Edmonton-Region-is-a-Global-Cluster-for-Low-Carbon-Hydrogen-Production

Edmonton Region is a Global Cluster for Low Carbon Hydrogen Production

Sector
Clean Technology, Hydrogen
Published On
November 28, 2022

Clean energy represents a lot of opportunity for attracting international investment into the region. Low carbon hydrogen in particular, has been put forward as a solid bet for prospective international investors. But what is it about the Edmonton region that makes hydrogen such a compelling opportunity? This blog will look at some of the reasons.

Before we dive into the numbers first a bit of background on hydrogen.

Why hydrogen?

Citizens around the world are demanding action to address environmental problems like air and water pollution, increased pressure on land, biodiversity and climate change. Because of this, international investors are increasingly rewarding companies that can demonstrate efforts to reduce the environmental footprint of their products. Hydrogen is one tool in the world’s toolbox that can help with some of these issues- namely decarbonization and reduced air pollution. We are also starting to see governments around the world introducing legislation that mandates “net zero” by 2050 or earlier. These new laws have been key to driving hydrogen initiatives globally – as well as other key drivers like energy security (especially in Europe).

Hydrogen can be produced in various ways for various end uses. For example, hydrogen can be produced via an electrolyser using electricity to break water into hydrogen and oxygen; or, a process called steam methane reforming (SMR) which breaks natural gas into hydrogen and carbon dioxide (this is the process which currently produces most of the hydrogen in the world today).

Similarly, hydrogen can be used in a variety of ways. For example, it can be burned for heat or power which results in an exhaust of water and nitrous oxides (because of the nitrogen in the air) but none of carbon dioxide, carbon monoxide or hydrocarbons resulting from the combustion of gasoline or diesel. Alternatively, hydrogen can be used in a fuel cell which generates electricity and a water exhaust.

Applications for hydrogen are also diverse and include residential or industrial heating, electricity or as a transportation fuel. Hydrogen is also required for the manufacture of chemicals such as fuels as well as fertilizers and steel.

Hydrogen leader

According to the International Energy Agency’s Hydrogen Projects Database the Edmonton region is a globally significant cluster for the low carbon production of hydrogen (Figure 1).

 

Figure 1. 2021 Global Geographic Distribution of Operational Low Carbon Hydrogen Production Capacity (normalized m3 H2/hour)
Source: IEA, 2021

 

Most of the hydrogen in the world is still being produced by gas and coal without carbon capture, storage and utilization (CCUS). The hydrogen being produced in the Edmonton region is currently based on the SMR process- a large portion of which employs CCUS and so is considered low carbon.[i] Only the capacity that is capturing and storing the resultant CO2 is being captured in the above graphic. The majority of the hydrogen production for the time being is still not utilizing the vast carbon capture capacity of the region. As you can see in figure 2, the production of low carbon hydrogen is projected to grow further in the coming years.

 

Figure 2. Current Alberta Hydrogen Production by Type and Forecast Production to 2031 (Million tonnes per year)
Source: Alberta Energy Regulator, 2022

CCUS leader

The reason hydrogen being produced in the Edmonton region is such low carbon is because we are one of the few places in the world with operational carbon capture, utilization and storage (CCUS) infrastructure.

Carbon dioxide emissions can be captured from industrial sources and then transported to a site where the emissions can be utilized or permanently stored. The stages of capture, transport, use, and storage are known as CCUS. CCUS represents a suite of technologies that enable emissions reductions from many sectors of our economy. Some technologies, like geological sequestration where CO2 emissions are permanently stored underground, are mature and have been well-understood for decades. In other cases (the “U” in CCUS), carbon can be used to make different products – ranging from carbonating beverages to producing chemicals or enhancing oil production.

According to the Global Carbon Capture and Storage Institute, the Edmonton Region is an international leader in CCUS deployment- trailing only the United States, Brazil and Australia for operational CCUS capacity – as measured in million metric tonnes of storage per year (Figure 3).

 

Figure 3. Global Operational CO2 Storage Capacity by Jurisdiction (MTPA)
Source: Global CCS Institute, Global Status of CCS 2022

 

The region also has a track record of storing carbon – as evidenced by the number of carbon offsets that have been registered from the region (in green in Figure 4.) under Alberta’s carbon offset protocols.

