Tomasz

“The era of cheap & abundant energy is long gone. Money supply & debt have grown faster than real economy. Debt saturation is now a real risk, requiring a global scale reset.”"We are now in new era of expensive unconventional energy

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13 hours ago, Geoff Guenther said:

Expensive oil contributed to the financial crisis as countries tried to offset the price through borrowing even as banks were lending more to consumers. 

Expensive oil, eh? Try rolling an oil barrel into Starbucks and load it with your favorite latte. It'll cost you $3,700--despite the fact that while oil requires a million years to mature, coffee beans get right to it. Peasants grow most of them. They're easy to harvest, ship, roast and brew. Then drive out to an oilfield--ANY OILFIELD--and see what goes into harvesting a cup of oil. 

I have heard so much bullshit about expensive oil that I think I'll throw up the next time. And "expensive oil" had very little to do with the financial crisis. As I recall that was taking about a hundred million mortgages, slicing and dicing them into tiny pieces, putting them together in packages that no one could undo and selling them for a massive profit. No one went to jail. 

I don't know where you're from Geoff, or how old you are or even what level of education you have. And I'm not trying to pick a fight. But before you go talking about "expensive oil," at least visit an oilfield. I suspect you use plastics. Maybe pharmaceuticals. You likely learned to drive an ICE vehicle. Maybe you've had a surgical procedure. You couldn't have done any of those things without oil products. Please! For Christ's sakes, I don't mind if you go say this stuff at a cocktail party, but try not to insult us, will you.

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Wonder if an installed Watt really produces 1.8 kW/h per year. 

Edit: So 1 installed Watt with a 25% capacity factor times 5 hours times 365 days. If this is correct, then it should be 638 Watt hours. Is this wrong? 

https://www.irena.org/-/media/Files/IRENA/Agency/Publication/2019/May/IRENA_Renewable-Power-Generations-Costs-in-2018.pdf Page 20.

I gave you a 5% boost too. 

If these numbers are correct, then the payoff is truly awful, and we can alienate even more industries as a result. 

Edited by KeyboardWarrior
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24 minutes ago, KeyboardWarrior said:

Wonder if an installed Watt really produces 1.8 kW/h per year. 

Edit: Alright so 1 installed Watt with a 25% capacity factor times 5 hours times 365 days. If this is correct, then it should be 638 Watt hours. Is this wrong? 

https://www.irena.org/-/media/Files/IRENA/Agency/Publication/2019/May/IRENA_Renewable-Power-Generations-Costs-in-2018.pdf Page 20.

I gave you a 5% boost too. 

If these numbers are correct, then the payoff is truly awful, and we can alienate even more industries as a result. 

When I use the term installed watt, I mean the 20% of energy that gets converted to electricity. I'm not talking about the light radiation watts the panel is exposed to. I'm not aware of panels converting at 25% efficiency, although I've seen 22% recently.

Also, 5 hours is for the 'average' location in the US. In the Southwest (Arizona, New Mexico, and West Texas) this number is 6 hours per day, or 360 * 6 = 2160 watt-hours or 2.16 Kwh.

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3 minutes ago, Meredith Poor said:

When I use the term installed watt, I mean the 20% of energy that gets converted to electricity. I'm not talking about the light radiation watts the panel is exposed to. I'm not aware of panels converting at 25% efficiency, although I've seen 22% recently.

Also, 5 hours is for the 'average' location in the US. In the Southwest (Arizona, New Mexico, and West Texas) this number is 6 hours per day, or 360 * 6 = 2160 watt-hours or 2.16 Kwh.

I'm talking about what percentage of rated capacity these operate at. If a panel is rated for 1000 Watts, then its average output throughout the year will be anywhere from 20-40% of this. The 1000 Watt rating is the installed capacity. The capacity factor is how much of this is actually utilized. 

You already know these things, but I want to demonstrate what I mean. 

Edited by KeyboardWarrior

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1 hour ago, KeyboardWarrior said:

Alright, definitely doesn't work for Haber-Bosch, the chloro-alkali industry, or, and I'm almost certain even without having done the math for this one, that it wouldn't work for the cement industry. I think I'll go do some math on the paper industry too. 

You can get away with residential use, but these industries would need rates slashed by 75% before we can even talk about possibility. 

Renewable ammonia: Approx 20 MW/h per metric ton

Renewable sodium hydroxide: 1 ECU -> approx 7 MW/h

https://www.pnas.org/content/115/46/11680

This describes the synthesis of ammonia at room temperature and atmospheric pressure. There are various lab results showing this is possible, although their yield (in terms of ratio of product to catalyst) isn't all that great at present. Haber-Bosch is not the only means of making ammonia.

Solar farms for creating bulk chemical synthesis are likely to be structured differently from utility farms. It isn't necessary to invert the current into AC. Separating AlO3 (aluminum oxide) to make aluminum runs at 1.2 volts. Silicon cells usually produce .6 volts, so two of these in series is just enough to power the reaction - times tens of thousands of cells in parallel.

