Hydrogen hype is ramping up in Nova Scotia.
EverWind Fuels CEO Trent Vichie recently told the Colchester Municipal Council that his company’s proposal to build massive new wind facilities in the province to power production of green hydrogen and ammonia in Point Tupper for export to Europe is “an opportunity for Nova Scotia to stand up” and “build a world class industry,” a chance to “shine in a place where it really, really should.”
“This is a once-in-a-generation opportunity to be there,” said Vichie.
Three days after he appeared before Colchester Council, Vichie was in Port Hawkesbury with Canada’s minister of housing, infrastructure and communities and MP for Central Nova, Sean Fraser, who announced a $125 million federal investment in EverWind Fuels, through Export Development Canada. Barring no rhetorical holds, Fraser declared, “This investment will help build out the infrastructure that sets the economic foundation of our region for decades to come. Projects like EverWind will help put Atlantic Canada on the global stage as not only an incredible place to invest, but as a leader on clean, renewable energy.”
Related: Feds offer EverWind $125 million despite many unanswered questions about ‘green hydrogen’ project
EverWind Fuels also stands to benefit from hundreds of millions of dollars worth of federal tax credits.
And EverWind’s proposal to produce and export a million tonnes of green ammonia a year to Europe is just one of two green hydrogen projects proposed for the province. Bear Head Energy says it will eventually produce twice that amount of green ammonia for export from a plant it will also build in Point Tupper.
So is all of this hydrogen hype warranted, and is hydrogen really the “gas of the future,” a silver bullet for decarbonizing the world? And what are politicians, the public, and reporters without backgrounds in chemistry, engineering, or physics to make of all these grandiose claims about hydrogen’s potential in tackling the climate crisis?
For some perspective, the Halifax Examiner reached out to Michael Liebreich, a member of the UK Board of Trade, former advisor to the UN on Sustainable Energy for All, and an expert on the hydrogen economy.
The interview, conducted over Zoom from the UK, has been edited for length and clarity.
Halifax Examiner (HE): First of all, I’m going to ask you to introduce yourself and tell our readers why they should listen to you.
Michael Liebreich (ML): Mainly I’m an analyst and commentator on all things to do with the net zero transitions of energy, transport, development, private finance, and so on. My early background was in engineering. I did a lot of thermodynamics, nuclear fluids, mechanics, and participated in a lot of industries. I ended up about 20 years ago starting a business [New Energy Finance] to provide information to decision-makers on renewable energy, then expanding into all forms of clean energy, the digitization of infrastructure, and the electrification of transport. That business I sold to Bloomberg in 2009 [BloombergNEF]. Since then, essentially I do four things. One is a lot of public speaking, writing and a podcast called “Cleaning Up.” I have an angel portfolio because I invest always in this kind of net zero transition space, and there’s my register of interest. By the way, if anybody says I’m hiding anything, I’m not, it’s completely open and you can link to it. And then I do a lot of advisory work with investors, with companies that are raising money, through something called EcoPragma Capital. I’ve always got one or two or five pro-bono roles. I’ve just come off the UK Board of Trade. I’ve been on the International Energy Agency Energy Efficiency Taskforce. I’ve been on the Board of Transport for London, and an advisor to [former United Nations Secretary-General] Ban Ki-moon on “Sustainable Energy for All.” So the short version is I’ve been doing this for 20 years and I’ve made some of the big calls correctly. Things have largely played out as I thought they might.
HE: And you were also invited to deliver the keynote speech at the 2022 World Hydrogen Congress?
ML: Yes, that’s right. Nadim Chaudhry who runs that is a friend of mine going back nearly 20 years. And I think he was very aware that some of the hydrogen love-in doesn’t actually serve any purpose, and that we’ve got to get this right, ultimately. You know, I’ve been called a hydrogen denier, which is equal parts offensive and funny. I’m not pro- or anti-hydrogen. I just think that problems need to be solved, and sometimes hydrogen is the right thing – so if you’re making fertilizer. And sometimes hydrogen is the wrong thing – if you’re running a bus service.
HE: The World Hydrogen Council speaks of a “global hydrogen economy” and claims there is “no climate solution without clean hydrogen.” What are your thoughts on the hydrogen economy and that claim? What are the most important potential uses for green hydrogen?
