New P2A2P Scheme Proposed in Norway
Byon December 05, 2018
Svalbard, the Norwegian archipelago that sits far above the Arctic Circle, is being considered for the back end of an electricity-to-ammonia-to-electricity (P2A2P) scheme. As reported in Norway’s Teknisk Ukeblad (TU), the state-owned utility Statkraft has surfaced ammonia as one of four possible hydrogen-oriented solutions to meet Svalbard’s energy needs – and then short-listed it for further study.
One strand of the story starts with the discovery of coal on Svalbard in the late 19th century and the subsequent launch of commercial mining that supplied coal for local consumption as well as export. This arrangement continued throughout the 20th century, but in the current century it became clear that the economic life of the resource was drawing to a close. Although fewer than 3,000 people live on Svalbard, and most of them are connected in some way to coal mining, the Norwegian Ministry of Oil and Energy took on the challenge of developing an alternative energy system.
As a first step, the Ministry commissioned a study from the consulting firms Thema and Multiconsult. Their report, “Options for future power supply on Svalbard,” was released on July 6, 2018. It concluded that combustion turbines powered with liquefied natural gas imported from the mainland would be the least expensive option. This approach would also cut the archipelago’s greenhouse gas footprint in half, with further reductions possible to the degree renewably produced methane could displace fossil methane in the supply base.
So far so good, but at the Ministry’s public input session on November 9, 2018, another perspective was presented. This one had its origin in a wind farm built in 2013 by Varanger Kraft, a utility that serves the county of Finnmark. Finnmark occupies the part of the Norwegian mainland that is closest to Svalbard across the Barents Sea. Although the utility received a concession for 200 MW, transmission constraints limited the as-built Raggovidda Wind Farm to a power capacity of just 45 MW. This gap prompted consultations among interested stakeholders which in due course led a group of research institutions and industry players to form Project Haeolus. This initiative will, according to its website, put Varanger Kraft into “a new business: selling hydrogen instead of electricity.”
Haeolus, short for “Hydrogen-Aeolic Energy with Optimised eLectrolysers Upstream of Substation” (Aeolus is the god of wind in ancient Greek mythology), kicked off on January 1, 2018 with €6.9 million (USD$ 7.8 million) in funding from the European Union’s Horizon 2020 program. Its research mission is centered on the deployment at the Raggovidda site of a 2 MW Hydrogenics electrolyzer and “a smaller fuel cell for re-electrification.” These pieces of equipment, according to the Haeolus Web site, will be operated “in multiple emulated configurations (energy storage, mini-grid, fuel production).”
Haeolus consortium member Sintef, “the largest independent research organization in Scandinavia,” joined Statkraft in arguing at the Ministry’s November 9 session that Raggovidda hydrogen could be the answer to Svalbard’s need for a new energy system. At the session, the Statkraft-Sintef team, which also includes Statnett, the system operator of Norway’s electrical grid, and Yara (a member of the Ammonia Energy Association), presented its four hydrogen-oriented options for Svalbard: “compressed hydrogen, liquid hydrogen, hydrogen bound in methanol and hydrogen bound in ammonia.”
The team’s investigation had already led it to eliminate two of the four options: liquid hydrogen because it would be “too expensive” and methanol because an appropriate carbon source near the wind farm could not be identified. The remaining two were discussed at the session. The compressed hydrogen option would involve the use of 40 foot transport containers, each loaded with 780 kilograms of hydrogen compressed at 300 bar. On Svalbard, electricity would be produced with low-temperature proton exchange membrane /polymer electrolyte (PEM) fuel cells. The ammonia option would involve construction in Finnmark of a “micro-ammonia factory” with production capacity of 20,000 to 30,000 tonnes per year (55-82 tonnes per day), and fuel-to-electricity conversion on Svalbard using 10 MW solid oxide fuel cells with possible integration of a 10MW gas turbine.
At the close of the session, Statkraft recommended “that the government continue working with both compressed hydrogen and ammonia.” Adding these to Thema/Multiconsult’s preferred LNG alternative yields a generic option set that will appear frequently as authorities around the world grapple with energy system conversion: a “greenable brown” solution (represented here by the LNG option); a “hydrogen purist” solution (represented here by the compressed hydrogen option); and an “ammonia as hydrogen carrier” solution (represented here by the ammonia option).
And wherever this option set appears, the Svalbard economic analyses could prove instructive. Thema and Multiconsult concluded that the cost of the pure-brown LNG option over 25 years would be NK 1.5 billion (USD $176 million). Sintef and Statkraft concluded that the cost of the compressed hydrogen option would be NK 3.4 billion (USD $400 million) over the same period; and that the cost of the ammonia option would be NK 2.8 billion (USD $329 million).
The TU article reported that “Statkraft / Sintef’s ammonia solution was among those who got the most support.” The reason for this is presumably based on the embedded brown vs. green tradeoff: green is preferred if it’s not too much more expensive, which means the least expensive green option is the one that will win in many cases. Some of this flavor is captured in a quote from Statkraft manager Geir Magnar Brekke: “We are calling for a pioneering project. There are always hundreds of reasons for choosing the traditional solution. Hydrogen from Finnmark is not included in the [Thema/MultiConsult] report. We think it’s too bad not to have an emission-free solution for Svalbard.”
The TU article did not explicitly mention next steps, but Ministry officials indicated their expectation that “a new solution will be available from 2025.”