In any case, such a solar farm would be located right at the plant, there would be no intermediaries and no long distance power transmission.

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7 minutes ago, KeyboardWarrior said:

I'm talking about what percentage of rated capacity these operate at. If a panel is rated for 1000 Watts, then its average output throughout the year will be anywhere from 20-40% of this. The 1000 Watt rating is the installed capacity. The capacity factor is how much of this is actually utilized. 

You already know these things, but I want to demonstrate what I mean. 

NREL uses a term called 'flat plate equivalent'. Panel output will follow a curve over the day, spanning as much time as there is sun overhead. Squash this all down, and the equivalent is 5 hours at 100%. The panels generate 'something' for many more hours. 40% of 100 watts is 40 watt-hours, 40 watt-hours x 8 hours = 320 watt-hours. If the noon peak (2 hours) is essentially 100 watts, then one gets 520 watt-hours, at least theoretically.

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37 minutes ago, Meredith Poor said:

https://www.pnas.org/content/115/46/11680

This describes the synthesis of ammonia at room temperature and atmospheric pressure. There are various lab results showing this is possible, although their yield (in terms of ratio of product to catalyst) isn't all that great at present. Haber-Bosch is not the only means of making ammonia.

Solar farms for creating bulk chemical synthesis are likely to be structured differently from utility farms. It isn't necessary to invert the current into AC. Separating AlO3 (aluminum oxide) to make aluminum runs at 1.2 volts. Silicon cells usually produce .6 volts, so two of these in series is just enough to power the reaction - times tens of thousands of cells in parallel.

In any case, such a solar farm would be located right at the plant, there would be no intermediaries and no long distance power transmission.

To make enough hydrogen from electrolysis for a ton of ammonia still requires 17 MW/h at 80% efficiency. That puts you at a cost of  $850 per ton before the gas even reaches the reactor. I'm aware of a number of experiments and ideas for ammonia synthesis at room temperature, and they're a very long ways from being practical. They need to be more efficient, scaled up, and a lot less expensive. 

Chemical producers can't justify making a solar farm on site. It's far too expensive, and if the power company builds it, we're back to the prior problem where the energy cost far exceeds the current price with profit. A renewable ammonia plant rated at 1000 tons per day will require 600 MW continuously regardless of how efficient the reaction proceeds because of hydrogen production. It's still a nightmare. 

 

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40 minutes ago, Meredith Poor said:

NREL uses a term called 'flat plate equivalent'. Panel output will follow a curve over the day, spanning as much time as there is sun overhead. Squash this all down, and the equivalent is 5 hours at 100%. The panels generate 'something' for many more hours. 40% of 100 watts is 40 watt-hours, 40 watt-hours x 8 hours = 320 watt-hours. If the noon peak (2 hours) is essentially 100 watts, then one gets 520 watt-hours, at least theoretically.

Okay, this is something I didn't know. Thanks for the explanation. 

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23 hours ago, ronwagn said:

"Fossil fuels" may cost more than they should if renewables are forced on the people in any given country. You can already see it in Europe and Canada. To a lesser extent in some states such as California and New York. New England is paying higher prices because of lack of pipelines for natural gas due to New York's policies.

It’s more complicated than that. Them Europeans are afraid of nuclear power and started switching to renewables to early unless you share that same fear. Just a few years ago before fracking Europe and much of the world paid 8-15 for nat gas, now of course is less than half of that. Under those circumstances renewables looked ok. Then we have Russia and the threat of holding back supply in winter playing politics. Another reason to bite that bullet and go renewable. Lastly just generally speaking there has not been to many blackouts for lack of wind and sun. Mainly there is just fear. As countries or states approach 40% saturation maybe those fears will be realized or other solutions implemented. 
Each area has its own story and potential for renewables. Texas for example has Nat gas cheap and close for backup so batteries may take a back seat. If your Arizona you may see more solar than anything. The backup in one area may be wind, anouther area, nat gas. 
Finally there may be a green president spending money on a national grid that will mitigate surges in renewable supply along with millions of electric cars providing backup changing the dynamics of everything.

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On YouTube there was a video of clear glass containing solar. Maybe panels will go obsolete as every building window could generate power. Never underestimate tech.

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3 hours ago, Boat said:

On YouTube there was a video of clear glass containing solar. Maybe panels will go obsolete as every building window could generate power. Never underestimate tech.

That has been around for a while, still expensive as all getout. 

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6 hours ago, KeyboardWarrior said:

Wonder if an installed Watt really produces 1.8 kW/h per year. 

Edit: So 1 installed Watt with a 25% capacity factor times 5 hours times 365 days. If this is correct, then it should be 638 Watt hours. Is this wrong? 

https://www.irena.org/-/media/Files/IRENA/Agency/Publication/2019/May/IRENA_Renewable-Power-Generations-Costs-in-2018.pdf Page 20.

I gave you a 5% boost too. 

