Start with the investment that must earn its keep
In the owned, off-grid renewable ammonia example below, solar, wind and battery assets account for almost 60% of direct capital. The ammonia synthesis loop and air separation account for just over 3%. Most of the investment decision therefore concerns the assets supplying power and hydrogen to synthesis.
- Capital recovery explains about 88% of the cost gap before support between the renewable FLEX and reforming cases shown here.
- Eligible statutory support reduces the renewable cost directly. The reforming case assumes the capture provider passes through its modeled credit benefit in the service invoice. A separate export discussion examines a conditional Japanese award.
- Storage and synthesis flexibility change operation. Assess how much productive use they add across the year against the additional commitment required.
These prepared designs provide specific assumptions to challenge. The US route comparison shows cost before support and after eligible US statutory support.
Connect the whole production system
Connect the production system to the commercial case
Choose the production system
- Reforming with captureNatural gas, conversion performance and a priced capture service.Gas and service requirements
- Renewable electrolysisPower supply, electrolyzer, hydrogen buffer and synthesis operating limits.Hourly production and utilization
Follow the economic consequences
- Plant-gate ammoniaOutput, asset budget, operating costs and replacements.Cost per tonne
- Support and offtakeIdentify who receives support and what the customer must pay.Separate support and price requirements
- FinancingTest cash flows, debt-service coverage and equity returns.Commercial questions to resolve
Hourly dispatch applies to the renewable routes. Reforming has separate annual operating logic. The boundary ends at the plant gate.
Reforming depends on gas and capture-service terms. Renewable electrolysis connects power supply to hydrogen production, storage and synthesis. Follow those choices into output, cost and cash flow before comparing the final number.
See what each tonne has to recover
Natural gas; capture service; merchant offtake. The assumed service contract passes the capture provider's modeled 45Q benefit through to the ammonia plant. Both gross and net ammonia cost therefore already reflect this credit, counted once through the toll.
What builds the cost of this design?
USD/t NH₃- Capital
- Purchased power
- Natural gas
- Capture service
- Fixed costs & consumables
- Subtotal / total
Scroll across to see all cost components.
Real 2026 USD at the plant gate. Gross and net cost use the stated statutory support assumptions. The assumed service contract passes the capture provider's modeled 45Q benefit through to the ammonia plant. Both gross and net ammonia cost therefore already reflect this credit, counted once through the toll.
Sponsor cash-flow calculation of the revenue needed to meet the assumed equity return. Lender debt capacity is assessed separately.
The default autothermal reforming (ATR) case costs $490.79/t under an assumed capture-service contract that passes the provider's modeled 45Q benefit through to the ammonia plant. Gross equals net because the ammonia plant claims no additional credit. Removing that benefit raises the cost to $576.50/t. The route comparison below shows the $85.72/t reduction once.
The service contract determines how much of the capture provider's credit reaches the ammonia producer. Test the assumed pass-through against a supplier offer before relying on this supported ATR cost.
Renewable FLEX owns its off-grid solar, wind and battery system. Capital contributes $1,298.34/t to its $1,714.62/t gross cost, including the owned generation assets.
Eligible 45V production support reduces this design's net cost to $1,424.01/t. Its separate required sponsor price is $1,345.90/t under the assumed financing and tax treatment. Test that revenue requirement against customer alternatives, contract terms and lender debt capacity.
Locate the gap before choosing what to improve
Solid negative bars show eligible statutory support. Filled markers show net production cost.
Three US ammonia designs: cost and eligible support
USD/t NH₃- Net cost
Select a cost category to see its value in every design.
Eligible US statutory support under the assumed contracts and qualifying 2027 construction start: the ATR service contract passes through the modeled 45Q benefit; renewable FLEX and ADV receive eligible 45V.
Support assumptions
- ATR with capture · eligible 45Q
The assumed capture-service contract passes the provider's modeled 45Q benefit through to the ammonia plant. The comparison restores the pre-credit cost and deducts the $85.72/t contribution once. The single-design waterfall retains the assumed post-credit invoice. Validate the available pass-through against a supplier offer.
Construction is assumed to begin in 2027. The model applies the pre-1 January 2033 construction deadline and the scenario's capture, storage and tax assumptions. Actual eligibility and payment require project-specific confirmation.
- Renewable FLEX and ADV · eligible 45V
The modeled construction start is 2027, before the 1 January 2028 gate. Production carbon intensity and the scenario's other eligibility conditions govern access to 45V.
