Yahoo Finance Quebec inks contract for one the world’s biggest green hydrogen plants
Quebec is a step closer to building one of the world’s largest green hydrogen plants, as the province looks to rival Alberta’s plan to become Canada’s hub for the zero-emissions fuel.
On Monday, Hydro-Québec awarded an engineering contract to a subsidiary of German industrial giant Thyssenkrupp (TKA.DE) to oversee construction of an 88 megawatt water electrolysis plant. The project is touted as “one of the world's first and biggest production facilities for green hydrogen.” Essen, Germany-based Thyssenkrupp expects to commission the project in late 2023.
Set to be built in Varennes, Que., near Montreal, Hydro-Québec’s new plant is expected to produce 11,100 metric tons of green hydrogen annually. The public utility will invest $200 million in the facility that will supply hydrogen and oxygen to a biofuel plant, which will convert non-recyclable waste into ethanol and methanol.
Electrolysis requires massive amounts of electricity to separate water into hydrogen and oxygen. All hydrogen is emissions-free, but the fuel is only considered “green” when the electricity source used to create it emits zero-carbon, such as hydro. If the process involves fossil fuels like natural gas, the hydrogen is seen as less environmentally friendly.
“This project is an excellent illustration of how important the interaction of secure access to competitive renewable energy and the use of scaled technology for hydrogen production is,” Sami Pelkonen, CEO of Tyssenkrupp's chemical and process technologies business unit, said in a statement.
According to IHS Markit, annual investment in green hydrogen production will exceed US$1 billion by 2023.
Ottawa unveiled its hydrogen strategy in mid-December, making the fuel a key component of its goal to reach carbon neutrality by 2050. That plan has been praised in fossil fuel-rich Alberta, and criticized by environmentalists, for its initial reliance on natural gas over renewable energy sources.
Alberta and Quebec appear to be leveraging different strengths in a race to lead Canada’s emerging hydrogen fuel sector. Hydro-Québec is one of the world’s largest hydro-electricity producers, with 99 per cent of its energy coming from renewable sources. Alberta has the second-largest natural gas reserves by province, behind British Columba. The province is promoting carbon capture technology to offset the potential environmental impact.
Today, most hydrogen is produced using fossil fuels. Producing green hydrogen is more expensive. However, a recent report by Wood Mackenzie estimates costs could fall by as much as 64 per cent by 2040.
Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jefflagerquist.
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