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Creating the Holdings of Nuclear Power Plants and/or Renewable Energy Sources with Ammonia Production Plants on the Base of Circular Economy

Written By

Igor Volchyn, Danylo Cherevatskyi, Vitaliy Mokretskyy and Wlodzimierz Pzybylski

Submitted: 11 May 2023 Reviewed: 30 May 2023 Published: 24 June 2023

DOI: 10.5772/intechopen.1001957

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Nuclear Power Plants - New Insights

Nasser Sayed Awwad and Hamed Majdooa Algarni

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Abstract

The COP26 conference declared the end of the “coal” era in the economy. The coal thermal power plants (TPPs) are subject to closure. For many macroeconomics, this is a large energy and economic losses. But the fleet of coal-fired thermal power plants can be saved by switching to burning ammonia base fuel an instead of coal. Ammonia has a hydrogen content of 17.6% and an almost unlimited raw material base. The convenience and experience of transportation, storage, and processing of ammonia make it a promising source of energy storage. But ammonia produced using water hydrolysis is more expensive than coal as a fuel. The purpose of this study is to test the hypothesis that holdings based on the principles of the circular economy for nuclear power plants and/or renewable energy sources with ammonia production plants are able to ensure the operating costs of electricity production with low pollutant emission and zero carbon dioxide emission at the level of coal thermal power plants.

Keywords

  • nuclear power plant
  • circular economy
  • ammonia
  • combustion
  • thermal power plant
  • energy and chemical holding
  • economics

1. Introduction

Combating the global climate change and protecting the environment are becoming one of the main priorities in world politics, as confirmed by the decisions of the Rome G20 summit [1] and the 26th Conference of the Parties to the United Nations Framework Convention on Climate Change COP26 in Glasgow, UK [2], which took place in the fall of 2021. The COP26 conference declared the end of the “coal” era in the economy in the near future. Even new coal-fired thermal power plants (TPPs) with the best environmental performance are subject to closure. This can be a large energy and economic loss for many countries. For example, the installed electrical capacity of the Integrated Energy System of Ukraine is about 51 GW, and almost 54% of it is coal-fired thermal power plants. But the fleet of coal-fired thermal power plants can, in principle, kept in service if coal is replaced by carbon-free hydrogen-based fuel.

The energy systems, use hydrogen, although considered the most promising in the world [3], have major technical and economic problems due to the difficulty in its storing and transporting [4]. But this can be corrected by switching to the use of ammonia (NH3) as a hydrogen-containing fuel [5]. The Japanese power companies have already started implementing plans for a phased transition to burning ammonia in the coal-fired power generation [6]. Test combustion of ammonia with coal at an existing 1,000 MW power unit at Hekinan TPP confirmed the absence of significant negative impact on the unit itself [7] and that ammonia is able to act as an ecologically suitable substitute for coal [8].

High hydrogen content (0.176 kg of H2 per 1 kg of ammonia), an almost unlimited raw material base, convenience and extensive experience in transportation, storage, and processing, makes ammonia a promising energy carrier for thermal power plants.

But the problem is the high cost of “green” ammonia. According to the conventional classification, the ammonia can be “gray”—obtained from hydrogen using the technology of steam reforming of natural gas or coal and nitrogen from the air, “blue”—obtained on the basis of hydrogen using the technology of steam reforming of natural gas or coal with the application of carbon capture and storage technologies, “green”—on the basis of hydrogen obtained by electrolysis due to the electricity of renewable sources, and “yellow”—on the basis of hydrogen obtained using electricity produced at the nuclear power plants [9].

The ammonia used at the Mizushima TPP, Japan, was “blue.” It was produced by the state oil and gas company Saudi Aramco in Saudi Arabia. Green ammonia is projected to be available in many locations for less than USD 400/t in 2040, with the potential to decrease to below USD 300/t if water electrolysis costs are reduced [10]. At a price of 450 EUR/t, “green” ammonia produced in Chile using the Haber-Bosch synthesis technology can make even an investment project to export it by sea to Japan cost-effective [11]. However, prices in electricity markets are much lower than in fertilizer markets.