ML: When they say there’s no net zero, no response to climate change without clean hydrogen, they’re of course absolutely correct. Because the fact is we use hydrogen today. We use about 100 million tonnes of hydrogen [a year]. It’s responsible for about 2.5% of global emissions. We use it for making fertilizer. We use it in petrochemicals and a few other things. And unless we address that, and stop using fossil hydrogen [hydrogen produced using fossil fuels rather than renewable energy] for that, then there’s no net zero. It’s a substantial enough sector that you can’t just kind of finesse it and buy offsets or whatever.
The challenge comes when you start using words like “hydrogen economy,” because then the question is, “What does that mean?” And in my understanding of what they’re saying, that means hydrogen use being pervasive throughout the economy. Hydrogen in our homes for heating, hydrogen in our vehicles for transport. Hydrogen in our shopping malls, presumably for heating. Hydrogen in our electrical system, for generating power. A “hydrogen economy” is really based on that, and that’s what I think is just fundamentally wrong and flawed.
I’ve used this analogy of hydrogen as a Swiss Army knife, because hydrogen can be just like a Swiss Army knife. Hydrogen could do everything. You can do power storage, you can do transport, you can fly an airplane, and you can you can make chemicals. You can drive a car and you can you can provide electricity. And the analogy has been picked up, by the way, by people like Bill Gates and [current U.S. Secretary of Energy] Jennifer Granholm. And lots of people now use this analogy and they say, “Marvelous, hydrogen is the Swiss Army knife of the transition.” But they’re misusing my analogy. Because there are all these things you can do with a Swiss Army knife, but you would never do. So for instance, you’ve got those little scissors. You could cut your hair, but you don’t. You’ve got a little saw, but you don’t prune your trees. Why? Well, the answer is with a Swiss Army knife, and it’s the same with hydrogen, is that there’s almost always something that is cheaper, safer, more convenient. So, for instance, I have a Swiss Army knife and I use it to open a bottle of wine on a picnic, because there’s nothing cheaper, safer, more convenient in that use case.
HE: In 2022, Canada’s prime minister and Germany’s chancellor met in Newfoundland for the signing of a joint declaration “committing the two countries to collaboration in the export of clean Canadian hydrogen to Germany.” This announcement seems to have spawned what looks like a “green hydrogen” rush in Atlantic Canada. Four companies – EverWind Fuels, the Exploits Valley Renewable Energy Corporation, Toqlukuti’k Wind and Hydrogen (ABO Wind) and World Energy GH2 – are in the running to bid on wind-hydrogen projects in Newfoundland. Two companies – EverWind Fuels and Bear Head Energy – say they are planning to produce and export a total of 3 million tonnes of green ammonia with their proposed green hydrogen projects in Nova Scotia. The International Energy Agency interactive map of hydrogen projects shows 1,894 hydrogen projects around the world. In the global push for hydrogen production – “green” hydrogen produced using 100% renewable energy and other colours (blue, grey, black produced using fossil fuels) – what role do you see for Atlantic Canada? What did you make of this declaration?
ML: That announcement by Chancellor [Olaf] Scholz and Prime Minister [Justin] Trudeau was frankly, truly ridiculous, because there is no way of getting hydrogen from Canada to Germany. So, first of all, you have to start from scratch, understanding what does the physics of hydrogen mean for putting hydrogen on a ship. Gaseous hydrogen is incredibly bulky. Even liquid hydrogen – I’m not sure that Chancellor Scholz understands – is 71 kilos per cubic meter. Water is 1,000 kilos. So really what you’re talking about is liquid hydrogen, which has to be carried at 20 Kelvin – that’s minus 253 Centigrade – which requires about 40% of the energy in the hydrogen, just to turn it into liquid. And then it is this bulky liquid, and hydrogen embrittles everything it touches. So you need very expensive metals, everything made of stainless steels, so very expensive equipment to handle it. Hydrogen loves to escape. NASA, when it used liquid hydrogen for the shuttle program, lost 46% of the hydrogen it purchased for that program. Hydrogen, by the way, is also a greenhouse gas. On a 20-year basis, it is 33 times as bad as CO2 [carbon dioxide].
