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Evaluation of Green Hydrogen and ammonia with IRA

Canigou evaluates the production of green hydrogen and green ammonia from solar in Colorado.

18 Mar 2023

United States

The Canigou Sun Bear project, situated in Colorado, will be a 1-5GW solar farm connected to the national grid. We are currently evaluating if this project could be linked to a green hydrogen project using electricity produced by the solar panels to power electrolysis. The hydrogen produced could then be used in multiple ways, either as a gas or to be converted into ammonia to then be used as ammonia as a feedstock or to be transported as ammonia but then cracked back into hydrogen.

Hydrogen production is commonly done using steam methane reforming (SMR) which is a process in which methane from natural gas is heated, with steam, usually with a catalyst, to produce hydrogen and carbon monoxide. This process has a high carbon emission and uses fossil fuels and forms “Grey” hydrogen.


To make green hydrogen instead of using SMR, hydrogen is made from water using electrolysis. This process splits water molecules into hydrogen and oxygen molecules through the application of an electric current. The electrolysis process is then powered by renewable energy sources such as solar, wind, hydro power, and geothermal. Most green hydrogen is produced using a combination of these technologies in order to power the electrolysis all year round. Green hydrogen production is also a way to use excess renewable energy when the grid is saturated. The hydrogen produced through this process is considered to be “green” or “clean” because it does not produce any emissions or pollutants.



Hydrogen is used in many industries, as fuel in all the transport industries as well as space exploration. As a heat source in residential and commercial buildings. As a feedstock in the chemical industry, hydrogen is used to make ammonia is necessary for 50% of global fertilizers. In addition, green hydrogen is being used in the transportation sector, with some automakers already offering hydrogen-powered vehicles.


Why now?


With the global move towards renewable energy sources, many countries are investing heavily in green hydrogen in order to reduce their reliance on fossil fuels. The United States is no exception. The US government have just introduced the US inflation reduction Act (IRA) 2022, which has unlocked $370 billion in funding and tax credits to be awarded to qualified clean hydrogen projects and renewable energy projects being used to power them.


The law includes a breakthrough tax credit for “qualified clean hydrogen” which would pay producers up to $3 per kilogram of hydrogen from 2023 depending on the levels of lifecycle emissions and staff wages. And, a producer could choose an investment tax credit of up to 30% of the cost of the energy facility. The full tax credit of $0.60 per kg of hydrogen (multiplied by five if labour and wage standards are met) is available for hydrogen where greenhouse gas emissions are less than 0.45kg CO2e/kg hydrogen. Hydrogen produced with 0.45-1.5kg of emissions would receive 33.4% of the credit; with 25% for 1.5-2.5kg of CO2e; and 20% for 2.5-4kg. This is an exciting time for green hydrogen in the US. With increased investment and research, green hydrogen has the potential to become an integral part of the energy industry. By replacing fossil fuels with green hydrogen, the US can reduce its carbon footprint and move towards a more sustainable energy future.


The US have introduced the hydrogen hub system with the aim of having at least 10 clean energy hubs around the US. These hubs will be a collaboration of public and private entities to create a green hydrogen production line, using renewable energy as power in tapping into local hydrogen demand. In addition to the tax benefits the rising demand for green energy and hydrogen is creating a rise in research in hydrogen production technology. Currently there are multiple new electrolysers and catalysts being trialled which will increase efficiency and lower the cost of hydrogen production. Green hydrogen has the potential to create jobs and stimulate economic growth. As the demand for green hydrogen increases, the need for qualified workers will also grow. This could create thousands of new jobs in the US.

Canigou is also evaluating the production of green ammonia as second step to the Hydrogen production.

Ammonia (NH4) is a gas that is used in agriculture to provide the crops with nitrogen, as well as in the production of chemicals such as plastic.  However, 85% of ammonia produced worldwide is used in the agricultural sector as fertiliser, this is an essential part of the industry and ammonia is used in half of the global food production.  Yet ammonia production currently contributes to 1,8% of global carbon emissions (500 million tonnes of carbon dioxide).  This is due to using Steam Methane Reforming (SMR) to make 80% of the ammonia.  The need for ammonia is predicted to keep rising as the need for food supplies is increasing with the population rise.


It is possible to create green ammonia which is 100 percent carbon neutral. Green ammonia is made by powering the green hydrogen production, via electrolysis, using renewable energy sources.  Renewable energy is then used to power the Haber-Bosch process which binds nitrogen to hydrogen to create ammonia.  This process is highly efficient and can be used to produce large amounts of green ammonia.  In addition, green ammonia can be used for a variety of purposes, from industrial production to energy storage.  It can also be stored and used as an energy source, similar to the way batteries are used.  Using green ammonia would help decrease global carbon emissions as well as opening up the ammonia market for other applications.  It is also a lot easier to transport than hydrogen as it doesn’t need to be pressurized to the same level and due to its global applications in the agricultural sector there are already pre-existing ammonia transportation routes nationally and internationally.


This makes it an good candidate for renewable energy storage, being a much cleaner form of energy than traditional fossil fuels as it does not contribute directly to air pollution or global warming.  Along with it being cheaper to produce than conventional fuels, it makes an attractive option for many industries.  Green ammonia is becoming increasingly popular in the United States.  One example of this is in California, which has recently announced plans to produce green ammonia for use in the state.  This is part of the state’s goal to reduce greenhouse gas emissions and meet renewable energy goals.  Additionally, in the past three years, several companies have developed technologies to produce green ammonia from renewable sources such as solar and wind power.  These technologies have the potential to reduce the cost of producing green ammonia, making it even more attractive for industrial and energy storage applications.


Production of green ammonia goes easily alongside the production of green hydrogen, so at the Canigou Sun Bear suite we are also exploring the options of a green ammonia plant. This would also allow for the use of local fuel and fertilizer in the US instead of relying on other countries to provide it and will provide a boost in the local economy and help reduce carbon emissions further.


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