Thus, the problem of prolonging the operation of coal-fired power plants can be transferred from the ecological to the economic level: Ammonia produced by electrolysis is much more expensive than coal. But a drastic reduction in ammonia production costs is achievable if it is:

  1. “yellow” ammonia, that is, using electricity from nuclear power plants and

  2. produced on the basis of circular economy [12].

This determined the purpose of the research: to perform an analysis of the economic efficiency of investment projects for the creation of energy-chemical holdings, which include nuclear power plants and ammonia-fired thermal power plants.

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2. Study methods

The task of the research is to analyze the efficiency of the investment project—to check the ability of the annual cash flows from the holding’s activities to cover the capital investments due to the purchase of electrolyzers and other ammonia production equipment during the period of the project.

The value of total investment costs net present value (NPV) is determined by the formula [13]:

NPV=Inv+0TВtCt1+rtE1

where Inv is the investment amount; Bt is total revenues for year t; Ct is total costs for year t; t is the corresponding year of the project; Т is the full term of project implementation; r is the discount rate (unit fraction).

An investment project is considered profitable for the investor if NPV ≥ 0.

The difference between the total annual income Bt and expenses Ct is the annual cash flow of the project—cash flow (СFt):

CFt=BtCt,E2

With “amortizing” repayment of credit resources, the payments are made in equal amounts regularly and they include a certain part of the loan amount and interest. Along with the last installment, the loan amount is repaid. The specified approach can serve as a justification for the assumption of equality of annual cash flows (annuities) for the project. In this case, the break-even condition of the project corresponds to the value of a certain break-even annuity

CFNPV=o=Inv0T11+rt.E3

That is, any excess of the current annual cash flow of the annuity, determined by the given volume of investments and the rate of the cost of capital according to formula (3), will ensure the break-even of the project

CFt>CFNPV=o.E4

The annual cash flow CFt, million EUR or MEUR, at a thermal power plant, where electricity is obtained by burning fuel, is calculated on the basis of the volume of electricity released into the network, E, GWh, according to the formula

CFt=p×1wp×E103E5

where p is the electricity price, EUR/MWh; w is the cost of generating electricity at the TPP, EUR/MWh.

The application of the production function allows you to link the amount of electricity released into the network from the TPP with fuel consumption. It can be described with great reliability by logarithmic dependencies [14] of the type:

E=LlnF+M,E6

where E is the annual volume of electricity released from the thermal power, GWh; L, M are the function coefficients; F is the annual volume of fuel used, kt of coal equivalent.

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3. Study results and their discussion

Obtaining the “green” or “yellow” ammonia using the Haber-Bosch process is energy-intensive: In the article [15], for example, authors are talking about a specific energy consumption of 10.43 kWh/kg NH3. It is impossible to radically reduce this indicator on the existing technological basis, although the freedom of maneuver remains. Thus, the nuclear power plants are usually unsuitable for deep regulation of power generation operating modes. Therefore, the usual nighttime decrease in demand for electricity from nuclear power plants requires the involvement of unusual consumers, which could be electrolyzers designed for hydrogen production. Electric energy from a nuclear power plant, used to be waste, enters the market, where it is purchased by a chemical plant for the production of ammonia [16]. The produced “yellow” ammonia is purchased on the appropriate market by the reformed thermal power plant in order to generate electricity during times of shortage of energy resources and sell it on the electricity market (Figure 1).

Figure 1.

Market system of interaction of elements of the energy-chemical system.

The market relations between business entities allow the difference in tariffs to significantly reduce the cost of obtaining hydrogen by water electrolysis. The stability of load regimes of the generating fund, on the one hand, and the economic effect on hydrogen production processes, on the other, create synergy in the system. The number of publications by scientists from different countries confirms the adequacy of such logic [17, 18, 19], but it is valid only up to the stage of obtaining secondary energy resources. The high market value of ammonia does not allow solving the problem of to keep in use the coal-fired power generation park.

wA fundamentally different approach opens up following the principles of the circular economy. Produced by nuclear power plants against insufficient demand: Unused electricity is lost, that is, it becomes waste. The circular economy based on the three Rs (reduce, reuse, and recycle) [20] can become a solution to an almost intractable commercial situation, if recycling of electricity is used as waste for direct, almost free powering of electrolyzers. This is possible in the case of a holding that combines a nuclear power plant, a plant for the production of hydrogen (ammonia) and a thermal power plant. Figure 2 shows the scheme of the specified vertically integrated complex.