 

Figure 4. Cumulative Tonnes of CO2 Stored by Alberta Projects Under the Enhanced Oil Recovery and Permanent Storage in Deep Saline Aquifers Offset Protocols
Source: Alberta Offset Protocols
* Note CO2 is being stored at Clive but originates in the Alberta Industrial Heartland and is therefore counted as Edmonton Metropolitan Region

 

There are many reasons the Edmonton region is a world leader in CCUS but a few of the biggest include:

  • Natural geological advantages (we have the geology that allows carbon to be safely stored unlike many jurisdictions around the world- (Figure 5)
  • We have an existing regulatory framework – in some other regions where the geology is favourable, investors are hesitant to proceed because of a lack of clear rules surrounding things like ownership of pore-space, liability, etc.
  • We have a population familiar with industrial projects and largely supportive of their development

 

Figure 5. Regions of the World Suitable for Carbon Storage Based on the Global CCS Institutes Storage Basin Assessment Database
Source: GCCS

 

To help manage the growth of CCUS in Alberta the government is enabling carbon sequestration rights through a competitive process that enables the development of carbon storage hubs. The Edmonton Region’s leadership position is likely to be maintained because eight of the 25 proposed hubs are in the region (Figure 6). These Edmonton-region CCUS hubs are important because they take advantage natural geologic features and are adjacent to both existing and planned industrial facilities.

 

Figure 6. Location of Proposed Carbon Storage Hubs in Alberta
Source: Government of Alberta

Cheap gas

Another reason that the Edmonton Region is a global leader in low carbon hydrogen production is because of our abundance of natural gas and especially its comparable affordability in recent years. According to the IEA, natural gas is expected to remain the cheapest way for producing hydrogen out to 2050[ii]. Figure 7  illustrates how natural gas in the region has consistently been more affordable over many years- compared to other global jurisdictions.

 

Figure 7. Global Natural Gas Prices by Region over time (USD per million btu)
Source: BP Statistical Review of World Energy 2022

Innovation

The Edmonton region has a clear competitive advantage in producing low carbon hydrogen using a combination of natural gas and CCUS. However, this is not the only opportunity for hydrogen in our region.

The Edmonton region is also driving innovation in hydrogen production and use across the value chain.

Local companies such as SBI Bioenergy , Quantiam Technologies and Aurora Hydrogen are leading the charge in developing new, cleaner, ways to produce hydrogen. At the same time established companies across the region are working to drive new use cases for hydrogen. For example: ATCO’s project to supply hydrogen for residential heat, Capital Power‘s acquisition of hydrogen-capable turbines for power generation,

Hydrogen from renewable electricity is also an opportunity for our region. We have abundant solar, wind, biomass and renewable heat resources. As of October 2022, there were 650MW of proposed solar energy projects in the Edmonton Metropolitan Region (Figure 8). Energy from these projects and future projects could potentially be harnessed for the production of hydrogen.

 

Figure 8. Proposed Clean Energy Projects in the Edmonton Metropolitan region
canadian hydrogen investment opportunities in the edmonton region
Source: AESO

Conclusion

The Edmonton region is at the centre of the international low carbon hydrogen map because of its natural competitive advantages, such as abundant geology suitable for carbon capture and cheap natural gas- but also because of its leadership (founding of the first Hydrogen Hub in Canada) and pioneering work developing a robust regulatory framework– the foundation upon which investments in CCUS can be made.

With $30 billion in projects in the Edmonton region already announced the momentum appears to be growing. The Edmonton Global team invites you to and be part of the momentum.

 


[i] The Future of Hydrogen, IEA, June 2019, https://iea.blob.core.windows.net/assets/9e3a3493-b9a6-4b7d-b499-7ca48e357561/The_Future_of_Hydrogen.pdf

[ii] IEA Global Hydrogen Review, 2022 p.92 https://iea.blob.core.windows.net/assets/c5bc75b1-9e4d-460d-9056-6e8e626a11c4/GlobalHydrogenReview2022.pdf


 

Kessia Kopecky