Green ammonia to advance the energy transition in China

Abstract

This paper discusses the development of future green ammonia supply chains in China with the theory of complex system engineering, taking account of technical system, actors and institutions in future energy systems featured socio-technical systems as a whole. The energy condition in China identified features a spatial imbalance between renewable energy supply and demand, which cannot be fully addressed by the current power system-centric solution. This calls for hydrogen to make a concerted effort in the energy transition. By comparing major hydrogen delivery options, we argue that green ammonia can play a feasible role for large-scale energy distribution and long-term energy storage. The development of green ammonia supply chains and direct use of ammonia are proposed to avoid large uncertainties and initial investment in the early stage. The market creation will be key in the supply chain development. A long-term bilateral contract between buyer and seller and a joint investment in an integrated supply chain by several stakeholders are advised to share risks and ensure capital recovery. In addition, government participation is crucial in the early development phase by setting regulatory and financial institutions to support the market creation and supply chain development.