperatures in all four capital cities, which may have curbed most residual heating demand after the end of the traditional heating season, although there was a brief cold snap towards the middle of the month that temporarily drove up demand ( see temperatures table ). With gas-fired power generation only marginally higher than a year earlier, and the warmer weather curbing residential demand, a possible uptick in industrial demand may have driven the aggregate rise in consumption. Average prices on the regional GET Baltic exchange were €33.30/MWh in April, up by 8pc on the month but 30pc lower than a year earlier, the exchange said. Prices increased in around the middle of April "due to the unexpectedly cold weather and the increased demand for gas in the market", but then fell again "as the weather warmed", GET Baltic chief executive Giedre Kurme said. There were a total of 2,400 transactions last month for a combined 642GWh of gas. Volumes sold on the Finnish market accounted for 42pc, the joint Latvian-Estonian market 33pc, and the remaining 25pc was sold in Lithuania. Klaipeda and Balticconnector to change flows The return of the Finnish-Estonian Balticconnector pipeline and the start of maintenance at the Klaipeda LNG terminal in Lithuania will drive changed flow patterns this month. The Balticconector resumed commercial operations on 22 April after being off line since 8 October following a rupture caused by a dragging ship anchor . The reconnection of Finland to its southern neighbours has allowed for strong southward flows since 22 April, at an average of 62 GWh/d on 22 April-7 May. Some of this gas is probably being injected into storage, with the region's only facility at Incukalns switching to net injections on 23 April from net withdrawals of 7 GWh/d earlier in the month. Net injections have since averaged 46 GWh/d on 23 April-6 May, the latest data from EU transparency body GIE show. Stocks at Incukalns ended the withdrawal season on 30 April at 11.29TWh, the highest since at least 2014 and well above the previous high from last year of 9.03TWh. Large volumes of gas that had been stored over the previous summer for export to Finland over the winter were left stranded in Incukalns after the Balticconnector went off line. And the Klaipeda LNG terminal began maintenance on 1 May, which will last until 15 June, as the terminal's Independence floating storage and regasification unit (FSRU) departed for dry-docking in Denmark. As a result, there were net exports from Poland to Lithuania for the first time since early November, at an average of 17 GWh/d on 1-7 May. Some of this gas could have been withdrawn from Ukrainian storage, with flows from Ukraine to Poland averaging 10 GWh/d over the same period. Lithuania's largest supplier Ignitis has said it stored some volumes in Ukraine. And flows at the Kiemenai border point with Latvia have also flipped towards Lithuania, averaging 11 GWh/d on 1-7 May, compared with net flows towards Latvia of 15 GWh/d in April. That said, there were no flows at the point on 6-26 April. By Brendan A'Hearn Finnish, Baltic average gas-fired power generation MW Apr-24 Apr-23 Mar-24 ± Apr 23 ± Mar 24 Estonia 5 6 7 -1 -2 Latvia 49 18 215 31 -166 Lithuania 46 47 52 -1 -6 Finland 205 230 277 -25 -72 Total 305 301 551 4 -246 — Entso-E Daily average minimum temperature in FinBalt capitals °C Apr-24 Apr-23 Mar-24 ± yr/yr ± m/m 2014-23 Apr avg Vilnius 5.22 3.83 0.93 1.39 4.29 2.63 Riga 5.01 4.98 1.93 0.03 3.08 3.65 Tallinn 2.00 1.46 -0.59 0.54 2.59 1.17 Helsinki 0.11 -0.45 -2.55 0.56 2.66 0.12 — Speedwell Finnish and Baltic April consumption by country GWh Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
New Zealand’s Genesis Energy to resume coal imports
New Zealand’s Genesis Energy to resume coal imports
Sydney, 8 May (Argus) — New Zealand's upstream firm and utility Genesis Energy plans to resume thermal coal imports later this year to feed its dual gas- and coal-fired Huntly power plant. The resumption was because of lower domestic gas production and rapidly declining coal stockpiles, and will mark the firm's first coal imports since 2022. Coal inventories at the 953MW Huntly plant, — New Zealand's largest power station by capacity and the country's only coal-fired facility — recently slipped below 500,000t, down from 624,000t at the end of March, and will fall below 350,000t by the end of the winter. This will trigger a need to purchase more coal to maintain a target operational stockpile of around 350,000t ahead of winters in 2025 and 2026, the