If these numbers are correct, then the payoff is truly awful, and we can alienate even more industries as a result. 

The advancement in PV solar and Wind, at least onshore, is really looking good on this IRENA chart. They project $0.045/KWh for onshore wind and $0.048 for solar for this year based on contract bids at auction. The chart also shows the severe penalty you paid for getting into solar too early, particularly if you have your own domestic FF supply. (Germany). 

What surprises me is that offshore wind remains so expensive. The most powerful wind corridors are just offshore in N. Europe, W. Australia, New England, Between Japan and Korea, etc. I am surprised the offshore construction has not been cut down in cost yet. I am aware of a new floating platform method for offshore wind that avoids the need to build out from the sea bed, you only need to build the anchors.underwater. I would have thought that would have already been tried over a decade ago.  I wonder what the holdup was. 

At those costs, you are better off adding on renewable capacity to existing FF systems just to save on fuel costs while the wind or sun are available. 

IRENA report 2019 cost of new installations of renewable electricity..gif

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15 hours ago, Ward Smith said:

As usual Mr @0R0 I'm impressed with your insight. I'm sorry you're too deep for @BLAbut please continue. I can't believe you're an economist because they're inevitably wrong from consuming so much of their own bull shiff. You seem to have a clear eyed view of what's happening, which I for one appreciate. 

Elsewhere I started a thread about economics but I don't think you came by to visit. We're in alignment on this but I can see how others, swallowing the usual BS they've been fed can't see this particular Forest for the trees. 

As for prices, recalculate today's oil prices accounting for inflation, and in 1960's money we're about the same, roughly $2.50 a barrel. The contribution of fossil fuel to the world's economy is about 25%, but the benefit to the fossil fuel industry is peanuts. It's like farmers barely staying solvent to produce wheat for $2/bushel while a loaf of bread goes for $5. The goods and services made possible by fossil fuels has multiple multiplier effects on the world economy. 

Thanks

Where is your Economics discussion forum? spent a few minutes looking and didn't find it. 

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8 hours ago, KeyboardWarrior said:

To make enough hydrogen from electrolysis for a ton of ammonia still requires 17 MW/h at 80% efficiency. That puts you at a cost of  $850 per ton before the gas even reaches the reactor. I'm aware of a number of experiments and ideas for ammonia synthesis at room temperature, and they're a very long ways from being practical. They need to be more efficient, scaled up, and a lot less expensive. 

Chemical producers can't justify making a solar farm on site. It's far too expensive, and if the power company builds it, we're back to the prior problem where the energy cost far exceeds the current price with profit. A renewable ammonia plant rated at 1000 tons per day will require 600 MW continuously regardless of how efficient the reaction proceeds because of hydrogen production. It's still a nightmare. 

 

I've seen hydrogen generation at 96% efficiency, although I'll have to root around a bit to find the reference. However, your assertion starts with the idea that hydrogen is separated first, and then combined with nitrogen. The ammonia generators that run at room temperature and atmospheric pressure have water and nitrogen as their inputs - the catalysts reduce water and release ammonia and oxygen in one step.

Ammonia production is definitely energy intensive. If a panel generates 200 watts per square meter (assuming 20% efficiency), 17 megawatts is going to cover 8.5 square kilometers or 3 square miles. However, that ammonia then goes onto farmland, which covers millions of square miles. Nitrogen fixation by natural means is in the .2% efficiency range. Using solar power is 100 times as efficient in terms of land use.

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4 hours ago, Meredith Poor said:

I've seen hydrogen generation at 96% efficiency, although I'll have to root around a bit to find the reference. However, your assertion starts with the idea that hydrogen is separated first, and then combined with nitrogen. The ammonia generators that run at room temperature and atmospheric pressure have water and nitrogen as their inputs - the catalysts reduce water and release ammonia and oxygen in one step.

Ammonia production is definitely energy intensive. If a panel generates 200 watts per square meter (assuming 20% efficiency), 17 megawatts is going to cover 8.5 square kilometers or 3 square miles. However, that ammonia then goes onto farmland, which covers millions of square miles. Nitrogen fixation by natural means is in the .2% efficiency range. Using solar power is 100 times as efficient in terms of land use.

Regardless of how you go about the process, the amount of energy to take the hydrogen from water is the same, and at 100% efficiency you're still going to consume 14 MW/h to make hydrogen for one ton of ammonia (one ton doesn't cover millions of square miles). Remember to also multiply your power requirement by 44 in order to obtain necessary production figures for one hour. 

Let's say you somehow reduce the power requirement to 10 MW/h (which is thermodynamically impossible if you're producing hydrogen from water). At five cents per kilowatt hour, you're still spending $500 per ton on energy alone.

I believe I am still in the position to say that it's economically impossible to produce ammonia from solar power, even if production was 100% efficient. Current prices and power outputs of solar panels prevent this from being industrially viable. 

Remember, this also applies to a number of other industries. Chloro-alkali, cement, paper, and steel are your major impossibilities at the moment. 

