October 28, 2021 • Paul Rodden • Season: 2021 • Episode: 59
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In episode 059, A new source for green hydrogen is getting Europe's attention. And Woodside's, H2 Perth to make Western Australia a hydrogen powerhouse, all of this on today's hydrogen podcast.
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A new source for green hydrogen is getting Europe's attention. And Woodside's, H2 Perth to make Western Australia a hydrogen powerhouse, all of this on today's hydrogen podcast.
So the big questions in the energy industry today are, how is hydrogen the primary driving force behind the evolution of energy? Where is capital being deployed for hydrogen projects globally? And where are the best investment opportunities for early adopters who recognize the importance of hydrogen? I will address the critical issues and give you the information you need to deploy capital. Those are the questions that will unlock the potential of hydrogen and this podcast will give you the answers. My name is Paul Rodden, and welcome to the hydrogen podcast.
So in an article from bloomberg.com, Sandrine Rastello writes, Quebec's cheap power lures Europeans green hydrogen buyers. The abundance of cheap hydroelectric power that made Quebec a haven for cryptocurrency miners and data centers is now attracting other potential power thirsty buyers, European Green hydrogen producers. In a quote from Sophie Brochu, the Chief Executive Officer of the power utility, Hydro Quebec, said we have people right now in Europe who want to decarbonize. They're very interested in coming to Quebec to produce green hydrogen from green electricity, to put that on a boat and go back. They're ready to pay a fortune to decarbonize. With the world confronting the challenges of transitioning to cleaner energy.
This winter as natural gas shortages cripple countries from the UK to China, Quebec is in an enviable position, home to 50 power intensive data centers for companies including Amazon and Microsoft. The province also has large contracts to export its clean electricity to New York and Massachusetts. Provided the US projects proceed. There's been strong opposition to one of two new transmission lines in Maine, Hydro Quebec no longer foresees the kind of excess capacity that made it eager to add cryptocurrency miners and data centers clients just a few years ago. The provinces cryptocurrency mining boom hit a wall when a moratorium was imposed, and new rules that followed did little to revive it have an extra 300 megawatts allocated to new clients from an industry in 2019, only 22 megawatts have been taken up.
According to Hydro Quebec. Data centers, though, have been going up at a faster clip from 39 in 2019. To the 50 it has now. Demand is helped by the post pandemic economic rebound. But there's also interest from people wanting to use hydroelectric power to make their products greener. And that's the case with green hydrogen. Europe's goal to rely on hydrogen produced without hydrocarbons for its heavy industry has perspective power customers from the other side of the pond knocking on Hydro Quebec door. The idea would be to produce clean burning gas in Quebec using electricity to break water molecules and then ship it across the Atlantic. Helping the US and Europe achieve clean energy goals also appeals more to Quebecer's again according to Brochu, the population right now wants to make sure that when we move forward and use a green electron, it goes as long away as possible. In addition, Hydro Quebec is taking a more active approach to other sources of renewable energy. Last year, It bought a 19.9% stake in Innergex Renewable Energy Inc, a company based out of Montreal that owns and operates hydroelectric power facilities, as well as wind and solar farms in several countries. The two also struck an alliance to make joint investments, utilities interested in making more transactions in these industries, with a focus on regions it's connected with. Again, according to Brochu, cash isn't an issue, but spending it wisely is. So very interesting article here from Bloomberg.
And it's no secret that Europe right now is completely hurting for energy. But there are also some interesting insights in this article, including what it's missing. The first is that Europe is looking to Canada, and not China, the Middle East, Russia or Australia. The other interesting part of this is they don't talk about how they're going to transport the hydrogen. And that will affect the price point both at generation and consumption of the hydrogen. Also, it's interesting to note that people are now looking into hydro electricity for hydrogen generation, because even though it's not applicable in all regions, where there is hydroelectric power and excess capacity, hydrogen generation makes a lot of sense.
