World Energy GH2 faces a delay in selling product from its Newfoundland and Labrador wind-hydrogen project until European buyers develop the new infrastructure they’ll need for the fuel, the company has announced.
“The offtakers are not going to be ready to accept product within 2025, actually not until 2027,” said managing director Sean Leet, referring to buyers who would pre-purchase some of the hydrogen. He added that buyers face challenges developing new technologies to ship, process, and transport hydrogen by pipeline at its final destination, reports Reuters.
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In response to this story, the company issued a statement clarifying the holdup is with its buyers, not in its own timeline. “Despite news reports of a one-year delay, the project has not been delayed,” it says. “Project Nujio’qoni expects to sign offtake agreements and receive regulatory approval to proceed with development in early 2024, as planned,”
“European offtake timelines have been misinterpreted as a project delay,” it adds. “Offtakers have indicated that the physical infrastructure for receiving renewable energy, via green ammonia, in European markets will not be in place until late 2026, at the earliest.”
World Energy GH2 now expects to start production in 2026. Reuters says the project still needs approval from Newfoundland’s environment department and awaits strong pre-purchase interest to attract financing. The delay raises questions about the general viability of the green hydrogen industry’s presence in Atlantic Canada and Canada’s agreements to sell the fuel overseas.
An affiliate of Boston-based renewable fuels producer World Energy, World Energy GH2 is one of several that are spearheading green hydrogen projects in the region, like EverWind Fuels and Bear Head Energy in Nova Scotia. The comanies are part of what some say is a “green-hydrogen rush” prompted by Canada’s 2022 agreement to export green hydrogen to Germany starting in 2025.
So far, EverWind CEO Trent Vichie says his company remains on track to start production in 2025.
But advocacy groups like EnviroWatch NL are questioning the efficiency of a plan to build wind turbines in Canada to make hydrogen for export overseas, writes the Globe.
Other critics have been more blunt.
Last year’s green hydrogen announcement by Prime Minister Justin Trudeau and German Chancellor Olaf Scholz was “frankly, truly ridiculous, because there is no way of getting hydrogen from Canada to Germany,” Michael Liebreich, a member of the United Kingdom Board of Trade and former sustainable energy advisor to the United Nations, told Nova Scotia journalist and occasional Energy Mix freelancer Joan Baxter.
By Liebreich’s reckoning, the transportation and energy costs of shipping green hydrogen to Europe don’t add up. Converting bulky, aseous hydrogen into its more transportable liquid state already requires 40% of the energy provided by the hydrogen itself, and shipping containers for liquid hydrogen are quite expensive.
Liebreich says that, when pressed on the matter, proponents point to ammonia as a solution, since it is easier to ship. But this raises its own issues, as the shipped ammonia arriving in Germany is then used either for “clean, expensive fertilizer” or for conversion back into hydrogen—a process that then loses an additional 20% efficiency.
The hype around the green hydrogen industry has prompted a proliferation of subsidies and government support for such projects. But before going all-in to develop wind farms to transport hydrogen to Germany, Liebreich says Canadians need to answer some important questions about their own needs.
Why not “decarbonize the power system in Canada and in Nova Scotia first, since that’s a much better use of that green electricity?” he asks. Or why not “switch to and ten increase heat pumps and electric transportation first, because those are so much more efficient.” And shouldn’t “the dirty hydrogen from the Canadian refineries and the Canadian fertilizer production” be displaced before selling green hydrogen abroad?