Edited by KeyboardWarrior
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8 hours ago, 0R0 said:

That has been around for a while, still expensive as all getout. 

A student at the college I'm attending next year invented these. Or maybe he invented a variant. Not sure, but yea they're not very useful. 

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3 minutes ago, KeyboardWarrior said:

Regardless of how you go about the process, the amount of energy to take the hydrogen from water is the same, and at 100% efficiency you're still going to consume 14 MW/h to make hydrogen for one ton of ammonia (one ton doesn't cover millions of square miles). Remember to also multiply your power requirement by 44 in order to obtain necessary production figures for one hour. 

Let's say you somehow reduce the power requirement to 10 MW/h (which is thermodynamically impossible if you're producing hydrogen from water). At five cents per kilowatt hour, you're still spending $500 per ton on energy alone.

I believe I am still in the position to say that it's economically impossible to produce ammonia from solar power, even if production was 100% efficient. Current prices and power outputs of solar panels prevent this from being industrially viable. 

Remember, this also applies to a number of other industries. Chloro-alkali, cement, paper, and steel are your major impossibilities at the moment. 

I've attached an example of what happens during certain wind conditions in the Ercot service area. Ammonia production would be a 'shunt load' - only run when power prices are 'negative'. Renewable energy will have to be overbuilt in order to meet minimum demand requirements - this is already true in the conventional plants since they rarely run at 100% capacity. Essentially, if someone is paying you to take their power, then you can sop it up with large loads - however if you're producing something of value that uses all that power you'll still pay for it, but it might be as cheap as 1 penny per Kwh, or even less.

Again, you're working from the 5 cents per watt assumption, and this wouldn't be viable. Commodity manufacturers always situate their production sites at the absolute cheapest location possible. The lowest installed solar quote has a levelized cost of 1.7 cents per Kwh. However, an ammonia producer would simply shut off their plant when conditions weren't favorable, so there's no levelization. One of the other issues with ammonia is transportation - if a farmer can produce it on site from solar and wind on their farm transportation isn't necessary.

ERCOTRealTime20180411TooCheepToMeter.png

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3 hours ago, Meredith Poor said:

I've attached an example of what happens during certain wind conditions in the Ercot service area. Ammonia production would be a 'shunt load' - only run when power prices are 'negative'. Renewable energy will have to be overbuilt in order to meet minimum demand requirements - this is already true in the conventional plants since they rarely run at 100% capacity. Essentially, if someone is paying you to take their power, then you can sop it up with large loads - however if you're producing something of value that uses all that power you'll still pay for it, but it might be as cheap as 1 penny per Kwh, or even less.

Again, you're working from the 5 cents per watt assumption, and this wouldn't be viable. Commodity manufacturers always situate their production sites at the absolute cheapest location possible. The lowest installed solar quote has a levelized cost of 1.7 cents per Kwh. However, an ammonia producer would simply shut off their plant when conditions weren't favorable, so there's no levelization. One of the other issues with ammonia is transportation - if a farmer can produce it on site from solar and wind on their farm transportation isn't necessary.

 

 Natural gas at $3 per thousand cubic feet will cost you about $100 per ton of ammonia, since the current process consumes 33 million btu/ton. 

    With that in mind, here's the necessary electric rate to be competitive with gas at three dollars: $7 per MW/h. This equates to .007 dollars per kilowatt hour. Can you do this with solar? (Calculation done with 14 MW/h needed to obtain hydrogen at 100% efficiency, and with no regards to any additional energy required in synthesis).

I am not at all interested in shutting off my plant or throttling it back unless I can make up for lost production by expanding hourly capacity. This will in turn draw more power from solar or wind. I am also not interested in small scale ammonia. Changing the scale or localizing production doesn't change the base production energy cost (which is what the whole conversation has been about). A farmer will not be able to cover the necessary cost for making his own fertilizer (I spend part of my life as a rancher, and I can guarantee that my neighbors are not at all interested in installing a megawatt of solar to cover their yearly fertilizer use). 

Due to some complaints by Otis, I'm going to list some things here to clear up any misconceptions:

-Fixed a labeling issue with the ".007"

-My interest pertains to whether or not I'm going to make money, not that I'm just plain uninterested

-Some farmers (at least the ones that farm more than 500 acres) can "afford" their own fertilizer systems, but my arguments in regards to electric costs, either by building solar or by buying electric power, have demonstrated that this definitely isn't worth it. 

Edited by KeyboardWarrior

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12 hours ago, 0R0 said:

 

At those costs, you are better off adding on renewable capacity to existing FF systems just to save on fuel costs while the wind or sun are available. 

IRENA report 2019 cost of new installations of renewable electricity..gif

Sure, give me $.007 per kWh and I can  almost save on fuel. 

The only option is nuclear, but I’ll discuss that later. 

