This is the second article in a two-part series that the Halifax Examiner is co-publishing with The Energy Mix about the “green hydrogen and ammonia” project that EverWind Fuels has proposed for Point Tupper in Nova Scotia. See Part 1 here.
Nova Scotia Premier Tim Houston is a big fan of EverWind’s “green hydrogen and ammonia” project proposed for Point Tupper in Cape Breton.
In late August, a smiling Houston was photographed, together with EverWind Fuels’ CEO Trent Vichie, Membertou First Nation Chief and CEO Terrance Paul, and other dignitaries, at the signing of a memorandum of understanding between EverWind and Uniper, an international energy company with its largest market in Germany.
The memorandum states that EverWind and Uniper intend to negotiate an “offtake” agreement that Uniper will eventually buy 500,000 tonnes of “green ammonia” per year from the Point Tupper plant. EverWind signed a second memorandum of understanding the same day with another European energy giant, E.On, for another 500,000 tonnes.
At the time of the signing, Houston commented: “EverWind’s project supports our provincial goals of decarbonization and green energy leadership.”
Houston continued, “We are excited about the opportunities that green hydrogen and green ammonia projects [sic] provide for the province, including new clean energy jobs, supporting Nova Scotia’s carbon emissions reduction targets, and establishing Nova Scotia as a global leader in the production of green hydrogen for domestic and export markets.”
In fact, as detailed in Part 1 of this series, there is currently only one green hydrogen and ammonia project proposed in Nova Scotia, and it is the one EverWind Fuels proposes for Point Tupper, near Port Hawkesbury on the Canso Strait in Cape Breton.
EverWind Fuels LLC, a subsidiary of Texas-based TDL Partners, describes itself as “a private developer of green hydrogen and ammonia production, storage facilities and associated transportation assets.”
EverWind Fuels Company registered with the Nova Scotia Registry of Joint Stocks in February 2022, and the Point Tupper project is its only operation.
The project and the company are thus not yet a year old, and so far, press coverage of both has been largely and unquestioningly favourable, and many media articles are reproduced on EverWind’s website.
EverWind makes some remarkable claims about transforming Nova Scotia into “a hydrogen hub of Eastern Canada,” and expanding the project to be “globally competitive, using local wind power sources as the green power supply for carbon-neutral fuel production.”
An EverWind press release also states that the project’s “mission supports the green energy transition and strengthens Nova Scotia’s position in reaching net zero emissions,” and to “reduce dependence on fossil fuels and create a sustainable energy source for Nova Scotians and the world.”
But will it?
EverWind offers few details on exactly how that could work, given that the goal seems to be to produce ammonia, primarily for export, and use a great deal of as-yet-non-existent wind energy to do so.
Hydrogen a “wild card”
Ralph Torrie, research director at Corporate Knights, has co-authored two recent reports on how Nova Scotia can accelerate its phase-out of coal and greatly reduce its greenhouse gas emissions throughout its electricity and energy systems to tackle the climate emergency and reach net zero by 2050. Torrie prepared one report for the Ecology Action Centre in 2020, and the second was a white paper he co-authored with EfficiencyOne in 2021.
Both reports found that the most immediate and effective steps Nova Scotia could take on a “net-zero pathway” were in energy efficiency, electrification, and decarbonisation. They also stressed the importance of a just energy transition to eliminate energy poverty in the province.
The Ecology Action Centre report recommended that, “Supply side measures include 800 MW [megawatts] of new wind generation, 430 MW of solar power, the construction of the second intertie with New Brunswick, and increased purchases of hydropower resources from Quebec and the Maritime Link market block.”
The report estimated that all its recommendations would bring Nova Scotia’s energy supply to 91% renewables by 2030, eliminate 7 million tonnes of carbon emissions, and cost $1.6 billion a year while saving $1.4 billion, so with a net cost of about $200 million, “about half of one percent of Nova Scotia’s economic output” every year.
In an interview, Torrie said that while there may be a role for hydrogen in the future, it is important to ask whether hydrogen is a good way to use wind energy now.
He noted that hydrogen may have a role in what are called “hard-to-electrify” sectors, such as aviation and transoceanic shipping, and in industries such as steel-and cement-making.
However, for now, the end use infrastructure to support hydrogen is “just not in place,” Torrie said.
“So when I step back and look at the big picture challenges that we are facing to get fossil fuels out of our system, the priorities really have to be energy efficiency first and foremost,” according to Torrie. “Secondly, we need to stop using fossil fuels to make electricity.”
In Nova Scotia, Torrie said, “that means moving very heavily into wind power, as it has already. Probably, there’s going to have to be a doubling again just for the province’s own needs. And even then, the imports of hydro electricity, both from Newfoundland [Muskrat Falls] and hopefully from Quebec are going to be important to achieving a decarbonized grid.”
Torrie continued, “It seems clear to me that the higher priority should be to use Nova Scotia wind to make affordable electricity for Nova Scotians. And it’s going to be a very tight passage for Nova Scotia to get to a carbon free system.”
“So the idea of what presumably would be very, very large wind farms to make ammonia to support an offshore, unsustainable agricultural sector somewhere, just doesn’t fit in with any sort of coherent strategy for addressing the climate crisis,” Torrie said.
