The levelized cost of electricity (LCOE) for renewables like solar and wind becomes cheaper than continuing operations of existing coal plants. This paradigm shift indicates that even in markets with high solar and wind costs, like Japan, renewables have reached a point where they can outperform traditional coal-based power systems in terms of cost-efficiency.
Ammonia, produced from various hydrogen sources such as green, blue, or gray hydrogen, adds significantly to electricity costs when used alongside coal. This economic burden prompts the argument that if renewable energy infrastructure (specifically solar) can be built for less than it costs to operate a coal plant, enhancing coal plant expenses by integrating ammonia is not a prudent financial move.
Yet, the conversation does not end at Tipping Point 2. Despite the evident cost implications, government policies in countries like Japan and South Korea are still investing in ammonia co-firing for power plants. This decision is critiqued through an economic lens, suggesting that ammonia’s role might transition towards acting as a backup rather than a primary energy source, potentially filling the gap during periods when renewable sources underperform.