Figure 2.

Layout of a vertically integrated energy and chemical holding.

The principles of the circular economy remain valid even in the case of using energy-generating systems based on renewable energy sources. Electricity produced by wind or photovoltaic (solar) power plants, but not in demand, is the same waste as electricity produced by nuclear plants during the nighttime peak—recycling of these resources allows you to radically reduce the costs of obtaining hydrogen/ammonia.

According to Osman et al. [15], the use of nuclear power plants for powering electrolyzers is expedient in a cyclical, not in a continuous mode, with the interruption of the water electrolysis process after approximately 6–7 h, which corresponds to the nighttime failure of electricity consumption in the network and the off-peak period of operation of nuclear reactors. The duration of operation of electrolysis plants in this mode during the year can reach 2,345 h from 8,040 h/year in the 24-hour electrolysis mode.

The lower heat value of ammonia is 18.6 MJ/kg, which is less than that of bituminous coal (22.5–26.8 MJ/kg), and this determines the need for greater fuel consumption in the event of the transition of the coal power plant to the consumption of other fuels.

It is proposed to choose the Prydniprovska TPP, which has 7 power units with a total installed electrical capacity of 1,765 MW, as the object of research. The main fuel is Donetsk anthracite.

The production function of Prydniprovska TPP under the conditions of using coal (Fc) and ammonium fuel (Fa) is described by the formulas

E=2,988ln17,746E7
E=2,988ln18,912E8

and the actual production function of Prydniprovska TPP has the form shown in Figure 3.

Figure 3.

Production function of Prydniprovska TPP under the condition of using coal or ammonium fuel as fuel.

When calculating the production function of a thermal power plant under the conditions of its consumption of ammonium fuel, a 7% fuel saving was adopted while maintaining the volume of released electricity due to the elimination of means of dedusting and desulfurization of flue gas [21].

The points in Figure 3 show the current annual data on the operation of the thermal power plant in terms of electricity generation and fuel consumption; the curve contouring the specified points is actually a production function. Points below the production function indicate inefficient use of resources and production assets. Curve C is a graph of the production function of the thermal power plant when it is fed with coal fuel, and curve A is with ammonium fuel.

According to the formula of the production function, the optimal mode of fuel consumption of Prydniprovska TPP according to the criterion of the maximum specific release of electricity per unit of fuel when using ammonium fuel is approximately 1,500 kt of coal equivalent, which corresponds to the release of 3,000 GWh of electricity (2.0 MWh/t)—the Opt point on the production function. For coal, the maximum ratio of electricity output to fuel consumption is 2.8 MWh/t (3,000 GWh per 1,038 kt).

The HØST PtX Esbjerg company’s project with a production of 600 kt of green ammonia per year with an investment of 1,400 MEUR, an electrolyzer capacity of 1 GW, and an annual electricity consumption of 5,000 GWh provides an idea of the scale of production [22]. The ammonium resource base of Prydniprovska TPP requires the construction of almost three (2.7) such plants.

Let us take the number of chemical plants producing ammonia equal to 2. In this case, Fa = 600 × 2 = 1,200 kt; E = 2.270 GWh per year (the M point on the production function).

The annual cash flow of the energy-chemical complex for ammonia production and combustion at the base of the Prydniprovska TPP is equal to

CFt=p×1wp×2,988lnFa18,9121,000,MEURE9

where p is the electricity price, EUR/MWh; w is the cost of generating electricity at the TPP, EUR/MWh; Fa is the optimal consumption of ammonium fuel, kt/year.

The annual break-even annuity for the holding as a whole

CFNPV=0s=nCFNPV=01E10

where CFSNPV=0 is the break-even annuity of a holding with n plants producing ammonia; n is the number of plants producing ammonia for supply to the thermal power plan; CF1NPV=0 is the break-even annuity for one ammonia plant.

