Abstract Microgrids provide a new energy paradigm with the benefits of higher energy supply reliability, lower greenhouse gas (GHG) emissions through a higher penetration of renewable sources, higher energy efficiencies through the use of local waste heat and the avoidance of losses in transmission and distribution. This study reports a life cycle assessment (LCA) of microgrids for an industry application of an ammonia plant in central Inner Mongolia, China. The life cycle energy use and GHG emissions of the microgrids are evaluated and compared to the existing fossil fuel-based energy system. The electricity, heat and hydrogen fuel loads of the ammonia plant are all modelled in the study. An optimization model is developed to estimate the minimum life cycle energy use and GHG emissions with the microgrids under three scenarios (natural gas (NG)-based, optimized, and maximum renewable energy microgrids). The results indicate that the use of wind and solar in the NG-based microgrid can only slightly reduce the energy use and GHG emissions. If there are no land area limitations on the deployment of solar and wind power, the maximum renewable energy microgrid offers significant reductions of fossil fuel energy of up to 56.9% and GHG emissions reductions of up to 66.3% compared to the existing energy system.

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