Research published recently by the APEX group assesses the cost and performance of integrated energy systems that employ offshore wind power and water electrolysis to supplant liquid and gaseous fuel consumption in the Atlantic Maritimes region of Canada.
Apart from hydropower, it is difficult to find an energy technology in Canada around which politics and policy are aligned. Hydrogen is one such technology: it presents an opportunity for such cross-provincial collaboration, because multiple disparate provinces see a role for hydrogen technologies in their net-zero transitions.
In this research, we employ a recursive simulation to estimate the size, cost, and performance of green hydrogen production pathways in the Maritimes, a region with excellent offshore wind resources, dormant gas pipeline infrastructure (including subsea pipelines), and a policy target to achieve net-zero emissions by 2050. We model a large integrated energy system comprising offshore wind farms and electrolyzers, the former deployed on the broad, relatively shallow, and wind-rich Scotian shelf. The system is scaled up in line with empirically grounded growth and learning rates. Multiple scenarios are considered, including natural gas replacement, freight diesel replacement, and direct integration of low-carbon electric power from the offshore wind farm (plus some back-up capacity).
We show that hydrogen production is at least four times more expensive than grid integration. Projects could only be implemented by 2050 and at <2 $/kgH2 by assuming aggressive growth rates, learning rates, and electrolyzer capital costs of 500 $/kW. This analysis gives policymakers an appreciation of the effort, costs, and emission benefits of producing green hydrogen at scale.