Provided Inv = 1,400 MEUR; r = 0.12; T = 25 years, the break-even annuity for one ammonia plant is 178 MEUR, and for the energochemical holding in general

CFNPV=0s=2×178=356MEUR.E11

Figure 4 shows the dependence of the electricity price, the excess of which ensures the break-even operation of the energy-chemical holding at different levels of management efficiency at the TPP.

Figure 4.

Dependence of the price of electricity, which ensures the break-even operation of the holding in accordance with the cost/price ratio for the TPP.

The performed assessment of the investment and production activities of the energy-chemical holding, which combines atomic and thermal ammonia power plants, and the chemical production of ammonia gives an idea of the economic and technological efficiency of the economic complex. It should be a very large capital investment and energy-intensive structure. The project to build an energy-chemical plant with a capacity of 600 kt of ecological ammonia is the first in Denmark and has the status of “Europe’s largest green ammonia plant” [22]. For supplying the ammonium fuel to a thermal power plant on the scale of Prydniprovska TPP, which is not the most powerful by Ukrainian standards, in the optimal mode, about 2.7 such enterprises are needed with total capital investments of about 3,800 MEUR (two chemical plants worth 2,800 MEUR are assumed).

Within the holding, not coal, but water becomes a real “fuel”—to produce 1 t of hydrogen, you need to have 9 t of pre-treated water of a high level of purity, for 1 t of ammonia there is almost 1.6 t of water [22]. The problem of water supply, especially in the locations of TPPs in Ukraine, is no less acute than the global problem of combating climate change. A positive aspect of the electrolysis method of obtaining hydrogen is that 8 t of oxygen is released for 1 t of hydrogen, which can be fully used for the effective combustion of ammonia by chemical reaction [23].

4NH3+3O2=2N2+6H2O.E12

The combustion of ammonia in air is a difficult process due to the low laminar burning velocity (0.07 m/s) [8] and great problems with ignition of the air-ammonia mixture [8, 23, 24]. Oxygen combustion of ammonia gives a much higher laminar burning velocities [23, 25].

The electricity prices that satisfy the holding’s break-even condition depend nonlinearly on the cost of electricity production. Even with very efficient management, the price of electricity should be more than 160 EUR/MWh, which is unattainable for the current conditions of Ukraine, although acceptable for EU countries. Thus, in September 2022, the day-ahead base load price of the Ukrainian market was 90–91 EUR/MWh, while on the Romanian market from September 19 to 24, the average base load price was 366.4 EUR/MWh, and the market of Slovakia—359.5 EUR/MWh, and a week earlier—386.8 and 442.6 EUR/MWh, respectively [26]. The production functions of European TPPs in terms of fuel consumption should be more efficient than Ukrainian ones, because for 1 kWh of electricity supplied to the network, they consume 280–300 g of coal equivalent and operate in base load mode, unlike Ukrainian TPPs that operate in maneuverable modes and consume 400 g/kWh [27].

This chapter does not take into account the possibility of using thermal energy produced in the process of ammonia production to meet the needs of consumers adjacent to the plant. The plant planned to be built in Denmark is capable of solving the problem of heating and hot water supply for 15,000 households in the Esbjerg/Varde area [22]. This remains a powerful resource for increasing the economic efficiency of the processes of switching to ammonium fuel.

Ukraine has no experience in decommissioning coal-fired thermal power plants, but according to US data, the cost of decommissioning a typical 500 MW coal-fired thermal power plant is up to MUSD 1.15 (USD 30 per 1 kW of installed capacity), excluding the cost of scrap metal. As a rule, the term of liquidation is from 18 to 30 months [28]. But the costs can be significantly higher due to the desire of governments to compensate for the negative social consequences. In Germany, for example, to accelerate the closure of coal-fired power plants, tenders were announced for the liquidation of 5.5 GW of generating capacity: closure of 4.0 GW in 2020 with a maximum compensation of 165 EUR/kW; and in 2021, the closing of 1.5 GW of capacity—up to 155 EUR/kW [29].

