Energy
Monday, July 25th, 2022 10:00 am EDT
The idea of pairing green ammonia production with distributed wind and solar resources at US farms seemed like so much pie in the sky just a couple of years ago. Nevertheless, here comes the startup ReMo Energy with a new round of $5.25 million in additional funding to kick the idea into high gear, with the influential investor group Breakthrough Energy Ventures among those assisting.
The Scoop On Fertilizer
Since much of the global ammonia fertilizer supply chain relies on natural gas for sourcing, the ongoing spike in natural gas prices is pushing up fertilizer prices in the US and elsewhere. Power outages in China and Russia’s unprovoked invasion of Ukraine are among other factors pushing up global fertilizer costs.
“Global fertilizer prices are at near record levels and may remain elevated throughout 2022 and beyond,” explains the US Department of Agriculture. “Fertilizer prices account for nearly one-fifth of U.S. farm cash costs, with an even greater share for corn and wheat producers. Fertilizer accounts for 36 percent of a farmer’s operating costs for corn, and 35 percent for wheat.”
“These elevated prices could have implications for crop production in 2022 and 2023.The Russian invasion of Ukraine has exacerbated the already limited fertilizer supply situation and has triggered import-export restrictions that will compound shortage concerns,” they add.
More DERS, More Green Ammonia For US Farmers
The US Department of Energy is a big fan of decentralized, distributed energy resources, and not just because hyper-local wind turbines and solar panels can help with grid resiliency and reliability. The Energy Department has also been eyeballing distributed wind and solar as an economic assist for US farmers.
Back in 2020, CleanTechnica took note of the agency’s enthusiasm for distributed wind, in particular, which it defines as wind turbines of any size that generate electricity for on-site use, or for use in a local grid.
The cost of installing a wind turbine for distributed purposes can be a stumbling block for individual farmers, but the ability to generate a value-added product could sweeten the deal. For example, farmers with access to their own distributed wind could produce green hydrogen with their excess clean kilowatts. They could also use the hydrogen to produce renewable ammonia fertilizer.
Aside from providing themselves with a stable supply of fuel, fertilizer and store-able energy at a predictable price, farmers could potentially market any excess green hydrogen or ammonia as additional cash crops.
ReMo Has A Plan For Green Hydrogen & Ammonia
ReMo Energy, for one, did not let the green ammonia grass grow under its feet. Last May the Boston-based firm announced the launch of its first commercial offering, “ReMonia™,” a nitrogen fertilizer production system that takes advantage of the low cost of solar as well as wind.
“Solar and wind resources are the lowest marginal cost sources of electricity in most of the world today. The dropping costs and near universal availability of wind and solar resources have created an opportunity for the world to synthesize high-volume commodities at competitive prices without carbon emissions,” ReMo explained. “ReMo Energy’s technology makes it possible to produce nitrogen fertilizers and other materials right where they are needed directly from local energy sources.”
Electrolyzer news is old hat these days, but ReMo is staking out a name for itself with a focus on predictive modeling and cost cutting, aimed specifically at smoothing out the bumps for distributed, intermittent renewable energy resources.
“With this technology, we are not only tackling decarbonization, but we are also helping to shorten agricultural supply chains and ensure farmers everywhere can nourish the world without being at the mercy of uncertain fertilizer supply,” added ReMo CEO and co-founder Scott Rackey.
Beyond Green Ammonia
The latest news from ReMo is last week’s announcement of an additional $5.25 million seed round. AiiM Partners spearheaded the round with Breakthrough Energy Ventures, Darco Capital, and other investors participating.
It seems that green ammonia fertilizer is just the beginning for ReMo. The company is already eyeballing fuels and polymers.
“While ReMo will initially focus on green ammonia for clean fertilizer applications in the corn belt of the U.S., future markets will include shipping fuel and hydrogen storage,” the company explains.
“ReMo Energy will use the funding proceeds to scale commercial operations throughout the US Midwest and meet demand from its growing base of customers,” they add.
AiiM, for one, anticipates a quick return.
“ReMo’s technology and innovative approach can scale production of renewable materials in two years, versus what typically takes ten years for competitors, while also being cheaper than fossil-fuel based products,” said the firm’s founder and Managing Partner, Shally Shanker.
Scaling Up Green Ammonia In The US
A similar, distributed approach involving fertilizer production has been taking shape under the umbrella of the Green Ag Initiative of the University of Minnesota, which runs the West Central Research and Outreach Center in Morris, Minnesota.
The main goal of WCROC is to introduce more renewables into the US agricultural profile, both as producer and consumer. They may also be on to a solution that helps Minnesota reduce its dependence on imported fertilizer.
“Minnesota imports most of the ammonia fertilizer used by farmers,” WCROC points out. “We are investigating the technical feasibility and economic profitability of a small-scale distributed ammonia production system.”
WCROC has been hammering away at the profitability angle since at least 2013, and it looks like all that hard work is about to pay off.
The US ammonia fertilizer industry could use a bit of a shakeup. As of last year, there were only 32 ammonia plants operating in 17 states, primarily Louisiana, Oklahoma, and Texas.
If the green fertilizer market takes off, Oklahoma and Texas would not necessarily lose their vanguard spot. They could leverage their considerable renewable energy assets for large scale green ammonia production.
Louisiana is the outlier among the three states, but probably not for long. Both onshore and offshore wind resources in Louisiana and the rest of the southeast are less than optimal. However, Louisiana policy makers jumped on the idea of mining the Gulf of Mexico for offshore wind power back in 2020, when the Energy Department first sketched out some economic scenarios for Gulf wind.
Green ammonia could be one of those winning scenarios for offshore wind. Louisiana happens to be the home state of the leading global fertilizer producer CF Industries, which is already working the green ammonia angle. The company has a facility under construction at its Donaldsonville complex, and it will need plenty of clean kilowatts to run the electrolyzer systems. When the plant gets under way in 2023, CF expects to produce about 20,000 tons of green ammonia per year.
Meanwhile, Texas is already working on a renewable hydrogen hub, which means that it is just one step away from green ammonia fertilizer. Initial planning for the green hydrogen hub surfaced in January of 2021, apparently without without the offshore wind element. Last week, though, President Joe Biden made it clear that both Texas and Louisiana will be the focus of Gulf of Mexico offshore wind development.
The firm Green Hydrogen International is already on the case. As reported by our friends over at the Ammonia Energy Association, the firm is planning to site “the world’s largest green hydrogen production & storage hub” in Duval County, Texas, with an assist from 60 gigawatts of wind and solar.
“Storage caverns will be created underground in the nearby Piedras Pintas Salt Dome (fifty caverns totaling 6TWh energy storage), and the facility will buy & sell renewable energy to Texas’ electricity grid (ERCOT),” AEA explains. “Developers are targeting the first operational phase in 2026, amounting to 2 GW of green hydrogen production.”
“Hydrogen will also be transported by pipeline to the Port of Corpus Christi and converted to ammonia for export,” they add, which is interesting.
If the top green ammonia-producing states in the US have their eyes on the export market, that leaves plenty of wiggle room for companies like ReMo to help US farmers over the fertilizer hump in terms of domestic supply.
Follow me on Twitter @TinaMCasey.
Photo (cropped): Green ammonia could help stabilize the cost and supply of fertilizer for US farmers (courtesy of USDA).
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