A $4B green hydrogen plant will be built in Quebec

Francois-Philippe Champagne, left, Minister of Innovation, Science and Industry, shakes hand with Quebec Economy and Innovation Minister Pierre Fitzgibbon, as Eric Gauthier, General Manager, TESCanada H2 inc., looks on, in Shawinigan, Que., Friday, Nov. 10, 2023, at the announcement of a green hydrogen project. Totalling $4 billion in investments for the region, the Projet Mauricie consists of the construction of an electrolyzer and renewable energy production assets. THE CANADIAN PRESS/Jacques Boissinot

TES Canada is investing $4 billion, without public funding, to build a Shawinigan, Que. plant producing "green" hydrogen, a fuel used to reduce dependence on hydrocarbons in industry and heavy transport.

"This is the first green hydrogen project in the country," said federal Innovation Minister François-Philippe Champagne at a press conference in Shawinigan on Friday morning, accompanied by Quebec's Economy and Energy Minister Pierre Fitzgibbon.

The plant's main customer will be Énergir, which will use the hydrogen to produce around one-fifth of its 115 million cubic meters of renewable natural gas (RNG) by 2030.

"This is Quebec's biggest decarbonization project for Quebec," Champagne continued.

Indeed, all production is guaranteed in writing to supply Quebec's needs, and would thus reduce greenhouse gas emissions (GHGs) by 800,000 tonnes a year.

"If we want to achieve our decarbonization objectives, we need to focus on several renewable energy sources," including hydrogen, Fitzgibbon argued.

Construction of the plant is expected to create 1,000 jobs. The plant is scheduled to open in 2028.

A HIGH PRICE TAG

TES Canada co-founder France Chrétien Desmarais, daughter of former Prime Minister Jean Chrétien and wife of Power Corporation of Canada's André Desmarais, points out that the industry is still in its infancy.

Right now, green hydrogen costs more than the products it is intended to replace, such as diesel.

"We can't predict the future, but for now, it's going in the right direction," she said in a press scrum.

"At first, I would go and sit in certain offices to discuss it. They'd say, 'I hear you, come back in ten years.' Now, people are calling because they know there's a problem and something needs to be done (...) The price will eventually catch up with the price of diesel," she said.

Desmarais even raised the possibility of expanding to increase production to 68,000 tonnes a year.

ENERGY-INTENSIVE PROCESS

It takes a lot of electricity to produce hydrogen from water using an electrolysis process.

The TES Canada plant will produce "green" hydrogen: this is what the fuel is called when made from renewable energy sources. The plant will be powered 70 per cent by its own nearby wind and solar farms and 30 per cent by Hydro-Québec energy.

The wind and solar farm project will be subject to review by the Bureau d'audiences publiques sur l'environnement (BAPE).

During peak periods for Hydro-Québec, the plant is committed to being self-sufficient in energy so as not to strain the grid.

Hydrogen is a highly flammable gas. It has many uses, either in its original state or converted to renewable natural gas.

It therefore represents a "great potential for reducing GHGs," explained Universités du Québec à Trois-Rivières professor Bruno Pollet during a technical briefing.

Hydrogen could power industrial sectors where it's currently difficult to reduce GHGs, such as cement plants. In heavy transport, where batteries don't have the necessary capacity, hydrogen becomes crucial.

Quebec is aiming for carbon neutrality by 2050, but "we have to be realistic, we won't be able to electrify everything," argued Minister Fitzgibbon.

"When it comes to heavy trucks that travel long distances, green hydrogen offers a zero-carbon solution," explained TES Canada CEO Éric Gauthier at a press conference.

He said customers in the trucking industry have already expressed an interest.

GHG-FREE?

But how can hydrogen converted into natural gas be considered "carbon-neutral" when natural gas emits GHGs during combustion? Because the process used to make RNG requires carbon dioxide, and therefore recovers GHGs.

TES Canada's main shareholder is Tree Energy Solutions.

"The project will be financed by shareholder capital, bank loans and government tax credits," explained Gauthier.

AGRICULTURE CONCERNS

The Union des producteurs agricoles (UPA) has voiced its concerns about the size of potential wind and solar farms used to power the plant, which could eat up arable land.

"The organization is concerned about the installation of more than a hundred wind turbines in a dozen municipalities in the Chenaux and Mékinac regions," the union said in a press release.

The social impact of the wind and solar farms will be discussed in the BAPE consultations, and several elected municipal officials were on hand for the announcement.

"Everyone says 'not in my backyard,'" said France Chrétien Desmarais. "We understand, but after a while, we all have a social responsibility to make things happen."

"We'll see where it ends up, but there are different possible scenarios."

This report by The Canadian Press was first published in French on Nov. 10, 2023.