Brookfield Renewable Partners LP’s Holtwood power plant in Pennsylvania.Handout
A fast-growing U.S. maker of hydrogen fuel cells has signed a deal to produce green hydrogen by using hydroelectricity from Brookfield Renewable Partners LP’s Holtwood power plant in Pennsylvania, as the industry touts the dawn of an energy revolution.
Plug Power Inc. , based in upper New York State, has ambitious plans over the next eight years to build and install electrolyzers, which generate green hydrogen by using renewable electricity. Through a process known as water electrolysis, hydrogen is captured as fuel after being split from oxygen.
Many environmentalists view green hydrogen as a holy grail for the world’s energy transition over the long term for use in transportation and industrial heating, especially as a wide array of countries strive to achieve net-zero carbon emissions by 2050.
Plug’s expertise is in making hydrogen fuel cells, but the Latham, N.Y.-based company plans to diversify by building an extensive U.S. network of green hydrogen production sites. In a bid to turn its dreams into reality, Plug has formed partnerships with Brookfield and other suppliers of renewable electricity.
For Plug and Brookfield, the agreement at Holtwood signals a leap forward for green hydrogen. Skeptics, however, question whether the clean energy industry’s excitement is more hype than substance.
Green hydrogen is the cleanest version of hydrogen, but it currently has high costs for production.
There are only a handful of green hydrogen projects operating today in North America, but proponents of electrolyzers say the future looks bright for the hoped-for global transformation to low- or zero-carbon energy sources.
“The interest in electrolyzers has just gone up significantly in the last year,” said Amy Adams, vice-president of fuel and hydrogen technologies at Cummins Inc.
Cummins, an Indiana-based manufacturer of truck engines that use diesel or natural gas, diversified into electrolyzers in 2019 with the acquisition of Mississauga-based Hydrogenics Corp.
A green hydrogen project led by Cummins in Bécancour, Que., recently opened and has been producing more than eight tonnes a day, using power from Hydro-Québec. Cummins owns 81 per cent of the venture, while Air Liquide SA has a 19-per-cent stake.
“It’s not just ambitions because we could really see the market developing very quickly,” said Ms. Adams, who is based in Mississauga.
Hydrogen is stored in a large liquid tank and then transported in liquid form using cryogenic trailers. After being moved to the point of use, it is vaporized into a gaseous state.
Locating electrolyzers near sources of renewable electricity is important to increase reliability of the power supply and minimize or even avoid the cost of new transmission lines.
The Plug and Brookfield Renewable venture in Pennsylvania is forecast to produce early 10 tonnes of green hydrogen a day.
“We have a facility called Holtwood hydro that produces a significant amount of renewable power,” Brookfield Renewable chief executive officer Connor Teskey said. “Plug Power is going to build their new electrolyzer – their new hydrogen facility – right near our hydro dam.”
Toronto-based investment giant Brookfield Asset Management Inc. owns 48 per cent of Brookfield Renewable, which has partnership units and related shares that trade on the Toronto and New York stock exchanges.
Hydrogen is seen as an ideal replacement for diesel or natural gas. “When hydrogen is burned, it releases energy, but it doesn’t release any carbon,” Mr. Teskey said.
He is optimistic that today’s high costs will be significantly reduced within a decade.
“It’s still very, very much in its nascent stage. We do think over time as the industry ramps up, economies of scale will prevail and green hydrogen will become cost effective,” Mr. Teskey said.
Other suppliers of renewable electricity include Apex Clean Energy Inc., which has lined up wind power for Plug in Texas. A site in western New York also has been identified, with the state signed up to provide hydroelectricity to Plug.
Plug chief strategy officer Sanjay Shrestha said there will be a variety of facilities opening over the next several years as the company rolls out its green hydrogen network. The goal is to produce 45 tonnes a day by the end of 2022 and ramp up to 450 tonnes a day by 2025, focusing first on the United States. If all goes well, Plug’s aim is to get to 900 tonnes a day globally by 2028.
“We’re looking at a lot of sites,” Mr. Shrestha said. “One of the ways to get to as close to zero carbon as you can is really by thinking about green hydrogen.”
Through a process called steam-methane reforming, natural gas is already being used in the energy industry to make grey hydrogen, which emits carbon dioxide during production.
Another version, blue hydrogen, is also produced from natural gas, but the process captures and stores carbon dioxide.
Mr. Shrestha says he believes the green hydrogen economy will emerge in the not-too-distant future, with renewable power costs dropping around the world. “To decarbonize the electric grid, we’re going to need to add a lot of renewables,” he said.
As well, he forecast that hydrogen will be fuelling a vastly higher number of buses and long-haul transport trucks in the years ahead.
Plug acquired electrolyzer maker Giner ELX Inc. last year and it bought United Hydrogen Group Inc., a producer and distributor of hydrogen.
Hydrogen fuel cells in vehicles create electricity without emitting carbon dioxide, providing a cleaner alternative to energy generated by fossil fuels.
Skeptics are unimpressed by fuel cells and green hydrogen. “It’s all just a pipe dream, because ‘green’ hydrogen is too expensive and too inefficient to produce, store, transport and burn,” argues New York-based Kerrisdale Capital Management LLC, a short seller (an investor that bets against companies and their stock price).
In a report in January, Kerrisdale said Plug and other boosters of the hydrogen economy are deluded. Plans for widespread use of electrolyzers “are far from reality as they’ve ever been,” the report said.
Mark Kirby, CEO of the Canadian Hydrogen and Fuel Cell Association, said the fate of green hydrogen hinges on the renewable power industry’s ability to reduce costs.
Bearing in mind the long time horizon for green hydrogen to become common worldwide, Mr. Kirby said it’s important for governments to also recognize the role other types of hydrogen will be able to play in decarbonization.
Quebec, for instance, has abundant hydroelectricity and is positioned to nurture production of green hydrogen. By contrast, Alberta will seek to tap its natural gas reserves and carbon-capture technology to produce blue hydrogen.
“We need as much clean hydrogen as we possibly can get. It will be produced by many pathways. It won’t be just by one,” Mr. Kirby said.
Brookfield’s Holtwood hydro site in Pennsylvania is in the running to be the first to power electrolyzers in Plug’s green hydrogen network when its facility opens in late 2022, although rivals such as the Plug and Apex wind partnership in Texas are also in the hunt for bragging rights to be first.
Mr. Shrestha is committed to strengthening the company’s fuel cell production while also diversifying into green hydrogen.
“We want to build the network of green hydrogen generation facilities in the U.S.,” he said. “It’s real because as we keep on decarbonizing the electric grid and as prices for renewable power keep going down, the cost of green hydrogen would continue to go down.”
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Brent Jang