So when you push on this, and you challenge Sholz’s team or Trudeau’s team, they say, “Oh, it’s going to be as ammonia.” Well, guess what? Three million tonnes of ammonia is less than a million tonnes of hydrogen … It’s about 700,000 tonnes of hydrogen, about 0.7 million tonnes, so frankly, even that is just 0.7% of hydrogen demand in the world. But the main point is, it’s expensive fertilizer. Ammonia is a precursor for fertilizer. If you tried then in Germany to take that ammonia and turn it back into hydrogen, you have a process which end-to-end is about 20% efficient. It would be completely absurd, and make Germany completely uncompetitive. So what Scholz has done with Trudeau is he’s entered into an expensive, clean fertilizer deal with Trudeau. That’s it: expensive, clean fertilizer.
Now we may need expensive clean fertilizer. I have this hydrogen ladder and at the top are things we are going to do with clean hydrogen, which is basically what we’re already doing. The top row is fertilizer and petrochemicals. The second row is things that are very, very difficult to decarbonize without clean hydrogen. So there is steel, long duration storage, maybe some aviation fuel, maybe some shipping fuel. And that’s it. I don’t think we’re going to do anything below that, pretty much.
Related: ‘Not smart for Nova Scotia’: looking under the hood of the hydrogen hype.EverWind Fuels says it will tap into this province’s ‘world-class wind’ to produce and export green ammonia to Germany. Does that make sense?
HE: About half of the grid in Nova Scotia is currently powered by fossil fuels, 35% coal and petcoke. The province has to stop using coal by 2030 and 80% of the grid has to be powered by renewables, and it’s not clear how it’s going to achieve that. However, at the same time, EverWind is proposing four massive wind projects – close to 400 giant turbines, including one which will be the largest in the Western hemisphere, to power its green hydrogen and ammonia facility. So in your view, does this project make good climate or economic sense? Would Nova Scotia be better off just putting up wind facilities wind energy (onshore and offshore) and using that green electricity to reach our own renewables targets and reduce our own emissions?
ML: If you’re going to build those wind farms in Canada, the first thing you do is push coal-fired power off the grid. Second, stop using gas and put in a heat pump. And the third thing you would do is put it into electrified transportation. And the reason is that petrol and diesel transport is so inefficient. Only 20% or maybe 25% of the energy in the diesel or the petrol goes into driving. With an electric car it’s 85%. The astonishing fact, if you even took diesel and burned it centrally in a big efficient power station, and took that electricity and put it into an electric car, you would drive further per gallon of diesel or petrol, than putting it into a car. Cars are incredibly inefficient.
So from a climate perspective, the wind there is a very good resource and it makes every sense to do those wind projects. So the first point is yes, because they will pay back the carbon debt. When you build them, there will be steel involved, there’ll be a carbon debt, it will be embodied carbon, but it will be paid back in something like 12 months, possibly 18 months at the outside. After that, it is helping the climate. So that’s good. Build it. But the idea of using it for hydrogen is absurd from a climate perspective, particularly whilst you’ve still got coal or fossil fuel, not just used locally in the electricity grid, and until you have electrified transportation and heating through heat pumps. If you’ve done those three, then you could start thinking about using it to make hydrogen. But again, from a climate perspective, only if that hydrogen was used in steel. So the idea of making ammonia with it for export is, from the climate perspective, absurd.
From an economic perspective, it is also absurd, because it’s so inefficient and wasteful in that you have to make the ammonia, particularly if the idea was to use the ammonia to generate electricity, which is what Japan is thinking of doing. But the economics can come down to the subsidies. In a sense, the good news is that those projects will not happen. And the reason is that the subsidy that is being offered in Canada, which is an investment credit, is insufficient to make the resulting ammonia competitive. So they would be selling ammonia into Europe that will benefit from the carbon tax, because, you know, making ammonia from natural gas in Europe would incur a carbon tax, and then you’ll get an investment tax credit in Canada. But the total of those will be insufficient to make that ammonia competitive. So those projects will most likely not go ahead unless, of course, there’s some other big pot of subsidy that is found.
HE: EverWind tells me its green hydrogen and ammonia project in Nova Scotia is to support the global demand for agricultural fertilizer. Both E.ON and Uniper in Germany, which have signed memoranda of understanding with EverWind for the offtake of a total of a million tonnes of green ammonia, have told me that the ammonia will probably be converted back into hydrogen, as that’s their main interest. So what is a poor, befuddled journalist supposed to make of those contradictions?
