Canada-based green hydrogen project put on hold due to customer challengesDecember 12, 2023
The wind-hydrogen project by World Energy GH2 has been delayed for a year.
According to World Energy GH2, an affiliate of renewable fuels producer World Energy, the minimum year delay for one of Canada’s first wind-powered green hydrogen production projects is due to the company’s European customers requiring more time to develop the infrastructure needed to handle the H2 product.
Companies wanting to replace fossil fuels with H2 face many challenges.
The delay, though unfortunate, isn’t much of a surprise. The reality is that while many companies want to make a clean switch to green hydrogen, doing so is far easier said than done. There are several challenges that these companies must overcome before being able to integrate this emerging product as part of their operations for industry, transport and homes.
According to World Energy GH2 Managing Director Sean Leet, among these challenges include developing new tech to ship the hydrogen, further process it and transport it by pipeline at its final destination.
As a result, the non-binding agreement signed between Canada and Germany in 2022, which would see Canada ship green hydrogen to Germany beginning in 2025, won’t be happening.
“The offtakers are not going to be ready to accept product within 2025, actually not until 2027,” Leet told Reuters, who was referring to buyers intending to pre-purchase some of the projects H2.
Now the hope is to begin green hydrogen production near the end of 2026.
However, in order for this to happen, approval from Newfoundland’s environmental department and strong pre-purchase interest is needed before production can begin.
What’s more, Leet noted that buyer commitments depend on the Canadian government finalizing details of an up to 40% tax credit of the capital costs of constructing hydrogen plants.
Canada’s Atlantic provinces – a popular region for H2 projects.
The abundance of wind that gusts through the nation’s Atlantic provinces, namely Newfoundland and Labrador and Nova Scotia, has led to several companies advancing renewable power projects in these regions. The goal is to harness the wind and use the resulting power to produce the country’s first exports of green hydrogen.
World Energy GH2 is one of these companies, which intends to build three onshore wind farms in Newfoundland to power 250,000 metric tons of hydrogen production a year, a total cost of $12 billion.
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