State visit bringing spotlight to N.L. hydrogen—ready or not
Posted on August 17, 2022 | By Ashley Fitzpatrick | 0 Comments
Fortescue Future Industries (FFI) Country Manager for Canada Steve Appleton is en route from Alberta to Newfoundland and Labrador today (Aug. 17), ahead of meetings on a wind-hydrogen-ammonia project planned for Western Newfoundland. He’ll land ahead of an announced visit by Prime Minister Justin Trudeau and Chancellor of Germany Olaf Scholz, who are due at a hydrogen trade show in Stephenville, Newfoundland and Labrador on Aug. 23.
The high-level visit was something lobbied for by Newfoundland and Labrador hydrogen proponents. The announcement last week that the visit was a ‘go’ is being talked about as recognition of a need to speed the international energy transition, with an added shot in the arm for those interested in developing hydrogen in Atlantic Canada. At the same time, it’s bringing a new level of scrutiny to proposed developments still in their early stages.
In Newfoundland and Labrador, it’s still a standing question whether or not green hydrogen will get a start, and when.
In Western Newfoundland, there is one project in the works where details have been made public beyond a company press release: a proposal from World Energy GH2 (a new consortium) for the addition of 164 wind turbines for up to 1 gigawatt (GW) of power production capacity on the Port au Port Peninsula, powering a 0.5 GW hydrogen-ammonia production facility at the Port of Stephenville. The project was registered for environmental assessment with the Government of Newfoundland and Labrador on June 21.
Coming fast on its heels, Appleton confirmed, is a separate project proposal from FFI. The company issued a release on its project concept last week, ahead of a public meeting in the Town of St. George’s, less than half an hour from Stephenville. Both Stephenville and St. George’s sit on the Bay St. George on Newfoundland’s west coast. FFI is proposing up to 2,000 MW of installed wind capacity and a plant capable of producing 700,000 to 900,000 tonnes per year of ammonia. The project components will be “around the Stephenville, St. George’s and Channel-Port aux Basques area.”
FFI has filed a registration document, required to begin the provincial environmental assessment process. Staff with the provincial Department of Environment and Climate Change confirmed the submission and, in response to questions, said the document would be posted publicly only once regulatory staff confirm all the information necessary for a proper registration is provided. On that, there’s been some back and forth.
“There was a lack of clarity in my view in regard to what was anticipated and when,” Appleton told Atlantic Business Magazine when asked about the process.
“Benchmarking off of what World Energy (GH2) did, we then prepared ourselves, fully acknowledging as we approached the government that there are still some iterative stages required here and that one of them is further community engagement, because it’s not our intention to place turbines if the community doesn’t want them there … we won’t do that. And there’s some biodiversity and environmental issues that, based on the seasonality, would require us to put people on the ground, which we will not do until we have properly engaged the communities. So we openly acknowledge there is still more work to do. And they said that’s fine, we’ll work together collaboratively until we can get it to the state where it can be put into the public domain,” he said.
FFI is pressing on with community engagement and consultation in the meantime. The visit this week isn’t Appleton’s first and his appointments this time include meetings with non-governmental organizations and a public meeting in the Town of Port aux Basques.
Province interjects on Crown lands
One of Appleton’s earlier trips to the province from his office in Calgary was made with the specific intent of taking in an announcement by the provincial government on July 26, regarding Crown lands for proposed wind power developments. The province halted the existing process for land leases and launched a new, multi-stage process. Companies must now nominate lands for bidding by Oct. 1, before a competitive bids process to come later.
“That’s the first time we heard of an Oct. 1 deadline for the Crown lands nomination process,” Appleton said of the July announcement, adding FFI hadn’t yet applied for Crown land but will be nominating land in the new process.
Over at World Energy GH2, director John Risley said his company started the Crown lands process with applications back in the spring. The applications were kicked back, as a result of the government’s change in approach. “It’s a bit frustrating. Our view generally is we have to work with them and they are the regulator,” he said, in an interview Tuesday.
“I think the government sort of had second thoughts and the second thoughts I think were to some extent political in nature because of course one of my partners is Brendan Paddick, who is no stranger to the Newfoundland scene,” he said, referring to his fellow director.
Policy and politics
Paddick is well known as a friend and advisor to Premier Andrew Furey, having served for a time with an internal committee advising the Liberal government on power policy in relation to hydroelectricity on the Churchill River. Before that, he played a lead role in discussions with the federal government regarding provincial electricity rate mitigation, arising from the disastrously overbudget construction of the Muskrat Falls hydroelectric project. Paddick is also the former board chair of provincially-owned energy corporation Nalcor Energy, joining the board in 2016 as the company was struggling with Muskrat Falls cost overruns and bringing that project to completion. Now that construction of public power project is complete and commissioning underway, the government has since taken steps to fold Nalcor operations under the more highly regulated utility Newfoundland and Labrador Hydro.
Risley said the “political reaction” to the Paddick connection was in the form of suggestions that the provincial government can’t be seen to be doing favours for Paddick. World Energy GH2 being first out the gate with Crown lands has the potential to look like favouritism.
“To which we replied: ‘We don’t want any special rules for us, whatever rules there are should apply to everybody; no problem’,” Risley said.
Though much of the public discussion has been focused on Paddick, he isn’t the only individual with ties to the provincial energy companies now working on the World Energy GH2 development. Former executive vice president of power supply at Nalcor Energy (also a former president of Newfoundland and Labrador Hydro, 2015-2016) John MacIsaac is also working with the company.
