Catalyzing Renewables

In “Harvesting Minnesota’s Wind Twice” (Issues, Spring 2024), Ariel Kagan and Mike Reese discuss their efforts targeting green ammonia production using water, air, and renewable electricity to highlight the role of community-led efforts in realizing a just energy transition. The effort showcases an innovative approach to spur research and demonstrations for low-carbon ammonia production and its use as a fertilizer or for other energy-intensive applications such as fuel for grain drying. Several themes stand out: the impact that novel technologies can have on business practices, communities, and most importantly, the environment, and the critical policies needed to drive change.

The market penetration of renewables in the United States is anticipated to double by 2050, to 42% from 21% in 2020, according to the US Energy Information Administration. However, a report by the Lawrence Berkeley National Laboratory finds that rapid deployment of renewables has been severely impeded in recent years because it takes, on average, close to four years for new projects to connect to the grid. Therefore, technologies such as low-carbon ammonia production catalyze the deployment of renewables by creating value from “islanded” sources—that is, those that are not grid-connected. They also reduce the energy and carbon intensity of the agriculture sector since ammonia production is responsible for 1% of both the world’s energy consumption and greenhouse gas emissions.

US Department of Energy programs such as ARPA-E REFUEL and REFUEL+IT have been instrumental in developing and showcasing next-generation green ammonia production and utilization technologies. Pilot-scale demonstrations, such as the one developed by Kagan and Reese, significantly derisk new technology to help convince early adopters and end users to pursue commercial demonstration and deployment. These programs have also created public-private partnerships to ensure that new technologies have a rapid path to market. Other DOE programs have been driving performance enhancements of enabling technologies such as water electrolyzers to reduce the cost of zero-carbon hydrogen production and further expanding end uses to include sustainable aviation fuels and low-carbon chemicals.

The leap from a new technology demonstration to deployment and adoption is often driven by policy. In their case, the authors cite a tax credit that provides up to $3 per kilogram of clean hydrogen produced. But uncertainties remain: the US government has not provided full guidance on how this and other credits will be applied. Moreover, the production tax credit expires after 10 years, lower than typical amortization periods of capital-intensive projects. Our primary research with stakeholders suggests that long-term power purchase agreements with the renewable energy producer and an ammonia (or other product) producer could help overcome barriers to market entry.

Although their article focuses on the United States, the lessons that Kagan and Reese are gaining might also prove deeply impactful worldwide. In sub-Saharan African countries such as Kenya and Ethiopia, crop productivity can be directly correlated with fertilizer application rates that are lower than global averages. However, these countries have abundant renewable resources (geothermal, hydropower, wind, and solar) and favorable policy environments to encourage green hydrogen production and use. Capitalizing on the technology being demonstrated in Minnesota, as well as in DOE’s Regional Clean Hydrogen Hubs program, could enable domestic manufacturing, increase self-reliance, and improve food security in these regions and beyond.

Sameer Parvathikar