ML: The poor befuddled journalist should trust her own journalistic instincts, is one piece of advice, because of course it makes no sense. If you’re saying that you’re going to be supplying fertilizer, you don’t do a deal with an electric utility, let alone two electric utilities [E.On and Uniper]. The electric utilities are buying this because they’re hoping there is this concept of subsidy stacking, or layering subsidies. They’re hoping that there are enough subsidies available to do this thermodynamic turd of turning wind power into hydrogen, hydrogen into ammonia, ammonia into liquid ammonia, then getting it over to an import facility, and turning the liquid ammonia back into gaseous ammonia to separate it back into hydrogen, to generate it back into electricity. You could call this a crime against thermodynamics because it’s 20% efficient end-to-end. If only one unit out of five is making it through to the grid in Germany, by definition it must cost five times as much, which is … completely uncompetitive. Completely absurd. And the only way of bringing it back in line would be through more subsidies, layer more subsidies.
HE: On November 17, 2023, Canada’s federal government – through Export Development Canada – committed $125 million in financing to EverWind. Canada’s April 2023 budget offers a long list of hydrogen “incentives,” and in an interview with the Canadian Broadcasting Corporation earlier this year, Canada’s Natural Resources Minister said that for the scale of the project the companies like EverWind are development, the investment tax credits would count in the many hundreds of millions of dollars for each project. Why are these projects relying on public financing and not attracting more private capital, or are they, as somebody suggested to me, “subsidy-harvesting projects”? According to the International Monetary Fund, oil and gas subsidies are in the trillions of dollars. So are large subsidies reasonable for green hydrogen projects?
ML: These projects are subsidy harvesting. Subsidy harvesting is the only way to make these projects work, as I’ve already explained. And yes, they would need hundreds of millions of dollars of subsidies. When you ask why wouldn’t private companies make those investments, the way project finance works is that you need these offtake agreements. But right now, for every kilo of hydrogen, somebody has to put $2 on the table to close the cost gap, let’s call it $2 to $4. And so you can just multiply the numbers of kilos that Canada wants to produce. Every million tonnes is a billion kilos, so every million tons is US$2 billion. And the problem is that’s per year. But in order to get project financing done, you need ten years of that. A million tonnes of hydrogen needs US$2 billion per year for ten years, which is $20 billion. So unless Canada’s prepared to put US$20 billion down, it’s not getting a million tonnes of hydrogen made. And then if it wants to go do something really stupid, like turn it into ammonia and sell it for electricity, most of it [projects like this] will go away. I’d be surprised if one in 10 of these projects happen by 2030.
HE: In a nutshell, what in your view is the realistic role, mid- and long-term for green hydrogen in decarbonization and reaching net zero, which Canada aims to do by 2050? I’ve heard green hydrogen being called a distraction from decarbonization, but I’ve also heard proponents say this is the future and it’s going to be a major percentage of energy in 2050. What do you think?
ML: So let’s just turn that point about it being a major contributor to energy, and people like the Hydrogen Council and the Energy Transitions Commission and to a certain extent the International Energy Agency, have used numbers like 15% of our energy will be from hydrogen. The correct number is going to be something like 2% or 3%. We’re going to have to do some, because we need hydrogen for fertilizer and petrochemicals, and we might do a bit more to do what I call Row B on the hydrogen ladder. So steel, long-duration storage, a bit of aviation fuel, bit of shipping fuel. If it’s 5% by 2050, I’d be astonished, because it’s such an inefficient way of doing most anything where there’s a cheaper, safer, more convenient route. And it is a distraction because in one really substantial way, which is that if you believe the hydrogen ladder, we are going to electrify nearly everything. We’re going to electrify the heating. We’re going to electrify transportation. And the transmission grids can’t cope at the moment, and they will require enormous amounts of investment. And if we spend five years, you know, futzing around thinking that hydrogen is the answer because we don’t have the STEM [science, technology, engineering and math] skills and we don’t have the willingness to push back against these companies marketing hydrogen as a solution, we could have five years more delay in beginning the process of sorting out our transmission grid, which would be disastrous.
HE: Do you have any messages for people and especially the politicians in Nova Scotia, at all levels, in Newfoundland, Nova Scotia, Ottawa, who are throwing their wholehearted support behind these green hydrogen projects? What are the things you think they should know about green hydrogen and its potential for decarbonization?
