Green vs fossil-based energy vectors: A comparative techno-economic analysis of green ammonia and LNG value chains

Abstract

This study conducts a comparative techno-economic assessment on the value chains of ammonia, as a green energy vector, and Liquefied Natural Gas (LNG), representing the benchmark energy vector, for long-distance energy transportation from Middle East to Europe. The value chain involves production from resources, conversion to an energy vector, storage and transport and reconversion of the energy vector to a suitable fuel. For comparison purposes, an electric power output of 400 MW is assumed to be produced by a power plant that utilizes either green or fossil fuels delivered to it. The adopted parameter for this comparison is the Levelized Cost of Energy (LCoE). Greenhouse gas emissions are economically penalized through the Social Cost of Carbon (SCC). Considering a SCC of 0.100 €/kg, the LCoE of the LNG value chain is 59.19 €/MWh, while that of ammonia is 231.71 €/MWh. Since the cost of producing green hydrogen and purified natural gas strongly affects the results, a sensitivity analysis is performed to assess the impact of the assumed values. The SCC required to break even the LCoE of the two value chains is: 0.183 €/MWh when considering the most favorable scenario for the green energy vector (low green hydrogen and high purified natural gas production costs) and 1.731 €/kg when considering the most unfavorable one. This study highlights the cost-effectiveness of LNG in the current economic and regulatory landscape. However, the break-even range for the SCC indicates the potential for green ammonia to gain economic viability under higher carbon pricing scenarios.