With one of the highest emissions profiles among industrial sectors, fertilizer production represents a critical target for decarbonization in the global transition to net-zero. Diammonium Phosphate (DAP), one of the most widely used fertilizers, provides two of the three essential nutrients for crop growth—nitrogen and phosphorus, making it vital for increasing agricultural yields in a situation of rising global populations and climate change pressures. Transitioning to green DAP production by replacing fossil fuels with renewable energy offers a promising pathway to reduce emissions in this sector significantly. This study explores various scenarios for producing green DAP in Germany, focusing on different strategies for procuring renewable electricity as inputs. To assess the economic viability of these approaches, we model green electricity prices and DAP prices as stochastic processes, capturing the impact of market volatility and increasingly common negative electricity prices observed in European markets due to the rapid expansion of renewable generation. Profit and loss distributions, computed for each scenario, offer insights into the economic and environmental trade-offs of green DAP production. • Novel stochastic models capture negative electricity prices for DAP production. • Optimizing DAP production through mixed renewable strategies enhances energy conversion. • Green PPAs lower risk and streamline energy management in DAP production. • Wind PPAs yield highest P&L with increased volatility management. • The tool aids investors in evaluating PnL and optimizing PtX plant design for energy conversion.
Lauro et al. (Wed,) studied this question.