Risley said MacIsaac was a natural fit, given his experience. “Obviously having somebody who previously had a senior role at Hydro is an advantage to us because he brings a deep understanding of the Newfoundland grid and we think we’ve got a role to play in supporting the Newfoundland grid,” he said.
Risley expects the wind-hydrogen-ammonia development will feed into the grid at times. It offers a source of power that could be viewed as a backup for power users on the main grid. “We think we have a role to play there as a source of that backup,” he said.
Long roads to development
World Energy GH2 may have been first out of the gate, but it’s also facing a long road ahead in terms of social license and completing regulatory processes.
As examples, though Qalipu First Nation and Miawpukek First Nation Mi’kmaq both supported the project as first proposed, local news outlet allNewfoundlandLabrador has reported on changing perceptions of the project. The Telegram and CBC have reported on the hesitation or outright objection, depending on the speaker, to aspects of the project from some individuals and local interests in Stephenville-Port au Port and elsewhere in the province. The Canadian Press has reported on technical aspects and questioned the cost of green hydrogen production. The Independent has flagged concerns on hydrogen development. NTV news recently reported on Independent MHA Eddie Joyce, a former provincial Minister of Environment, calling for the environmental assessment of the company’s project to re-start, based on the company’s clear statement in its project registration that what’s proposed would be the first of a three-phase development plan, the latter two phases including further wind power turbines being erected North and South of Stephenville, for a total of up to 3 GW of renewable electricity capacity. Even the review process as it stands, requiring an environmental impact statement and lengthier review period, will demand more information and spending from the company before any final development decisions can be made.
But World Energy GH2 is committed to pursuing the plans on the table in Western Newfoundland. Risley said they will be submitting for Crown lands in the new process.
Lobbying the PMO
Risley was at least one of the people who lobbied hard for Stephenville to be included in the Prime Minister and Chancellor’s itinerary, after becoming aware a couple of months ago that Scholz might be visiting Canada.
“We immediately started pushing all the buttons we could to convince the Prime Minister’s Office and the German Embassy to consider coming to Stephenville. That was not high on their priority list when we began those discussions,” he said, adding the idea of a stop in Stephenville wasn’t initially embraced.
“The argument we made is of course the Chancellor is going to Montreal and Toronto and will be feted in various sort of grand venues and … that’s totally appropriate for the leader of one of the world’s largest economies. But we said look, Europe is in an energy crisis, and so why don’t you come to where Canada is actually doing something about trying to solve that energy crisis… That argument, I think, resonated a bit. There was still a lot of skepticism. But I’m a persistent guy, and we kept on arguing and arguing our case, and then convinced them to actually send an advance party to Stephenville, which happened a couple of weeks ago.”
Advance teams from both the Canadian and German government were dispatched to the town of less than 7,000 residents. “They had a wonderful visit and I think they were really impressed by the commitment of the community, the support of the community, the opportunity that the whole west coast represents—not just with our project but other projects, and indeed all of Atlantic Canada,” Risley said. “And I think ultimately the argument is that this is where the problems are going to get solved. They’re not going to get solved in a ballroom in Toronto, they’re going to get solved by putting up wind turbines and electrolysers in remote areas of the country so we can ship clean energy to Europe.”
When it comes to having other companies eyeing the area, Risley said FFI are welcomed. The products these companies are proposing to produce are needed by the world, he emphasized. And he said the business is also for Newfoundland and Labrador.
“As you know, Newfoundland and Labrador in particular has been dependent on offshore oil and fossil fuels and as those oilfields and those finds mature and gradually ebb away, wouldn’t it be great if we had another industry of the sort of scale that oil has been to Newfoundland and Labrador to take its place?” he asked.
For his part, over at FFI, Appleton said there is a chance the companies will overlap in their interest for land, but that will work itself out under the Crown lands process and there will be healthy competition.
He stood side-by-side with Risley, he said, in pitching hydrogen development in Western Newfoundland to a member of the federal government, emphasizing the need for getting projects from paper to commissioning.
“We spoke in a similar theme (to the deputy prime minister) with regards to the potential for Newfoundland to be a major powerhouse,” he said, “but the fact is we need to move quickly.”
Outside of Western Newfoundland, FFI has been exploring the potential for a hydrogen project in Labrador, tied to possible development of more hydroelectricity there. When in Newfoundland and Labrador earlier this month for a ministers’ conference, federal Natural resources Minister Jonathan Wilkinson said there were more than a dozen developers interested in Atlantic wind-hydrogen-alternative fuel projects.
Federal Environment Minister Steven Guilbeault has been doing media interviews this week in Newfoundland and Labrador, speaking to the potential for wind power development. Guilbeault has been talking about regulation of offshore wind and at times his comments have been conflated in news stories with the onshore wind proposals, though the plan for offshore is to have wind regulated by the Canada-Newfoundland and Labrador Offshore Petroleum Board (in future to be the Canada-Newfoundland and Labrador Offshore Energy Board).
More on differences in the regulations and the current federal regulatory actions regarding the offshore can be found in earlier coverage from Atlantic Business Magazine.
REPORTER’S NOTE: John Risley has a professional tie to Atlantic Business Magazine. His columns appear on the final page of every one of the magazine’s printed issues, appearing every second month. That said, I have personally had no contact with Risley in the course of my work with the magazine, prior to interview for this piece. This article was edited per a usual process and I can attest is being published without any requirement for changes in comments made by Risley or any changes that might otherwise be construed as meant in favour to Risley, based on his work for Atlantic Business Magazine.
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