Edited by KeyboardWarrior

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16 hours ago, KeyboardWarrior said:

Paper needs about 3 MW/h per ton. If the industrial rate is 5 cents per kW/h, then we'll spend $50 on electric power from a renewable source. Paper sells for an average of $10 a ton. 

First MW/h isn't a unit. MW is a unit of power. MWhs is a unit of energy. Not saying this to be mean, but knowing the difference is important in these discussions. (Same with kW/h)

Second, something is off about your math or I'm misinderstanding... if 5 c/kWh means you spend $50 on power per ton, $10/ton means they'd be getting their power for 1 c/kWh? Or they're pulling energy from another source cheaper or more efficiently?

15 hours ago, KeyboardWarrior said:

Wonder if an installed Watt really produces 1.8 kW/h per year. 

Edit: So 1 installed Watt with a 25% capacity factor times 5 hours times 365 days. If this is correct, then it should be 638 Watt hours. Is this wrong? 

https://www.irena.org/-/media/Files/IRENA/Agency/Publication/2019/May/IRENA_Renewable-Power-Generations-Costs-in-2018.pdf Page 20.

I gave you a 5% boost too. 

If these numbers are correct, then the payoff is truly awful, and we can alienate even more industries as a result. 

You're double counting your capacity factor. The 5 hours of solar noon equivalent is the capacity factor of solar panels (20.8% if that's the solar radiance for that location). Using the 25% CF too is making your power 4x what it should be.

Solar is roughly 2-5 c/kWh in the vast majority of locations. That includes degradation over time and cost of capital. 

14 hours ago, KeyboardWarrior said:

Chemical producers can't justify making a solar farm on site. It's far too expensive, and if the power company builds it, we're back to the prior problem where the energy cost far exceeds the current price with profit. A renewable ammonia plant rated at 1000 tons per day will require 600 MW continuously regardless of how efficient the reaction proceeds because of hydrogen production. It's still a nightmare. 

 

Sure they can! They can get a loan (take out leverage - because theres collateral even small companies can get decently low rates) or invest their own money and get a standard return on it. It all depends what their financial situation is. (And by that I dont mean if they have the money, but rather if that is the highest risk-adjusted returns opportunity which they can apply it to.)

In most places we (my company) buy power from the grid, but we have solar farms in some areas because it was economical...

59 minutes ago, KeyboardWarrior said:

Regardless of how you go about the process, the amount of energy to take the hydrogen from water is the same, and at 100% efficiency you're still going to consume 14 MW/h to make hydrogen for one ton of ammonia (one ton doesn't cover millions of square miles). Remember to also multiply your power requirement by 44 in order to obtain necessary production figures for one hour. 

Let's say you somehow reduce the power requirement to 10 MW/h (which is thermodynamically impossible if you're producing hydrogen from water). At five cents per kilowatt hour, you're still spending $500 per ton on energy alone.

I believe I am still in the position to say that it's economically impossible to produce ammonia from solar power, even if production was 100% efficient. Current prices and power outputs of solar panels prevent this from being industrially viable. 

Remember, this also applies to a number of other industries. Chloro-alkali, cement, paper, and steel are your major impossibilities at the moment. 

Where does this 44 number come from? I dont follow.

Also, it's probably more accurate to say 'current prices of electricity prevent this from being economical' as nothing in your argument is unique to solar. Solar is 2-5 c/kWh,  wind is similar, old coal is 1-4... most other things are more. Lazard has a great paper on the LCOE every quarter.

25 minutes ago, KeyboardWarrior said:

 Natural gas at $3 per thousand cubic feet will cost you about $100 per ton of ammonia, since the current process consumes 33 million btu/ton. 

    With that in mind, here's the necessary electric rate to be competitive with gas at three dollars: $7 per MW/h. This equates to .007 cents per kilowatt hour. Can you do this with solar? (Calculation done with 14 MW/h needed to obtain hydrogen at 100% efficiency, and with no regards to any additional energy required in synthesis).

I am not at all interested in shutting off my plant or throttling it back unless I can make up for lost production by expanding hourly capacity. This will in turn draw more power from solar or wind. I am also not interested in small scale ammonia. Changing the scale or localizing production doesn't change the base production energy cost (which is what the whole conversation has been about).

A farmer will not be able to cover the necessary cost for making his own fertilizer (I spend part of my life as a rancher, and I can guarantee that my neighbors are not at all interested in installing a megawatt of solar to cover their yearly fertilizer use). 

 

That's 0.007 DOLLARS per kWh, or 0.7c/kWh. 

Honestly, and as nicely as possible, the customer of the commodity and the economy at large couldn't care less about what you're interested in. It's all about economics.

If the capital cost of the facility is low compared to the power costs to operate, ramping production according to cheap power will produce a cheaper product and generate higher returns for the producer. (This will happen. It may be amine, it may be something else, I have no idea, but power price differentials are likely to grow and someone will figure out a way to leverage that to their advantage... actually, they already do. Some of my facilities only operate during certain hours because that's how their most economical)

Also, customers don't care about the cost of production, they care about the price they have to pay... which includes cost of transportation. So while that may not be your interest, that's the thing that the economy will pay to have optimized. (Aligning your interests with the market is a recipie for success... trying to pursue your interests despite the market is a recipie for frustration. Some still succeed, but it's really frustrating to not see correlation between milestones and commercial results. Trust me.)