company said on 8 May. Imports are currently the most efficient option for the quantity the company will need, with a delivery time of around three months, chief executive Malcolm Johns said. Genesis typically imports from Indonesia, the company told Argus . Gas production in New Zealand has dropped at a faster rate than expected, with major field production in April down by 33pc on the year, Genesis said. Lower gas availability typically leads to more coal burn, because the Huntly plant runs on gas and coal. This is in addition to an extended period of low hydropower inflows in recent months, which required higher thermal generation to ensure supply security. A prolonged outage at Huntly's unit 5 gas turbine between June 2023 and January 2024 also led to an even greater need for coal-fired generation, Genesis said. Biomass transition The company — which is 51pc owned by the state — is the second-largest power retailer in New Zealand, behind domestic utility Mercury, according to data from the Electricity Authority. It has a NZ$1.1bn ($659mn) programme for renewable power generation and grid-scale battery storage , which includes a potential replacement of coal with biomass at Huntly. But the transition to biomass "will take some years," Johns said. Genesis has successfully completed a biomass burn trial at Huntly last year and has collaboration agreements with potential New Zealand pellet suppliers, but there is currently no local source for the type of pellets needed for the plant. Genesis is hoping to move to formal agreements "as soon as counterparties are able". The company will not consider importing pellets, it told Argus . "We will only use biomass if we can secure a local New Zealand supply chain that is sustainable and cost-effective," it said. Domestic gas production New Zealand's three-party coalition government said separately on 8 May that the "material decline" in local gas production threatens energy security, blaming the previous Labour party-led government for "policy decisions which have disincentivised investment in gas production." The decisions — which were part of the former government's pledge to achieve a carbon-neutral economy by 2050 — led to a reduction in exploration for new gas resources since 2021, while suppressed maintenance drilling reduced production from existing gas fields, according to a joint release from energy minister Simeon Brown and resources minister Shane Jones. "Due to this significant reduction in gas production, the government has also been advised that some large gas consumers are expressing concern about their ability to secure gas contracts," the government said. Major industrial users such as Canada-based methanol producer Methanex have been forced to reduce production as a result, it noted. "We are working with the sector to increase production, and I will be introducing changes to the Crown Minerals Act to parliament this year that will revitalise the sector and increase production," Jones added. By Juan Weik Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Pakistan's ECC approves urea imports of 200,000t
Pakistan's ECC approves urea imports of 200,000t
Amsterdam, 8 May (Argus) — Pakistan's Economic Coordination Committee (ECC) met on 7 May and has approved the import of 200,000t of urea for the Kharif summer season. The ECC did not disclose an exact timeline, but a tender will have to be issued shortly if the imports are to meet demand in Kharif, which runs from April to September with demand peaking in June-July. Pakistan occasionally enters the import market to plug supply gaps in key consumption periods. State-owned importer TCP previously agreed a deal with Azerbaijan's state-owned Socar in early December last year to source 200,000t of urea for arrival by 20 January. Domestic supplier Engro began maintenance at its 1.3mn t/yr granular urea Enven plant towards the end of April and is expected to return to production in mid-June. Pakistan's urea inventories started April at around 170,000t, but are set to be under significant pressure in June-July, data from the country's national fertilizer development centre (NFDC) show. Demand is set to hit over 800,000t in June and around 650,000t in July, outstripping typical domestic output of 520,000-555,000 t/month in the peak summer months. This has prompted the need for imports, given current stock levels. By Harry Minihan Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Business intelligence reports
Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.
Learn more