And lastly, this article does not talk about a price point and it will be extremely curious to see just where that price point lands for hydroelectric generated hydrogen. And lastly, Woodside's H2 Perth to make Western Australia a hydrogen powerhouse. In a press release on Monday the 25th of October, leading Australian energy producer Woodside with the support of the State Government of Western Australia has unveiled plans to establish a world scale hydrogen and ammonia production facility at a site in southern metropolitan Perth. The proposed project named H2 Perth would be built on approximately 130 hectares of vacant industrial land to be leased from the state in the Kwinana strategic industrial area and the Rockingham industries own. The h2 Perth project aims to produce low cost low carbon hydrogen based energy for consumers, stimulate and enable increased renewable power generation in Western Australia and support state government priorities for strategic industry creation and local manufacturing.
Now H2 Perth is a phased development that at full potential would be one of the largest facilities of its kind in the world. It would produce up to 1500 tons per day of hydrogen for export in the form of ammonia and liquid hydrogen, as well as meeting a shared goal of hydrogen export from western Australia in the second half of the decade. Woodside aims to support state initiatives to stimulate local hydrogen demand, particularly in the transport sector, and among local heavy industry. Local refueling stations can be built independently of the export project timelines and could operate as early as 2023 subject to approvals and customer demand. Woodside CEO Meg O'Neill so the h2 Perth would be a landmark project, both for Woodside and for the state of Western Australia. Woodside has a proud track record as an Australian oil and gas producer and our LNG exports will continue helping Asia to reliably meet its energy needs, while reducing greenhouse gas emissions for decades to come.
Now, we intend to use our skills and financial strength to add new energy products and lower carbon technologies and services to our portfolio, which can be scaled to meet customer demand. She said the land being leased from the state government in the Kwinana and Rockingham areas is ideally located close to existing gas power water and port infrastructure, as well as skilled local Residential workforce. These advantages will make a huge difference to cost of supply and schedule and help h2 Perth deliver competitively priced hydrogen to customers. Building in this location is not just about hydrogen, h2 Perth will also facilitate substantial growth of renewables in Western Australia by providing to the grid a flexible and stabilizing load that benefits uptake of intermittent renewable electricity by households and local industry.
We will also be supporting local manufacturing jobs and opportunities. She continues by saying h2 Perth is designed to be net zero emissions for both Woodside and its customers supporting Woodside corporate emissions reduction targets, and the Paris Agreement goals of customers in the region. She finishes by saying we look forward to h2 Perth, establishing Western Australia as a global hydrogen leader, building on our state's existing resources and capabilities and helping lead us into a lower carbon future. Something everyone can be proud of. Woodside will now begin community engagement on the h2 Perth project along with detailed progress with customers subject to necessary commercial and regulatory approvals and a final investment decision construction is estimated to start in 2024. Now if you've been listening to the podcast recently, you'll note that this is the next in a very long line of large scale green hydrogen production facilities that have been announced. And while a lot of these announcements should be taken with a grain of salt, this one has legs.
Now why do I say that? Well, the largest reason is because of Australia's continued investment in the hydrogen industry. And Western Australia has been primed for some time now for a facility of this magnitude. They have current and potential offtake agreements in Asia that can easily handle the 1500 tonnes per day that this project is looking to put out. Now in this press release, no price points were announced. That being said with a start date of 2024, most likely to be finished in 2025. I would imagine that they will be able to take advantage of new technological developments by that time reducing potential costs to somewhere around the $4 per kilogram mark potentially lower.
Well, that's it for me everyone. If you have any questions, comments or concerns about today's episode, come and visit me at my website at thehydrogenpodcast.com. And let me know I would really love to hear from you. And as always, take care. Stay safe. I'll talk to you later.
Hey, this is Paul. I hope you liked this podcast. If you did and want to hear more. I'd appreciate it if you would either subscribe to this channel on YouTube, or connect with your favorite platform through my website at www.thehydrogenpodcast.com. Thanks for listening. I very much appreciate it. Have a great day!