The Canadian province of Newfoundland & Labrador has the potential by 2050 to develop a hydrogen industry worth C$11 billion (US$8.7 billion) annually that would support 140,000 jobs, based on abundant hydropower, wind and hydrocarbon resources.
The province could emerge as a major regional supplier and exporter of green hydrogen once its huge Muskrat Falls hydro project is fully operational, according to a study commissioned by the federal government's Natural Resources Canada (NRCan) and Nova-Scotia-based Offshore Energy Research Association (OERA), a non-profit organisation.
The 96-page feasibility study builds on similar work that NRCan-OERA carried out on the hydrogen potential of the neighbouring provinces of New Brunswick, Nova Scotia and Prince Edward Island, which together are known as the Maritimes.
It also fleshes out how Newfoundland & Labrador could fit into the federal government's Hydrogen Strategy for Canada, published last year.
Commenting on the study, Canada's Minister of Natural Resources Seamus O’Regan — who hails from Newfoundland — said: “Hydrogen’s moment has come. It’s a game-changing opportunity for our province to create green jobs, grow our economy and reach our climate goals.”
OERA executive director Alisdair McLean said the study shows how the province could benefit "significantly" from developing hydrogen production, storage, distribution and usage, while highlighting the potential for the entire eastern Canada region "to gain through cooperation and collaboration".
Kieran Hanley, executive director at the Newfoundland & Labrador Environmental Industry Association (NLEIA), remarked that “this research confirms the production of hydrogen has enormous economic growth and diversification potential" for the province.
Sabina Russell, principal of another contributor to the study, Vancouver-based Zen Clean Energy Solutions, added that Newfoundland & Labrador “can be a leading renewable hydrogen producer in Canada, leveraging hydroelectric resources and unlocking the significant wind capacity in the region".
The study itself states that the province's "abundant" hydroelectric, wind, and oil and gas resources position it to become a major hydrogen producer, serving domestic, regional and other Canadian customers as well as potential buyers in the northeast US and Europe.
Once the enormously over-budget and long-delayed Muskrat Falls hydro project is in full flow, Newfoundland & Labrador will have an estimated 3.5 terawatt-hours per year of surplus electricity, enough to generate 73,000 tonnes of green hydrogen annually based on a 200-tonne per day facility.
This volume could be “massively increased”, claims the study, by gearing Newfoundland & Labrador's near-virgin wind and natural gas resources towards hydrogen output.
“Hydrogen offers a pathway to optimise the value of the surplus electricity that would otherwise be sold at bulk export pricing to the Maritimes," says the study.
Hydrogen is described as an opportunity for Newfoundland & Labrador’s offshore oil and gas sector to transition to a net-zero energy future.
“The region’s rich fossil fuel reserves, skilled labour sector and significant carbon dioxide sequestration potential provide the foundation for a pivot to hydrogen as a new low carbon fuel product.”
The study outlines a regional export scenario, assuming hydrogen demand in the Maritimes in 2050 is 1790 tonnes per day.
Under this scenario, Newfoundland & Labrador could supply hydrogen at a cost of C$1.75 to C$4.50 per kilogramme, based on an input electricity price of C$10 to C$50 per megawatt-hour and a plant able to produce 1000 tonnes per day.
However, a plant of this size would require electricity feedstock approaching 16.4 TWh each year, so would require more power generation capacity than is currently available.
Nevertheless, says the study, this product price “provides a compelling opportunity for (the Maritimes) to utilise hydrogen in difficult-to-abate sectors to help with decarbonisation objectives".
This price estimate includes construction of a hydrogen pipeline between Newfoundland & Labrador and the Maritimes, which is "probably" the lowest cost transportation option for a 1000 tpd facility.
One potential pipeline route would run for 1250 kilometres from Muskrat Falls in Labrador's far north to New Brunswick, via Quebec. This route would avoid a challenging offshore section between Labrador and Newfoundland island and a second crossing between Newfoundland and Cape Breton island in Nova Scotia.
Newfoundland & Labrador could also export hydrogen to Europe, with the possibility of generating annual revenues of C$9 billion based on a bulk hydrogen sales price of C$3 per kilogramme — comparable to oil and gas revenues of C$8.2 billion in 2019.
The report says Newfoundland & Labrador could use its significant untapped gas resources of about 12.6 trillion cubic feet to produce blue hydrogen, but cautions that commercial viability of this proposal depends heavily on the cost of bringing hydrogen to shore and instigation of a carbon capture and storage system.
The study estimates the price of natural gas would need to be below C$9 per gigajoule — when using steam methane reformation combined with CCUS — or C$13 per GJ (using pyrolysis) to compete with hydrogen produced via electrolysis using grid electricity in Newfoundland & Labrador.
Incorporating hydrogen-related infrastructure into new offshore oil and gas projects — such as Equinor’s Greater Bay du Nord scheme in the Flemish Pass — could help ameliorate these costs.
The report did not detail Newfoundland & Labrador's wind power potential but a paper published in 2016 by McGill University in Montreal described it as “remarkable”, estimating it to be about 500 TWh per year.
To underpin a regional hydrogen market, the NRCan-OERA study calls for Newfoundland & Labrador and the Maritimes to coordinate infrastructure plans, policies, regulations, codes and standards.
For Newfoundland & Labrador specifically, the study recommends the mandate of provincial energy company Nalcor encompasses green hydrogen opportunities, and suggests the St John’s government adopts hydrogen end-use technologies to create demand for project developers.
Feasibility studies should also be carried out on offshore wind electrolysis and on creating hydrogen hubs at Argentia port and ferry terminal — in addition to St John's — and the existing North Atlantic Refinery at Come By Chance, which has been a grey hydrogen producer.
In addition to Zen and NLEIA, other contributors to the NRCan-OERA study were Dunsky Energy Consulting and Redrock Power Systems.
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