The negative bars express eligible support over the project life, using the modeled payment window and discount rate. Actual payment depends on eligibility.
- Comparison boundary
Real 2026 USD/t NH₃ at the plant gate. Each row is a complete configuration with its own capacity and operating assumptions. Renewable FLEX and ADV own off-grid solar, wind, batteries and hydrogen storage.
Both renewable cases extend synthesis flexibility beyond the documented demonstration scale. Exploratory ADV assumes a 7.5% minimum operating load; the proposed operating range needs licensor evidence at the plant scale.
Before support, the owned, off-grid FLEX configuration costs $1,714.62/t against ATR's $576.50/t. Capital recovery accounts for roughly $999/t of that $1,138/t difference. The renewable route's larger statutory reduction narrows the gap. The remaining difference keeps asset cost and utilization at the center of the competitiveness question.
Switch between Before support and Eligible support to compare the three US designs on the same scale. The support view includes the capture provider's eligible 45Q credit for ATR and eligible 45V for the renewable designs. The Japanese export case is discussed separately below.
The advanced-flexibility case improves renewable gross cost by about $83/t, leaving a substantial gap to ATR. Synthesis flexibility is a supporting lever within these owned power-and-hydrogen systems. Contracted-power or grid-backed configurations would need their own design and cost assessment.
ADV is exploratory and assumes synthesis can operate down to 7.5% of its rated load. Both renewable configurations extend flexibility beyond the documented demonstration scale. The proposed plant needs licensor evidence for its minimum load and operating behavior.
For analysts: what is comparable, and where support sits
All three cases use real 2026 USD at the plant gate and a 5.705% real WACC. The saved first operating year produces approximately 500 kt for ATR and 483 kt for each renewable design; nameplate capacities also differ. These are comparisons of complete configurations. Isolating the effect of one technology choice requires holding the other assumptions constant.
ATR assumes a post-credit capture toll of $16.31/t CO₂ under the service contract; the associated pre-credit toll is $68.58/t CO₂. The single-case waterfall shows the assumed post-credit service charge. The route comparison restores the pre-credit charge, then shows its $85.72/t ammonia reduction once alongside the renewable designs' eligible 45V support. Its component bars therefore share a before-support boundary.
The modeled construction start is 2027. Eligible 45V requires construction to begin before 1 January 2028; the 45Q deadline is before 1 January 2033. The model applies these gates and the other scenario eligibility conditions before support enters the result. It converts annual statutory rates into levelized contributions over production.
Look beyond the synthesis equipment quotation
Where the renewable design commits its capital
% of direct capitalUS renewable FLEX design. Shares of direct installed capital. The renewable design assumes synthesis flexibility beyond the workbook’s documented demonstration scale.
The renewable FLEX design carries $6.54 billion of direct capital. Power assets represent almost 60%; the electrolyzer represents another 28%. These assets account for most of the budget and deserve detailed equipment quotations and design scrutiny.
Test the boundary of ownership: what must the project build, and what could a supplier provide under an executable contract? Purchasing power replaces direct asset ownership with price, delivery and operating obligations. Compare the full economic cost of both arrangements.
Follow the assets through an operating week
Owned off-grid solar, wind and battery; flexible synthesis. The renewable design assumes synthesis flexibility beyond the workbook’s documented demonstration scale.
Hydrogen feed to the synthesis loop
t H₂/h- Haber–Bosch feed
- Minimum feed while operating
- Haber–Bosch feed
- 11.58 t H₂/h
- Minimum feed while operating
- 8.27 t H₂/h
The operating floor applies while synthesis is running; zero feed indicates shutdown. The chart follows hydrogen entering synthesis, with hydrogen production outside this view.
Hydrogen held in the buffer
t H₂- Buffer inventory
- Buffer inventory
- 1.21 t H₂
Inventory measures hydrogen held in storage, while feed measures hourly flow. Storage starts with an initial fill; year-end inventory can differ from that level.
Hours 4345 to 4512 of the reference year. The charts show feed and inventory on their own scales. Annual performance requires the full year's operation.
The hydrogen feed falls to zero during parts of this July week. Inventory in the buffer also changes sharply. The commercial question is whether the installed assets deliver enough ammonia across the operating year to recover their cost.