And what makes you think that? Most of the farmers I know - while they still drive old work trucks - are worth tens of millions. Some hundreds. They don't show it, but that farming equipment alone is typically $10+ million (unless that have loans on it... but most farmers are oldschool and pay cash for things). They could absolutely afford a small scale amine unit if the economics drove it. And even if not, what's to stop some enterprising person to buy it, build it on their land under an agreement, and sell them the fertilizer for lower cost that other production methods?

Also - this doesnt have to be powered by on site solar. Many farms have massive electrical connections for grain dryers which are only used after harvest (when you dont need to be producing fertilizer at the same time as you'd only need that preharvest).

Just a bit of perspective. Wish you the best in your studies!

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1 hour ago, Otis11 said:

First MW/h isn't a unit. MW is a unit of power. MWhs is a unit of energy. Not saying this to be mean, but knowing the difference is important in these discussions. (Same with kW/h)

I understand what a watt hour is. I've been using the wrong label, and nobody has corrected me in the last two discussions.

1 hour ago, Otis11 said:

Second, something is off about your math or I'm misinderstanding... if 5 c/kWh means you spend $50 on power per ton, $10/ton means they'd be getting their power for 1 c/kWh? Or they're pulling energy from another source cheaper or more efficiently

That's correct. The paper industry burns byproducts and fossil fuels on site to obtain their energy. The math is fine. 

 

1 hour ago, Otis11 said:

Solar is roughly 2-5 c/kWh in the vast majority of locations. That includes degradation over time and cost of capital. 

This certainly won't help when I get back to the numbers for ammonia plants. 

1 hour ago, Otis11 said:

Sure they can! They can get a loan (take out leverage - because theres collateral even small companies can get decently low rates) or invest their own money and get a standard return on it. It all depends what their financial situation is. (And by that I dont mean if they have the money, but rather if that is the highest risk-adjusted returns opportunity which they can apply it to.)

In most places we (my company) buy power from the grid, but we have solar farms in some areas because it was economical...

The investment necessary for an ammonia company to build their own solar power supply is far too high. Even at $1 per Watt we're still looking at a near billion dollar additional investment. Not only would you at least double your initial capital cost, but you would double your time to pay it off since you've now got $1 billion dollars in solar installed with the $800 million dollar plant.

However, it gets worse. Not only is there the added strain of paying for the panels after the plant becomes operational, but the true value of the panels comes in fuel savings; and since the cost of gas is so low compared to buying electricity or installing solar, you're looking at many years before the solar panels have positive cash flow. 

1 hour ago, Otis11 said:

Where does this 44 number come from? I dont follow.

44 tons per hour equates to your standard 1000 tons per day plant. 

 

1 hour ago, Otis11 said:

Also, it's probably more accurate to say 'current prices of electricity prevent this from being economical' as nothing in your argument is unique to solar. Solar is 2-5 c/kWh,  wind is similar, old coal is 1-4... most other things are more. Lazard has a great paper on the LCOE every quarter.

That's right, but the discussion is on whether or not we can switch from burning fossil fuels on site. With the current electric rates, we're stuck with something impossible to overcome. 

1 hour ago, Otis11 said:

That's 0.007 DOLLARS per kWh, or 0.7c/kWh. 

Honestly, and as nicely as possible, the customer of the commodity and the economy at large couldn't care less about what you're interested in. It's all about economics.

Just a mislabel. Sorry about that... 

As for my interests, I thought it was obvious that I'm not interested BECAUSE of the economics. I'm not going to make any money with this system. That's why I'm not interested.

1 hour ago, Otis11 said:

If the capital cost of the facility is low compared to the power costs to operate, ramping production according to cheap power will produce a cheaper product and generate higher returns for the producer.

The operating cost can only be low if you can supply that ridiculous electrical price I mislabeled. It's still 30% than one penny. 

 

1 hour ago, Otis11 said:

And what makes you think that? Most of the farmers I know - while they still drive old work trucks - are worth tens of millions. Some hundreds. They don't show it, but that farming equipment alone is typically $10+ million (unless that have loans on it... but most farmers are oldschool and pay cash for things). They could absolutely afford a small scale amine unit if the economics drove it. And even if not, what's to stop some enterprising person to buy it, build it on their land under an agreement, and sell them the fertilizer for lower cost that other production methods?

Would you calculate how much installed solar they would need to do this, and then tell me how long it will take for them to get their money back through fertilizer savings and sales? If I do it you probably wouldn't believe me. If the power cost isn't below $.007 per kWh, they shouldn't invest in this. 

