Feasibility of a Midwest Green Hydrogen Ammonia Plant
This 2020 study assessed the technical, financial, and regulatory feasibility of a small-scale green hydrogen ammonia plant in the Midwest.
Challenge
Evaluating whether a small-scale hydrogen-ammonia production plant could be viable in the Midwest’s agriculture and industrial sectors.
Approach (Methodology & Analysis)
1. Market Assessment & Policy Review
Evaluated fertilizer and ammonia market demand, pricing trends, and supply chain factors.
Identified key regulatory barriers, including interconnection agreements, licensing, and environmental impact assessments.
Reviewed trade policies and tariffs, assessing how import/export rules affect production costs.
2. Technical Feasibility Study
Modeled renewable energy demand for producing green hydrogen via electrolysis to supply five Midwestern farms.
Assessed electrolyzer efficiency, plant design, and hydrogen-to-ammonia conversion via the Haber-Bosch process.
Determined land, water, and infrastructure requirements for the proposed facility.
3. Financial Pre-Feasibility & Sensitivity Analysis
Analyzed capital expenditure (CAPEX) and operating costs (OPEX), benchmarking against traditional ammonia production costs.
Simulated revenue projections based on fluctuating fertilizer prices and potential carbon tax credits or subsidies.
Conducted sensitivity analysis to assess the impact of CAPEX uncertainty, operational costs, and ammonia price fluctuations.
4. Risk & Impact Assessment
Evaluated economic risks from fertilizer market volatility and trade tariffs on construction materials.
Assessed environmental impacts, including water use, emissions, and biodiversity effects.
Modeled potential air quality, noise, and socio-economic impacts of plant construction and operation.
Key Findings & Insights
Significant Energy Requirements Limit Scalability
Producing 57.5 tons of ammonia for five farms would require 7.6 MW/day of renewable energy, making large-scale expansion costly.
Financial Viability Dependent on Government Incentives
Without a carbon tax credit, the project is not financially feasible, as ammonia produced via electrolysis costs $945/ton—far above market prices.
Government subsidies or carbon credits are essential to offset high CAPEX and ensure competitiveness.
Tariff & Market Volatility Pose Financial Risks
The global fertilizer market is volatile, and trade policies impact ammonia production costs.
U.S.-China steel tariffs raise capital costs, making plant construction more expensive.
Alternative Business Models Could Improve Feasibility
A pilot project in partnership with a large fertilizer corporation could allow for gradual scaling and R&D funding.