ML: I think they should know that history will have a good laugh at a lot of things that they’re saying today about hydrogen. Here’s the warning for politicians and investors: I’ve seen this before and you’ve seen this before with dot.com … And politicians who are talking hydrogen because they think it makes them sound whizzy and modern and cool, and it gives them a good answer to any question on climate that they don’t really want to come up with the difficult answers to, they will end up trading at a discount because of that. That’s the risk for them politically and for the economists.
There are a lot of people talking about hydrogen, but from a position of, frankly, ignorance and STEM ignorance. When somebody walks into your office and starts talking about hydrogen busses or trains or ammonia exports, first of all, why you wouldn’t decarbonize the power system in Canada and in Nova Scotia first, since that’s a much better use of that green electricity? Why they wouldn’t switch to and then increase heat pumps and electric transportation first, because those are so much more efficient, each of them three, four, five times as efficient as the alternative. And why they wouldn’t first displace the dirty hydrogen from the Canadian refineries and the Canadian fertilizer production? I’ve told ministers, if somebody comes in and talks about a hydrogen train, just say, “Let me stop you there. What are you doing about fertilizer? What are you doing about petrochemical use of hydrogen? If they don’t have an answer, throw them out of your office.”
If Farcebook weren’t such a waste of space I would be using it to notify everyone I know about this fiasco in the works and to subscribe to the Examiner to read about it. The mark of a good politician is the ability to tap into information like this to avoid disastrous decisions with generational repercussions.
Hi! If you get our free morning email, you can forward that to anyone you like. Way better than Farcebook, and no ads.
Thank you HE for shining the light on this nonsense. It’s painful to have a thermodynamics degree and listen to this voodoo. I can’t wait for Maritime Launch to issue their next press release touting plans for green hydrogen launches.
Speaking of the Maritime Launch Services … when he spoke to the Colchester Municipal Council, EverWind CEO and founder Trent Vichie said EverWind had signed a memorandum of understanding “for the supply of oxygen for the Canso spaceport, and hydrogen, so there’s some chance that we might be able to fire the first carbon-free rocket in the world.”
Bravo.
It almost beggars belief that this is being considered.
Your interview is further confirmation, as if needed, of the decline of government competency! Why aren’t the feds promoting the notion of a public agency to develop wind power (It’s not rocket science!) to do exactly what Liebreich recommends? It would be a perfect occasion to get the public sector back into electricity production and economic development.
It’s not as if NS isn’t already plagued by the high cost, inefficiency and ineptitude of business delivered electricity.
Fabulous article, Joan! It confirms all of my concerns with this ill-conceived project. I too will use your piece in approaching the powers that be to reconsider this tragic waste of our tax money. There is no question in my mind also of the value in using the money being touted for “ammonia production” for electrical grid investment and the introduction of more solar and wind energy onto that grid.
Thank you Joan. Illuminating. It answers a number of questions from this old crone. I am forwarding a link to this article to the usual suspects and asking them to provide a response. As ever, keep up the good work.
I am definitely adding ‘thermodynamic turd’ to my vocabulary.
Excellent reporting as always.
Any green hydrogen production/use has to be radically decentralized and not for export.
It will have it’s place someday and be an essential part of the energy mix but only in that context.
I also very much appreciate experts calling somethings stupid and absurd when it is clearly stupid and absurd…no need in dressing it up.
Excellent reporting, thank you. I’ve been hoping that “the good news is that those projects will not happen”, but how much money and time will we have thrown away?
I think we need to replace any reference to the hydrogen economy with the “thermodynamic turd” economy.
From the get-go I wondered why this wind resource, being so great, wouldn’t be used to assist Emera with replacing its coal based electricity production.Then, the ‘carnival’ came to town -not quite Premier Buchanan with a glass jar of offshore oil proclaiming it to be the be-all for Nova Scotians- but worse. A subsidy harvest as the way to get the ‘carnival goers’ to fork over their billions of U.S. dollars to companies that could never get private financing without the pre-requisite subsidy harvest. Why would we not be surprised that schemes are being hatched in the name of reducing the effects of increased carbon in the atmosphere? What next- carbon sequestration and storage is the way to go- oh, that’s already happening and some politicians have jumped on that as an answer. Carbon sequestration and storage, another many-horned, carnival beast.
Terrific work by Joan Baxter-providing invaluable insight into this topic! Kudos!
It was Gerry Regan with “It’s oil!” in 1971, not John Buchanan.
Same difference!