 

1 hour ago, Otis11 said:

Also - this doesnt have to be powered by on site solar. Many farms have massive electrical connections for grain dryers which are only used after harvest (when you dont need to be producing fertilizer at the same time as you'd only need that preharvest).

Doesn't matter, I've already demonstrated that they'll need less than one cent per kWh to make this work. How much does the system cost anyways? 

Edited by KeyboardWarrior
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By the way @Otis11, if you question my numbers on renewable ammonia, I'll put them here, and I'll give the renewable system 100% efficiency. Just let me know. 

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(edited)

1 hour ago, KeyboardWarrior said:

The investment necessary for an ammonia company to build their own solar power supply is far too high. Even at $1 per Watt we're still looking at a near billion dollar additional investment. Not only would you at least double your initial capital cost, but you would double your time to pay it off since you've now got $1 billion dollars in solar installed with the $800 million dollar plant.

However, it gets worse. Not only is there the added strain of paying for the panels after the plant becomes operational, but the true value of the panels comes in fuel savings; and since the cost of gas is so low compared to buying electricity or installing solar, you're looking at many years before the solar panels have positive cash flow. 

44 tons per hour equates to your standard 1000 tons per day plant. 

 

That's right, but the discussion is on whether or not we can switch from burning fossil fuels on site. With the current electric rates, we're stuck with something impossible to overcome. 

Just a mislabel. Sorry about that... 

As for my interests, I thought it was obvious that I'm not interested BECAUSE of the economics. I'm not going to make any money with this system. That's why I'm not interested.

The operating cost can only be low if you can supply that ridiculous electrical price I mislabeled. It's still 30% than one penny. 

 

Would you calculate how much installed solar they would need to do this, and then tell me how long it will take for them to get their money back through fertilizer savings and sales? If I do it you probably wouldn't believe me. If the power cost isn't below $.007 per kWh, they shouldn't invest in this. 

 

Doesn't matter, I've already demonstrated that they'll need less than one cent per kWh to make this work. How much does the system cost anyways? 

See, saying the investment is too high is a red flag to me that whoever is telling me that the person doesnt actually understand. (I deal with this on a daily basis when I, myself, have money on the line). If it costs an extra billion on a $800 M dollar plant - ok, no worries - what's the ROI? What's the DPI? How does this aid or hinder our primary business? How does it relate to our core competencies... you get the point.

You may very well be right that it does not make sense, but the reason isnt because the 'investment necessary... is too high'.

 

'Something impossible to overcome' - heh! That's my specialty. Seriously, the number of times I've been told 'that's impossible' is amusing. Often it is impossible in that person's current mindset and with their expected approach, but if we examine their assumptions we can often find another path.

 

But your comment was that you're not interested in overbuilding the size of a facility and ramping up/down based on power prices... that may be the very thing that makes it economic. (Not sure, haven't run the math myself and not terribly familiar with the process at hand)

 

And you need to be less than 1c/key by your calculations and using your assumptions. What if we burn excess biomass as done, and use FF for heat when needed, but use electricity where we can to offset FF use? Is there another process we could use to harness more electricity economically? Could different catalysts be used or even another process entirely?

 

Again, I'm not saying any of your conclusions are wrong, but your statements are pretty absolute in a world that is almost never absolute.

1 hour ago, KeyboardWarrior said:

By the way @Otis11, if you question my numbers on renewable ammonia, I'll put them here, and I'll give the renewable system 100% efficiency. Just let me know. 

No worries - I'm not challenging your conclusions, but rather your statement of them. 

For reference I work in optimization. My original training was in Electrical Engineering and Computer Science, but I also have training and experience in business, law, chemistry, biology, and a few others. Worked in defense, tech, service, and energy (including both renewable and convensional) as well as for a few startups. I've seen laws of physics broken and literally rewritten (not by myself, but been fortunate to work with some incredible people). Just if that gives you any better understanding of why I push back on absolutes and 'impossibilities 

Off for a while! Best wishes!

Edited by Otis11
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3 hours ago, KeyboardWarrior said:

 Natural gas at $3 per thousand cubic feet will cost you about $100 per ton of ammonia, since the current process consumes 33 million btu/ton. 

    With that in mind, here's the necessary electric rate to be competitive with gas at three dollars: $7 per MW/h. This equates to .007 dollars per kilowatt hour. Can you do this with solar? (Calculation done with 14 MW/h needed to obtain hydrogen at 100% efficiency, and with no regards to any additional energy required in synthesis).

I am not at all interested in shutting off my plant or throttling it back unless I can make up for lost production by expanding hourly capacity. This will in turn draw more power from solar or wind. I am also not interested in small scale ammonia. Changing the scale or localizing production doesn't change the base production energy cost (which is what the whole conversation has been about). A farmer will not be able to cover the necessary cost for making his own fertilizer (I spend part of my life as a rancher, and I can guarantee that my neighbors are not at all interested in installing a megawatt of solar to cover their yearly fertilizer use). 

