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UK fuel cell company AFC Energy targets $20 billion diesel genset market

Highlights

Alkaline technology good fit for ammonia

Ammonia denser, cheaper to transport

Construction, EV charge, maritime applications

AFC Energy is targeting the $20 billion diesel generator market with its alkaline fuel cell technology, capable of running on lower grades of hydrogen including from commercial ammonia, company CEO Adam Bond told S&P Global Platts on May 10.

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The UK company has international partnerships with ABB, Acciona, Altaaqa, Extreme E and now international constructor Mace Group, with applications of its technology focused on power generation using hydrogen cracked from ammonia on-site.

"The use cases for all of the biggest green or blue hydrogen projects today are focused on the production of ammonia", Bond said.

For AFC Energy this meant targeting the global diesel genset market across an array of off-grid applications.

"What is the best zero-emission alternative to diesel? Both methanol and ethanol have a carbon element. If you work your way through the list of liquid fuels in order of highest energy density to lowest, the highest without a carbon footprint is ammonia – for data centers, construction sites, shipping and high power EV charging," Bond said.

Ammonia is four times as energy dense as gaseous hydrogen in volumetric terms and can be liquefied at around minus 30 degrees versus hydrogen's minus 230 degrees.

"It also has a commoditized price. In short, the cost of moving ammonia around is a fraction of the cost of moving hydrogen around, making it an ideal fuel for offgrid power," Bond said.

Whilst AFC Energy's alkaline fuel cells can use hydrogen cracked from ammonia, the same fuel cannot be used in a PEM (proton exchange membrane) fuel cell unless the hydrogen is first subject to being ultra-purified at high cost, the CEO said.

"Alkaline chemistry differs from PEM in that it can accept low-grade hydrogen. By low-grade I mean down to sub-90% purity versus the 99.9%-plus PEM needs," he said.

Alkaline fuel cells can also operate with, or without, platinum group metals, making them cheaper to manufacture than PEM fuel cells, he added.

LARGE GREEN H2 PROJECTS DELIVERING AMMONIA

PROGRAM
LOCATION
POWER
PLANNED USE
H2 OUTPUT
Asian Renewable Energy Hub
Australia
14 GW
Green ammonia for export to Asia
1.75m tonnes/year
Helios Green Fuels
Saudi Arabia
4 GW
Green ammonia for transport around the world
0.24m tonnes/year (to produce 1.2m tonnes of green ammonia/year)
H2 Hub Gladstone
Australia
3 GW
Green ammonia for export to Japan and other countries
Developer says to produce "up to 5,000 tonnes of green ammonia per day"
HyEx
Chile
1.6 GW
Green ammonia, half of which will be used at Enaex's ammonium nitrate plant; the remainder will be targeted for fuel, green fertiliser and export markets
124,000 tonnes per year (700,000 tonnes of green ammonia)
Geraldton
Australia
1.5 GW
Production of green ammonia for domestic and export markets (derived from green hydrogen and captured CO2) for shipping and aviation
1m tonnes of green ammonia per year
Greater Copenhagen
Denmark
1.3 GW
Hydrogen for buses and trucks, e-fuel (derived from green hydrogen and captured CO2) for shipping and aviation
Not stated, but it would produce "250,000 tonnes of sustainable fuel" per year
Source: AFC Energy, Recharge

H2 vs ammonia

"Roughly two-thirds of the price of [fuel cell] electricity derives from your fuel. Anything that is more efficient or can accept a lower and cheaper grade of hydrogen will give you a preferential or lower energy price," Bond said.

Feedback on PEM fuel cells trialed on construction sites in the UK and Europe showed the fuel component of generation costs at between GBP1.40-1.50/kWh due to exorbitant hydrogen transportation costs.

"They could not make this work financially. What we're targeting is about 25 to 30 pence per kWh for ammonia – it's that big a difference. Fuel is the dominant factor, that is why the likes of Maersk are coming out and saying shipping will move to ammonia," he said.

The ammonia still has to be cracked on site by a small 'cracker' unit, but Bond said: "watch this space, maybe we'll be able to get rid of that at some point."

POTENTIAL ADVANTAGE OF USING AMMONIA VERSUS DIRECT HYDROGEN

Attribute
Unit
Ammonia
Hydrogen
Cost of fuel per kWh charge (target)
GBP/kWh
0.25
1.42
Transportation per tanker
GJ
503
132
Source: AFC Energy

EV charge challenge

Another emerging use case for fuel cells was on-site generation for electric vehicle charging, Bond said.

Electrification was beginning to place a strain on distribution grids as the number and size of EVs grew.

"We're starting to see diesel generators sitting behind a fence at service stations charging up EVs where the grid is not up to it. We're getting some traction with [rapid charger supplier] ABB and some other customers wanting to use fuel cells in EV hubs," he said.

Crucially, the fuel logistics were similar, with a service station, data center or construction site switching out diesel deliveries by truck for ammonia deliveries, he said.

"We're trying to mirror the logistics of the diesel market as best we can. A lot of people are worried about hydrogen, certainly on construction sites where space is an issue. Ammonia is less flammable, but it is toxic. I can't say it is perfect in every way but neither is diesel," Bond said.

Government strategy

AFC Energy's business case was not predicated on government policy per se, but a level playing would help, he said.

The UK reduction in subsidies on red diesel from next year, for instance, would go a long way to encourage the adoption of zero-emission technologies.

And while Bond was supportive of the upcoming UK hydrogen strategy, he was exercised by the lack of joined-up thinking in major infrastructure procurement.

"For the next two decades, diesel generators will be used to build an electrified track between London and Manchester. High Speed Rail 2 procurement should have mandatory carbon reduction profiles so contractors are forced to look at the displacement of diesel," he said.