The electrolytic synthesis of “green” NH3 is a less energy-consuming process—7.5–8.0 kWh/kg of ammonia [30, 31] than the traditional Haber-Bosch technology. The electrochemical method of ammonia production is widely studied and developed by many researchers [32, 33, 34, 35]. Unlike old technologies, which are the same Haber-Bosch method, the physic-chemical processes of the new method will take place at lower temperature parameters and at lower pressure indicators, which can radically change the economic and commercial aspects of the holding’s operation.

The problems related to high prices concern only the part of the energy and chemical holding those deals with the production of secondary electricity. However, this does not apply to the holding’s ability to operate on the markets of chemical products: nitric acid, nitrogen fertilizers, etc. A chemical plant as part of a vertically integrated system, if ammonia is not supplied to the power plant, and can produce and sell ammonium nitrate at a price of 733 USD/t annually with high profitability [36]. The created energy and chemical holdings have the opportunity to expand their product line—not only electricity, but also nitric acid, fertilizers, hydrogen.

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4. Conclusions

The requirements of the green transition of the world’s power industry can lead to the elimination of coal-fired thermal power plants as such. The subject of the research is the phenomenon of the circular economy of vertically integrated production systems. The object of research is the economic efficiency of a hypothetical investment project to create an energy-chemical holding combining nuclear and ammonium thermal power plants. As an example, the Ukrainian coal-fired thermal power plant—Prydniprovska TPP was used. This chapter is based on the hypothesis that the use of circular economy techniques in the financial and energy-intensive electrolytic production of “yellow” ammonia will contribute to the break-even operation of environmentally friendly reformed coal-fired thermal power plants.

The originality of the idea is given by the definition of electricity produced by nuclear power plants, but not used due to lack of demand, as a waste that can be recycled with the use of electrolyzers. The recycling of electricity waste as an element of the circular economy and the vertically integrated structure of the energy-chemical holding make it possible to obtain electricity almost free of charge and turn it into cheap ammonium fuel for thermal power plants.

The evaluation of the economic efficiency of the investment project for the creation of an energy-chemical holding was carried out using the NPV (Net Present Value) method: The annual cash flow from the operation of the holding, the value of which depends on the price of electricity and the cost of its production, is compared with the break-even annuity, the value of which depends on the size of capital investments of the cost of capital (discount rate) and the duration of the project.

The model for the calculations is based on the production functions of Prydniprovska TPP, calculating according to the data of many years of observations—the real dependence of the electricity released into the network on the consumption of coal and the calculated one, which is modified for combustion of ammonia. Because of the lower energy parameters of ammonia, the boilers of the power plant have to burn larger volumes of fuel, but at the same time there will be no costs for cleaning the flue gas from dust and sulfur dioxide.

Today, in Denmark, we are talking about the implementation in the near future of the project “Europe’s largest green ammonia plant” with a productivity of 600 kt of liquid “green” ammonia per year, the construction of which requires 1,400 MEUR. In order to ensure the functioning of the Prydniprovska TPP, which is not the most powerful in Ukraine, in optimal fuel consumption mode, almost three such plants are needed.

The dependence of the price of electricity produced by the power plant on the cost of operation of the energy-generating enterprise under the conditions of break-even operation of the energy-chemical holding as a whole was obtained. Even with a very economically efficient operation of the thermal power plant, the price of the generated electricity should exceed 160 EUR/MWh, which is currently impossible for Ukraine (at a price of approximately 90 EUR/MWh), although the assessment did not take into account the possibility of utilizing large amounts of thermal energy.

The effectiveness of energy and chemical holdings based on the principles of the circular economy and in Ukraine is now not in doubt if they produce not secondary electricity, but chemical products—NH3, nitric acid, nitrogen fertilizers, that is, a vertically integrated nuclear power plant and a chemical plant.

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Acknowledgments

This chapter was written based on the materials obtained as part of the performing the Targeted Interdisciplinary Project of the National Academy of Sciences of Ukraine “Scientific-technical and economic-environmental foundations of low-carbon development of Ukraine.”

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Conflict of interest

The authors declare no conflict of interest.

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Written By

Igor Volchyn, Danylo Cherevatskyi, Vitaliy Mokretskyy and Wlodzimierz Pzybylski

Submitted: 11 May 2023 Reviewed: 30 May 2023 Published: 24 June 2023