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22 February 2023

$6bn project kickstarts Canadian hydrogen industry

EverWind Fuels, an independent green hydrogen project developer, has received Environmental Approval for the initial phase of its $6 billion, 1 million tons per annum green hydrogen and green ammonia project located in Point Tupper, Nova Scotia.

EverWind has agreements in place to deliver its clean fuels to German companies including E.ON and Uniper by 2025, as part of the Canada-Germany hydrogen export deal – signed in August 2022 by Jonathan Wilkinson, Minister of Natural Resources Canada, and Vice-Chancellor Robert Habeck of Germany – which will see the European country find alternatives to Russian natural gas.

The Environmental Approval is a significant milestone for EverWind and its First Nations equity partners Membertou, Bayside Development Corporation and Potlotek. This also paves the way forward for the  construction of the project to start taking shape later this year. The Nova Scotia plant is the first independent green hydrogen and green ammonia project in North America to receive Environmental Approval, and amongst the first in the world.

The project has an expansion lined up for 2026 which will be powered by 2GW of onshore wind power. EverWind is already working to secure the 137,000 acres required to build the wind farm. The Point Tupper terminal which will house the $6 billion project has a capacity of more than 10 million tons per year of green ammonia and was acquired by EverWind in early 2022.

The North American country had a pipeline of at least 80MW confirmed capacity across five projects – until the EverWind plant:

  • 20MW Gazifere project that targets hydrogen injection in the national gas distribution pipelines; $90 million in costs
  • 20MW Evolugen projects that also targets gas pipeline injection; both powered by hydropower.
  • 20MW PEM electrolysis plant in Quebec owned by Air Liquide
  • 20MW feasibility study at the Niagara Hydrogen Centre
  • Unknown capacity green hydrogen project in Edmonton built by Air Products; $1.6 billion in costs.

The reason Germany chose Canada as one of the preferred countries for hydrogen imports – in addition to African countries – is because of the potential for wind power around the East Coast opening to the Atlantic. As highlighted by our analysis as part of our ‘Annual Primary Electricity 3.0’ report, Canada’s electricity generation future mainly relies on maintaining nuclear and hydro capacity, in addition to building a considerable amount of wind and some solar capacity while the reliance on natural gas slowly starts to fade away past 2040.

Rethink believes that due to the natural resources of natural gas available to Canada, any wind and solar farms that will be built from now on will keep their door open for hydrogen and derivatives production as opposed to immediately needing to be connected to the grid. Low gas prices due to domestic production will result in Canada not being forced to find alternative sources of electricity unlike Europe. And to add to the European turmoil, the European Councill came up with its ‘Additionality Rule’ which requires hydrogen production to be linked to new wind and solar farms as opposed to the existing ones in order for electricity generation to maintain its percentage of clean sources and not increase coal usage and hence carbon emissions. Easy to see why Germany thinks it’s better to just import it from somewhere else.

2023 is regarded as the year when green hydrogen takes off and Canada has made a good start so far. The hydrogen race is expected to ramp up very quickly and lack of early investment will come to haunt economies for years and even decades to come. Things can change very quickly in this sector especially since it’s in such in infant stage. China for example went from less than 5GW in planned capacity to more than 10GW in just two month this year.