Switching to the exploratory ADV case changes the feed pattern and lowers the assumed minimum operating floor to 7.5%. The benefit depends on equipment delivering that flexibility at the proposed plant scale. The full workbook follows 8,760 hours, including power supply, storage and curtailment, so changes can be assessed beyond a favorable or unfavorable week.
For analysts: operating and financial boundaries
The operating charts retain original hours 4345–4512, covering 1–7 July of the reference year. Feed and its minimum operating floor are tonnes of hydrogen per hour; buffer inventory is tonnes. Zero feed indicates shutdown, and the floor applies during operating hours. A complete mass balance also requires hydrogen production, which is omitted from this chart. The model starts the buffer with an initial fill and allows year-end inventory to differ from that level.
Hourly dispatch applies to renewable routes; reforming uses separate annual logic. Plant-gate economics exclude a complete shipping, terminal, cracking or end-use chain. The sponsor price calculation assumes immediate tax-loss use; the lender view carries losses forward without an 80% limitation. Working capital, decommissioning and salvage are excluded. Validate the support and carbon treatment against the project's eligibility conditions.
Put the largest assumptions in front of evidence
Natural gas; capture service; merchant offtake. The assumed service contract passes the capture provider's modeled 45Q benefit through to the ammonia plant. Both gross and net ammonia cost therefore already reflect this credit, counted once through the toll.
Which assumptions deserve attention first?
USD/t NH₃Changes from 490.79 USD/t NH₃. Each assumption changes separately.
Left: lower cost or price. Right: higher cost or price. One-sided results retain their direction.
Four assumptions are tested separately against this design's net-cost baseline, each at its stated shift. The bars show calculated cost changes; combined effects require a separate scenario.
For the ATR design shown first, capital and financing sit alongside natural-gas and capture-service terms. Those dependencies point to the quotations and supply contracts that deserve scrutiny before the project advances.
Select renewable FLEX to see a different set of priorities. A 20% reduction in the overall capital assumption lowers net cost by $282.75/t. A 150-basis-point reduction in real WACC lowers it by $188.59/t. Equipment quotations, construction allowances and financing assumptions can materially change the competitive position.
Each sensitivity measures one assumption's effect using the stated shift. Assess probabilities separately and rerun the model to test combined changes. The full workbook extends this to 14 drivers and a gas-price crossover comparison.
Treat an export award as a separate opportunity
For the same US Gulf Coast ATR plant supplying Japan, an awarded Japanese price-gap contract could reduce net production cost from $490.79/t to $156.58/t. The model retains the capture provider's eligible 45Q credit and adds the assumed export support. Access to that support depends on award selection, eligibility and the export contract terms.
The total revenue required by the sponsor remains $505.48/t at the plant gate, funded by the modeled combination of customer and support payments. The $156.58/t net cost measures the cost borne by the project after support. The model assumes a $577.48/t delivered contract strike, including $72.00/t for delivery to Japan. Actual customer pricing and delivery terms require commercial validation.
For a prospective exporter, test the eligible carbon intensity, contract allocation, delivery obligation and payment terms together. The project must win an award and meet its conditions to receive the modeled benefit.
For analysts: assumed Japanese export contract
The modeled award is a two-way, cost-based contract covering 100% of eligible output for 15 years. Ammonia carbon intensity is 0.37 t CO₂e/t NH₃ against the assumed 0.87 eligibility threshold. Project-specific evidence would be required to establish eligibility.
The delivered reference is $97.88/t, derived from displaced-fuel parity and coal tax. Against the $577.48/t real delivered strike, the modeled taxable top-up is $479.61/t during the contract. Its contribution over the project life is $334.20/t. Customer pricing and lender approval require their own assessment.
Put your own commercial choices through the workbook
The released v3.7 workbook provides 15 prepared designs and an editable custom scenario. Prepared designs include eligible statutory support; competitive awards are tested separately in CUSTOM. Use it to test whether purchased power changes the preferred configuration, whether additional storage earns its cost, and how plant scale affects the preferred design. Follow production and offtake support separately into required price, financing cash flows and equity returns. Examine debt coverage when support ends, then assess the consequences of a different repayment structure.
The package includes technical documentation, quick-start guidance and recorded input sources. Bring project quotations, energy offers and contract terms to turn this comparison into a decision your team can defend.
Explore the ammonia model, or work with CovalentIQ to challenge assumptions and provide clarity on the commercial evidence the model leaves unresolved.
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