Due to some complaints by Otis, I'm going to list some things here to clear up any misconceptions:

-Fixed a labeling issue with the ".007"

-My interest pertains to whether or not I'm going to make money, not that I'm just plain uninterested

-Some farmers (at least the ones that farm more than 500 acres) can "afford" their own fertilizer systems, but my arguments in regards to electric costs, either by building solar or by buying electric power, have demonstrated that this definitely isn't worth it. 

Part one of this has to do with sources of natural gas. A lot of natural gas/methane is formed from decaying plant matter, whether in swamps, landfills, or animal stomachs. There are also methane seeps in various parts of the world that are venting methane into the air, some being on land and some underwater. I don't see any problem these sources as a feedstock for hydrogen/ammonia production. Methane will always be with us.

Part two has to do with electricity prices. The gist of your arguments tend towards commercial scale, always-on production. Your calculations are based on the idea that someone runs a plant 24/7 based on a contract from a third party power provider. This is not the way a lot of large scale operations run - low rates are often offered in exchange for peak cutoffs, so if the power grid nears saturation the transmission provider can shut down various bulk users.

Within that context, many large scale plants are 'cogenerators', meaning that they generate their own power and sell their excess to the grid. This arrangement guarantees both power reliability and rock bottom cost - factories aren't subject to PUC rate structures. In any case, there are various reasons plants shut off - feedstock shortages, maintenance, weather, labor disturbances, holidays, and of course market conditions where operating the plant is uneconomical.

Nitrogen fixation is as old as plant life. Nature is far more efficient at producing nitrates than Haber-Bosch, since the grass in your yard doesn't depend on some process that runs at 300 atmospheres of pressure. As more and more is learned about how nitrogen chemistry works, means will be developed to produce ammonia directly from sunlight with catalysts, skipping the solar power phase entirely.

What 'you're interested in' is only tangentially important in all this Fertilizer value in places the the Philippines or Japan is different from the 'lower 48 in the US' since we have natural gas supplies and they don't. Island nations don't have vast areas of land that can be consolidated into large farms.

As far as to when and if power prices will drop to .7 cents per Kwh, I am predicting that solar cells will be priced at one penny per watt by 2025. Right now the cheapest one I'm seeing advertised is about 7 cents per watt. .7 cents per Kwh x 1.8 (Kwh per year) x 7 (years) = 8 cents per watt. I'm seeing solar cells priced at 7 cents per watt now. This is not the price of panels, and not the price of panels installed into a working farm.The cost of solar would have to come down one order of magnitude. It might take roughly ten years for that to happen.

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34 minutes ago, Otis11 said:

See, saying the investment is too high is a red flag to me that whoever is telling me that the person doesnt actually understand. (I deal with this on a daily basis when I, myself, have money on the line). If it costs an extra billion on a $800 M dollar plant - ok, no worries - what's the ROI? What's the DPI? How does this aid or hinder our primary business? How does it relate to our core competencies... you get the point.

You may very well be right that it does not make sense, but the reason isnt because the 'investment necessary... is too high'.

Right. I need to demonstrate why I think that the ROI isn't sufficient for the installation, or do a calculation based on some scenario. If the percent return is high, an extreme startup capital can be justified. 

37 minutes ago, Otis11 said:

'Something impossible to overcome' - heh! That's my specialty. Seriously, the number of times I've been told 'that's impossible' is amusing. Often it is impossible in that person's current mindset and with their expected approach, but if we examine their assumptions we can often find another path.

Yeah, I shouldn't be so certain. The correct position is "As of now, I am not at all convinced that this is a practical approach to the problem. However, I understand that advancements in technology may one day make it feasible". And I will take this position.

38 minutes ago, Otis11 said:

But your comment was that you're not interested in overbuilding the size of a facility and ramping up/down based on power prices... that may be the very thing that makes it economic. (Not sure, haven't run the math myself and not terribly familiar with the process at hand)

Which goes back to the first statement of yours. I need to demonstrate why the ROI isn't sufficient to justify an overbuild. 

39 minutes ago, Otis11 said:

And you need to be less than 1c/key by your calculations and using your assumptions. What if we burn excess biomass as done, and use FF for heat when needed, but use electricity where we can to offset FF use? Is there another process we could use to harness more electricity economically? Could different catalysts be used or even another process entirely?

These could show some good results, depending on the yields. 

At this point I'll need all kinds of information and numbers if I care that much about dissing solar; but I really don't. In fact, generally the burden of proof goes to those who claim that we need these new systems, so it shouldn't be necessary for me to offer proof of why it doesn't work. 

Overall, I'm content with waiting another ten years to see where things go. In the meantime, when I reach college I'll be searching for a way to electrify steps of the haber-bosch process where it makes sense. (different from going full electric, where hydrogen would be produced from water and creating the energy demand I've been talking about). I'm interested in this not because of climate change, but because it would be nice to not rely on a finite material forever. I simultaneously hope that nuclear will become the dominant source of cheap power, but that's a whole different discussion. 

 

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