As one of Canada’s first “green” hydrogen (H2) producers, IEPS is proposing to build the Kitsim H2 Project, a green hydrogen production facility located southwest of Brooks, Alberta, Canada. The Kitsim H2 Project is specifically designed to assist Alberta’s fertilizer and petrochemical industries, to economically meet increasingly stringent Albertan and Canadian carbon dioxide (CO2) emissions standards. (see https://www.canada.ca/en/services/environment/weather/climatechange/climate-plan/reduce-emissions.html).
Produced through electrolysis from water and renewable power, the green H2 produced by the Project will permit these critical industries to also meet steadily growing customer and investor expectations for clear evidence of a commitment to continuous improvement in their environmental performance (e.g. see https://www.blackrock.com/corporate/investor-relations/blackrock-client-letter ).
The Kitsim H2 Project will achieve these important goals by allowing these major Alberta industries to augment their current H2 feedstocks, which are made primarily from carbon intensive natural gas (CH4), with green H2. These industries are already moving to significantly reduce their CO2 emissions by adding carbon capture, utilization and sequestration (CCUS) to their operations. However, even with CCUS in place, they will continue to have significant CO2 emissions and likely face even further future regulatory, investor and customer pressure to reduce their dependence on hydrocarbon-based feedstocks.
This will be particularly important as these industries attempt to grow to meet future market demand. By supplementing their current H2 feedstocks with green H2, the Kitsim H2 Project provides an excellent opportunity for these firms to meet both current regulatory requirements as well as growing future demands for environmentally responsible products.
Since the Kitsim H2 Project uses electrolysis, a proven but rapidly advancing environmental technology ( e.g. see https://www.siemens-energy.com/global/en/offerings/renewable-energy/hydrogen-solutions.html ) to convert renewable electricity and water into green H2, managing power and water costs are major factors in ensuring that the resulting H2 is competitive, . The project is specifically designed to take full advantage of Alberta’s unique open, competitive power market (https://www.aeso.ca/market/understanding-the-market/) and the Province’s very low-cost industrial water supplies. By purchasing spot electrical power during Alberta’s historic daily off-peak low-price periods, and by pre-acquiring long term water licences from the Alberta government, IEPS can produce green H2 at extremely competitive prices. At the same time, adherence to the highest operating standards coupled with the acquisition of Renewable Energy Certificates (RECs) (see https://www.youtube.com/watch?v=Ufib_UWbRPw) will ensure the project continues to enjoy strong local support ( see: https://brooksbulletin.com/wp-content/uploads/2021/01/02-January13-2021.pdf) while meeting all national and international environmental standards.
The resulting 99% pure H2 gas produced by the centrally located generation facility will, in turn, be compressed and shipped, initially by truck and eventually by either pipeline or rail, to southern Alberta’s nearby and rapidly growing industrial markets. The first phase of the Kitsim H2 Project,, once operational in early 2023, will safely and economically produce approximately 2,100 tonnes of green H2 annually. At its full design capacity, the Kitsim H2 Project will by 2029 be able to produce over 51,000 tonnes of green H2 a year.
The current reliance by Alberta industries on Steam Methane Reforming (SMR) to produce H2 , while economic at current natural gas prices, also produces significant amounts of carbon dioxide (CO2 ). While carbon capture and sequestration (CCS) can be used to reduce CO2 emissions from SMRs and convert “grey H2 ” to “blue H2 ”, this represents an incremental cost that will reduce but may not eliminate CO2 emissions.
Electrolyzer technology, on the other hand, is inherently scalable, can start and stop in a matter of minutes, and only produces H2 and O2 ; there are no other emissions from the process. The technology is reliable, proven and ongoing advances have materially improved electrolyzer economics.
Alberta, already a world class energy hub, offers several unique features that make electrolytically generated green H2 economically attractive. These include:
IEPS is proposing to build the Kitsim H2 Project in southeastern Alberta, within the County of Newell, near the Hamlet of Bow City, south-west of the City of Brooks. This location was specifically chosen because it is centrally located between several major markets and because it offers an optimum combination of all the key components of a successful renewable hydrogen production project.
The Project is currently expected to be developed in four phases designed to accommodate a range of market growth rates.
The initial phase will produce approximately 2,100 tonnes of H2 annually while each subsequent phase is currently planned to produce just over 16,000 tonnes of green H2 per year for total production rate of approximately 51,00 annually at full build out.
Ensuring the safety of employees, contractors and the public is IEPS’s highest priority! H2 generation facilities routinely generate public concerns regarding safety and working safely with H2 requires a commitment to following safe practices and attention to details. H2 like all other fuels, has some degree of danger associated with its production, storage and transportation and must be managed with care.
Power Costs The ability to purchase adequate amounts of electrical power at an acceptable price is critical to the success of any green H2 project. This is possible in Alberta due to the province’s unique competitive generation market where electrical power is sold and purchased on a hourly basis. For Phase 1, the Kitsim H2 Project intends to purchase much of its electrical power “off-peak” (i.e., from 9 PM to 8 AM and on weekends). Based on historical data, more than adequate electrical power is available during these time periods at a significant discount to average daily prices.
Water supply for the Project will be provided from the Bow River under a long-term licence. The annual water demand for the initial Project phase will be approximately 35,000 m3 (28 AcFt). At full 450 MW production rates, the total Project water consumption will increase to 880,000 m3 (713 AcFt) annually.
The Alberta government intends to move Alberta to the forefront of the North American hydrogen economy. Growth in on-site H2 production for internal use by an industry creates little or no demand for new H2 transportation. However, being able to successfully move H2 production off-site, whether blue H2 or green H2, for use at another facility will require effective H2transportation and storage systems.
IEPS currently expects that in the order of 25 to 29 months will be required, once internal approval to proceed is received, to advance the project through design, construction, commissioning and into operations.