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This paper considers the optimal incorporation of renewable ammonia production facilities into existing supply chain networks which import ammonia from conventional producers while accounting for uncertainty in this conventional ammonia price. We model the supply chain transition problem as a two-stage stochastic optimization problem which is formulated as a Mixed Integer Linear Programming problem. We apply the proposed approach to a case study on Minnesota's ammonia supply chain. We find that accounting for conventional price uncertainty leads to earlier incorporation of in-state renewable production sites in the supply chain network and a reduction in the quantity and cost of conventional ammonia imported over the supply chain transition horizon. These results show that local renewable ammonia production can act as a hedge against the volatility of the conventional ammonia market.

This work considers the incorporation of renewable ammonia manufacturing sites into existing ammonia supply chain networks while accounting for ammonia price uncertainty from existing producers. We propose a two-stage stochastic programming approach to determine the optimal investment decisions such that the ammonia demand is satisfied and the net present cost is minimized. We apply the proposed approach to a case study considering deploying in-state renewable ammonia manufacturing in Minnesota’s supply chain network. We find that accounting for price uncertainty leads to supply chains with more ammonia demand met via renewable production and thus lower costs from importing ammonia from existing producers. These results show that the in-state renewable production of ammonia can act as a hedge against the volatility of the conventional ammonia market.