The main use of ammonia is as nitrogen fertilizer used widely in industrial agriculture, and the EverWind website touts ammonia as “clean fertilizer to feed the world.” EverWind also notes that ammonia “can be burned in an engine or used in a fuel cell to produce electricity,” but obviously, the company will not be deciding what its European buyers — Uniper and E.On — would be using it for.
Torrie pointed to a report by Canada’s Institute for Climate Choices, which looks at various options for decarbonisation, including hydrogen. The report separates “safe bets” from “wild cards,” with safe bets being options ready to scale up now to reduce emissions. Wild cards, on the other hand, still face technological or cost barriers and are unlikely to make much of a contribution until the 2030s.
“Hydrogen is in the wild card column in this report, for 2030 and for 2050,” Torrie noted. “This analysis is for Canada, and other countries might see a larger or nearer term role for hydrogen, but it is going to take some time, time that we don’t have.”
Once again, this is looking at the role of hydrogen in Canada, and the destination for EverWind’s ammonia-from-hydrogen is Europe.
Larry Hughes, Dalhousie University professor of electrical and computer engineering and founding fellow of the MacEachen Institute for Public Policy and Governance, said that the hydrogen production would put additional demand on renewables in Nova Scotia. However, he said it could help Nova Scotia “reduce some emissions” if it were not to be used to produce ammonia for export.
“For example, if the hydrogen they produce for the domestic market or for the Nova Scotia market is mixed with natural gas, that will reduce the emissions from natural gas,” Hughes said. “And also, if Nova Scotia Power used hydrogen with their natural gas, that would reduce some of their emissions. But I cannot see it directly reducing emissions from coal.”
What benefits, and what costs?
And what about the costs of the EverWind project?
In an interview, Vichie estimated 300 turbines would be needed for phase two, and the company plans to develop the wind projects mostly in Guysborough County on mainland Nova Scotia. He said they would bring “jobs and economic activity” to the area, and cause property taxes to go down, while putting $10 million a year into Guysborough County.
As for the costs of the project, Vichie said the first phase would cost “roughly $1 billion,” and that EverWind is looking at financing sources.
“There’s a very strong commercial bank market,” he said. “Sort of the CIBCs of the world, who is our financial advisor.”
But EverWind also hopes to get loans from the Canadian Infrastructure Bank, which Vichie said provides a “flexible sort of financing.”
He said the company has also applied for a $8 million in funding from the federal government under its “Strategic Innovation Fund – Net Zero Accelerator.” Vichie explained that his company was encouraged to do so by Mike Kelloway, the Liberal MP for Cape Breton – Canso.
Kelloway confirmed that he has met with Vichie and spoken with him a few times on the phone. He also confirmed that he encouraged him to apply for money from the Strategic Innovation Fund, which he said generally goes to Ontario, Quebec, and Alberta, rather than Nova Scotia where there have not been large projects that qualify.
Trent Vichie is not a registered lobbyist with the federal government, but EverWind has four lobbyists in Ottawa, including its chief financial officer. The company has two registered lobbyists in Nova Scotia.
An EverWind press release states that the project’s “initial phases” — which it does not define — will cost “an estimated USD $6 billion [Cdn $7.9 billion] in capital expenditures.”
Vichie has plenty of knowledge of risk, with a Master’s degree in actuarial science, and years of experience in private equity at Stonepeak Infrastructure, the Blackstone Group and Macquarie Group.
A native of Australia now living in New York, he said he was drawn to Nova Scotia for this project by the wind resource.
Paul Martin, a chemical engineer and member of the Hydrogen Science Coalition, believes “the whole world” is suffering from what he calls a “hydrogen hyperbole epidemic,” with its epicentre in Europe and the United Kingdom.
Martin said the marketing messages are that the green hydrogen projects will be “private projects” that will be “funded on the basis of their merit.”
“We all know that is not the case, unless a whole bunch of miracles happen in a row,” said Martin. “By the way, those are not miracles from on high. They are miracles that have to be funded. Miracles that have to be dragged into existence by the expenditure of tens of billions of dollars of largely public money.”
According to Martin, there are places in the world with deserts, ideal for solar power, and oceans to the west, with coastlines that are ideal also for wind energy. Among those places, he said, are Namibia, and parts of southern and western Australia. In such locations, Martin said green hydrogen and ammonia could be made from hybrid solar and wind electricity grids, and there would also be no pressing local need for that electricity.
Martin said such areas have double the capacity factor of wind energy in Nova Scotia, and can monetize their “incredible resources” by using them to produce “green ammonia,” and even “green steel.”
“And so those places in the world … are going to eat the lunch of everybody else that’s trying to do it,” he said.
Vichie, however, said that projects in remote areas of Australia wind up being expensive, as are the shipping costs to Europe. As for Namibia, he said history shows it is harder “investing in places with weak rule of law.”
Vichie said Nova Scotia’s “competitive advantage” for green hydrogen and ammonia production “is the wind resource.”
Martin disagreed, saying if there was an advantage, it was “that perhaps we have credulous governments that might want to part with large sums of money.”
As for the advantages that Nova Scotia’s wind resource offers, Ralph Torrie thinks the priority in the province should be to use wind energy to help the coal phase-out.
“The priority in Nova Scotia ought to be to marshal its renewable resources to make to make affordable carbon-free electricity. And that’s really got to be the number one priority, not only in Nova Scotia, but in other parts of Canada where we’re still using fossil fuels to make electricity.”