Once the Churchill Falls contract with Quebec expires in 2041, the province will have plenty of green power and a need to find markets for it.
On Oct. 7, 1966, Joey Smallwood, then premier of Newfoundland and Labrador, wrote in his daybook, “Praise be to God!” Small wonder, since the day before then-premier Daniel Johnson of Quebec had authorized Hydro-Québec to sign a Letter of Intent with CFLCo (Churchill Falls Labrador Company) and made Smallwood’s dream of developing Churchill Falls a reality. The resulting 1969 contract, however, has not brought the economic benefits the people of Newfoundland and Labrador were led to believe would accrue from its development. If anything, the contract has been a constant source of irritation and resentment in the province.
When the Churchill Falls contract expires in 2041, it could be déjà vu all over again for Newfoundland and Labrador: unable to build an export line through Quebec and facing the prospect of constructing a new grid through Labrador to the island of Newfoundland and then by submarine cable to one of the Maritime provinces.
There is another possibility, one that would not have been viable when Churchill Falls was first envisaged, and that is to turn the power into a form of energy that can be exported: hydrogen.
The International Energy Agency (IEA) sees hydrogen as an energy carrier that can be used as a clean fuel to help address the world’s climate crisis, projecting that hydrogen demand will increase from 0.36 megatonnes in 2018 to almost eight megatonnes in 2030.
Hydrogen is used in industrial applications such as crude oil refining, ammonia production and the manufacture of hydrogen peroxide. It is also used in hydrogen fuel cells to convert hydrogen to electricity for power generation and transportation. In natural-gas networks using polyethylene pipes, hydrogen (up to 20 per cent) can be mixed with natural gas to reduce emissions.
Despite its promise, the problem is finding the hydrogen.
The atmospheric concentration of hydrogen is about six parts per million by volume, making it too expensive to extract from the air. Instead, it needs to be produced from a hydrogen-rich compound, typically water (H2O) or natural gas (methane or CH4), which have higher concentrations of hydrogen than air.
The two major approaches to producing hydrogen depend on the feedstock.
Green hydrogen (hydrogen produced from water): If you took high school chemistry, you might recall that hydrogen can be extracted from water using electrolysis. By running a current through water, hydrogen is produced at the cathode and oxygen at the anode. Industrial-scale electrolysis systems require a continuous supply of power. To be considered green hydrogen, electricity should come from zero-emission sources (notably renewables and nuclear).
Hydrogen can also be produced from water by renewables using a polymer electrolyte membrane (or PEM) cell. PEM has the advantage over electrolysis in that it can use variable sources of electricity (wind or solar, for example).
Blue hydrogen (hydrogen produced from methane): Obtaining hydrogen from methane is achieved using a process known as steam methane reforming (or SMR). As the name suggests, steam reacts with methane to produce hydrogen. Unlike electrolysis and PEM, which produce hydrogen and oxygen, SMR produces not only hydrogen but also carbon dioxide. About 95 per cent of all hydrogen is produced by SMR. Advocates of blue hydrogen and SMR technology assume that the process will be combined with some form of carbon capture and sequestration (or storage) (CCS) or carbon capture, utilization and storage (CCUS).
At present, shipping hydrogen long distances by tanker is a challenge because of hydrogen’s low density. The expected global demand for hydrogen is spurring research into liquid organic hydrogen carriers (or LOHCs), which combine hydrogen with compounds to create hydrogen-rich compounds that are denser than hydrogen. These compounds can be transported more cost-effectively, stored, and the hydrogen can be extracted when needed.
In Canada, the federal government is promoting hydrogen as part of its national climate plan. It sees Manitoba and Quebec as major producers of green hydrogen and plans to support blue hydrogen as a way of helping Western Canada’s struggling oil and natural gas sector.
The federal government has identified potential export markets for Canadian hydrogen, including the United States, Asia and the European Union. Accessing these markets could be to Canada’s advantage because it is likely that there will be a premium put on green hydrogen from renewable sources, especially in jurisdictions pushing for a zero-emission future. For example, to qualify for the EU CertifHy program, hydrogen producers will need to have a Guarantee of Origin certificate that shows the hydrogen is produced from green sources of electricity.
Quebec has plans to become a major player in the production of green hydrogen and Hydro-Québec has recently signed an agreement with German industrial giant Thyssenkrupp for an 88-megawatt electrolysis plant to produce 11,100 metric tonnes of green hydrogen per year (about 3 per cent of the world’s total hydrogen production).
In 2041, with the grid from Churchill Falls into Quebec already in place, Newfoundland and Labrador could negotiate a contract with Hydro-Québec to continue purchasing power from Churchill Falls and let Hydro-Québec produce and export green hydrogen through, for example, Port Saguenay, where there are already plans to develop an export terminal for liquified natural gas.
Ideally, a mutually beneficial agreement could be reached between Hydro-Québec and Newfoundland and Labrador for the sale of power from Churchill Falls for hydrogen production. If not, there is nothing to stop Newfoundland and Labrador from becoming a producer of green hydrogen incrementally.
As Newfoundland and Labrador increases its use of power from hydroelectricity and reduces its reliance on power from oil, it will be producing some of least emissions-intensive electricity in Canada. Some of this power could be used to produce green hydrogen.
For example, the site of the recently shuttered oil refinery in Come by Chance could be the location of an electrolysis plant and the refinery’s port could be expanded for hydrogen export.
If this were to prove successful, perhaps the 2,250 megawatt Gull Island hydroelectric site (abandoned after Quebec blocked Newfoundland and Labrador’s attempt to transmit power through the province) could be developed as a source of power for hydrogen export.
However, it would first have to be demonstrated that lessons were learned from the recently completed Muskrat Falls project downriver from Churchill Falls, which was beset by numerous mistakes including not respecting Indigenous rights to construction cost overruns.
But when the Hydro-Québec contract finally expires in 2041, power from Churchill Falls could be transmitted to the island of Newfoundland to use as another source of power for hydrogen export.
If the global market for hydrogen is as lucrative as organizations such as the IEA believes, perhaps Joey Smallwood’s dream of Newfoundland and Labrador benefitting from Churchill Falls will be realized, albeit 75 years after he praised God in his daybook.