East Coast hydrogen industry gets boost from German energy giants

“It is clear that Germany needs this energy. There is a real crisis there at the moment’

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On the sidelines of German Chancellor Olaf Scholz’s first official visit to Canada, some big names in European energy have signed initial agreements that could provide a massive boost to Atlantic Canada’s nascent hydrogen industry over the next decade.

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German energy providers E.ON SE and Uniper SE have announced their intention to start working on agreements to buy a total of one million tonnes of green hydrogen per year from the planned Point Tupper facility. EverWind Fuels in Port Hawkesbury, Nova Scotia, starting in 2025.

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The news came on the last day of Scholz’s three-day visit to Canada, which ended Tuesday in Newfoundland, with the signing of an agreement between the two countries to jointly explore the production of green hydrogen at export to Germany.

Scholz said on Tuesday the country was moving away from Russian energy “at lightning speed” as Europe and its allies continue efforts to isolate Russia after the Putin regime invaded Ukraine in February. last. Germany hopes that Canadian hydrogen could be a mid- to long-term solution to meet the country’s energy needs without the greenhouse gas emissions that come with traditional fossil fuels, since hydrogen only emits water when burned or used in a fuel cell.

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Prime Minister Justin Trudeau, left, and German Chancellor Olaf Scholz arrive for the Canada-Germany Business Forum in Toronto, August 23, 2022.
Prime Minister Justin Trudeau, left, and German Chancellor Olaf Scholz arrive for the Canada-Germany Business Forum in Toronto, August 23, 2022. Photo by Cole Burston/AFP via Getty Images

European gas and electricity prices have soared to record highs following a drop in Russian gas deliveries to the region that some say could portend a costly winter.

“It is clear that Germany needs this energy. There’s a real crisis there right now,” EverWind chief executive Trent Vichie said in an interview on Tuesday. “Germany needs new energy sources and it wants green energy sources and the combination of these things is accelerating green industry and hydrogen.”

EverWind’s project will see the construction of a green hydrogen and ammonia production and export facility on the site of an existing marine terminal. The hydrogen would be produced using green energy from the provincial power grid and onshore wind power.

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E.ON SE chief operating officer Patrick Lammers called the project a “transatlantic hydrogen bridge”, in a statement on Tuesday.

“This way we can bring Canadian wind energy to Germany by ship,” Lammers said. “We are not just decarbonizing and diversifying our energy supply. We will create greater energy security through cooperation between societies that share the same values ​​and uphold democracy, the rule of law and a social market economy. This step is more urgent than ever.

Vichie said permits will be in place this year and construction could begin in early 2023. The deal reached on Tuesday aims for the Nova Scotia project to enter commercial operation by 2025. Future phases of the Point Tupper facility could involve generation powered by offshore wind.

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EverWind is not the only wind hydrogen project proposed for Atlantic Canada.

World Energy GH2 is proposing to build up to 164 wind turbines on the Port au Port Peninsula on the west coast of Newfoundland to power a hydrogen and ammonia production plant in Stephenville. Earlier this month, the province ordered that an environmental assessment be carried out before it could move forward.

The headquarters of German energy supplier Uniper SE in Düsseldorf, western Germany.
The headquarters of German energy supplier Uniper SE in Düsseldorf, western Germany. Photo by INA FASSBENDER/AFP via Getty Images Files

Fortescue Future Industries, headquartered in Australia, is also proposing to build a green hydrogen production and export project in and around Stephenville, St. George’s and Channel-Port Aux Basques in Newfoundland.

But energy experts warn it may take longer for Atlantic Canada’s green hydrogen projects to come to fruition. This is partly due to the amount of infrastructure needed, from wind turbines, hydrogen production facilities, pipelines and liquefaction plants to terminals and regasification plants that will be needed on the other side of the ocean. ‘Atlantic.

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Green hydrogen is also still a developing technology that remains more expensive than conventional hydrogen production methods using natural gas – even after taking into account the additional costs associated with using carbon capture technology. to ensure near-zero emissions, said Professor Amit Kumar of the University of Alberta, the Industrial Research Chair in Energy and Environmental Systems for the Natural Sciences and Engineering Research Council.

“The cost of producing hydrogen from wind power is three to four times higher than producing hydrogen from natural gas integrated with carbon capture and storage,” Kumar said.

  1. Prime Minister Justin Trudeau, left, shakes hands with German Chancellor Olaf Scholz during the Canada-Germany Business Forum in Toronto.

    Canada and Germany aim to start hydrogen shipments in 2025

  2. German Chancellor Olaf Scholz, left, listens to Prime Minister Justin Trudeau's speech during a press conference in Montreal.

    Trudeau stifles enthusiasm for East Coast gas exports, calling business case weak

  3. Germany switches from gasoline to hydrogen on trip to Canada: sources

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And some of the proposed green hydrogen projects in Atlantic Canada would only be able to produce a fraction of the supply that can currently be produced using natural gas, Kumar added. “The technology is still developing. The costs are still high. And the scale is still very small.

But as a net importer of energy – which has suffered considerably in the face of dwindling gas supplies from Russia in recent weeks – Germany seems motivated to strike long-term energy deals with a like-minded democratic ally. ideas.

We believe that Atlantic Canada presents a huge opportunity for us, but also for Canada to contribute to a green energy transition

Olaf Scholz

Scholz said his country’s hydrogen demand will increase to around 90 to 110 terawatt hours by 2030.

“Hydrogen will play a major role in our future energy supply, especially in sectors that are difficult to decarbonize otherwise, such as industry, shipping, aviation or heavy traffic,” Scholz said Tuesday evening.

“We believe that Atlantic Canada presents a huge opportunity for us, but also for Canada, to contribute to a green energy transition.

With additional reporting from The Canadian Press

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