On November 25th, Guojin Securities released a research report calling 2024 the preparatory year for the hydrogen energy industry. Driven by policy promotion, demonstration effects, and industry cost reduction, the industry is expected to see an increase in volume next year, driving the industry towards commercialization. It is particularly noteworthy that, against the backdrop of the continuous decline in solar energy storage prices in China, integrated demonstration projects for wind solar energy production and storage at the green hydrogen consumption end continue to be launched, with a much larger hydrogen consumption scale than the fuel cell vehicle industry. So, what are the consumption methods in the field of Power to X, and what are the current problems faced on the road to commercialization and scale operation.

Ammonia blending combustion

The Action Plan for Low Carbon Transformation and Construction of Coal and Electricity (2024-2027), released by the National Development and Reform Commission in July 2024, clearly sets out the time nodes, technologies, and carbon reduction goals for coal-fired ammonia blending projects. It points out that by 2025, all the first batch of projects will start construction, and the transformed coal-fired power units should have the ability to blend more than 10% green ammonia. The carbon emissions per kilowatt hour should be reduced by about 20% compared to the average carbon emissions level of similar coal-fired power units in 2023.

Coal electricity mixed with ammonia combustion power generation technology, in simple terms, is to mix ammonia gas for ammonia combustion on the basis of the original coal powder combustion power generation. Overall, its technical process consists of three key steps: ammonia storage and gasification, coal ammonia mixed combustion, and exhaust gas treatment.

In 2022, the National Energy Group completed the first international trial of 35% ammonia blending combustion in a 40MW coal-fired boiler. In 2023, the National Energy Group continued to successfully implement ammonia blending combustion tests on 600MW coal-fired units. In 2023, Anhui Energy Group collaborated with Anhui Energy Laboratory to complete the ammonia blending of a 300MW coal-fired unit under multiple operating loads.

Project difficulty:

1. Storage and transportation costs: The high volatility of ammonia means that any small leakage during storage and transportation can quickly spread into the air, requiring high requirements for storage equipment. If converted into liquid ammonia storage, this leads to a compression cost that accounts for 5-10% of the production cost.

2. Difficulties in controlling nitrogen oxide (NOx) emissions: During the process of ammonia blending combustion, if ammonia is not completely burned, it may escape into the atmosphere in the form of ammonia gas, causing secondary pollution. In order to reduce ammonia escape, it is necessary to strictly control the combustion conditions, such as increasing the combustion temperature, optimizing the air excess coefficient, etc., to ensure complete combustion of ammonia.

3. Difficulties in boiler materials and anti-corrosion technology: Due to the corrosiveness of ammonia at high temperatures, traditional boiler materials may not be able to meet the requirements of ammonia blending combustion. Therefore, it is necessary to develop new high-temperature and corrosion-resistant boiler materials, such as high alloy steel, ceramic materials, etc., and the application of these new materials has also increased the cost of boilers.

SAF (Sustainable Aviation Fuel)

COP28 promises to increase the proportion of SAF in global aviation fuel to 6% by 2030 and to 20% by 2035.

According to the International Civil Aviation Organization (ICAO), 137 purchase agreements have been signed globally, including approximately 53.3 billion liters of SAF.

The vast majority of the top ten buyers are European and American companies, especially United Airlines and Delta Air Lines, which have signed 7 and 8 purchase agreements respectively, with a total purchase volume of approximately 1.43 billion liters and 390 million liters, respectively; The companies outside of Europe and America are Japan Airlines and Cathay Pacific Airways in Asia. The top ten producers are mainly European and American manufacturers, with Gevo and Fulcrum ranking in the top two with underwriting volumes of approximately 960 million liters and 670 million liters, respectively. The number of purchase agreements is 14 and 3, respectively, while Neste has the largest number of agreements, with a total of 25 and underwriting volumes of approximately 250 million liters.

In terms of production factories, there are currently at least 351 publicly announced SAF factories worldwide, involving a total production capacity of 91.1 million tons, approximately 113.9 billion liters.

There are several production technology routes for SAF, among which the main ones are HEFA (oil hydrogenation) and PtL SAF (electric based synthetic fuel). HEFA and Fischer Tropsch reaction to produce SAF are currently the most commercially viable methods. The technology route with the greatest potential for emission reduction is PtL SAF, which is closely integrated with the green hydrogen industry and theoretically can produce SAF products with a carbon reduction effect close to 100%.

At present, the Shuangyashan Green Methanol and Green Aviation Oil Demonstration Project under the state-owned enterprise Zhongneng Construction started construction on October 14th, taking the lead in the construction of the PtL SAF factory. The project includes a 450 MW wind farm and photovoltaic power station, which will produce hydrogen through water electrolysis and synthesize green aviation oil from biomass carbon dioxide through the Fischer Tropsch process. The planned annual production capacity is 300000 tons of green aviation oil, which will be put into operation in 2027. The total planned production capacity of China Energy Engineering PtL SAF project is 740000 tons per year

The main bottleneck of PtL SAF technology at present is the bidirectional high cost combination of carbon dioxide capture technology and electrolytic water hydrogen production technology. With the decrease in future wind and solar energy prices, the efficiency of hydrogen production through electrolysis, and the improvement of carbon dioxide capture technology, PtL SAF remains the most anticipated green aviation fuel technology.