The Kitsim H2 Project, Alberta’s first “green” hydrogen (H2) production facility, is proposed to be located southwest of Brooks, Alberta, Canada. The proposed site is central to several major markets and allows easy access to water, electricity and transportation. The Project will be built in four phases and at full build out in 2030 will produce approximately 50,000 tonnes of H2 and 400,000 tonnes of O2 annually.
The Project has been specifically designed to meet the evolving demands of Alberta’s refining, fertilizer and petrochemical industries, all of which require large volumes of H2 feedstock. The Project will allow these industries to incrementally substitute water sourced H2 for their current hydrocarbon sourced H2 feedstocks, almost entirely avoiding the associated large volumes of carbon dioxide (CO2) emissions.
The availability of commercial quantities of water sourced H2 will help them meet increasingly stringent CO2 emissions standards as well as address growing investor pressure (see https://www.blackrock.com/corporate/investor-relations/blackrock-client-letter ) to “decarbonize” their operations.
Once operational in 2024, the first phase of the Kitsim H2 Project, will safely and economically produce approximately 2,100 tonnes of water sourced H2 and 16,000 tonnes of O2 annually. The 99% pure H2 and O2 gas will be compressed and shipped, initially by truck and eventually by either pipeline or rail, to southern Alberta’s nearby and rapidly growing industrial and municipal H2 markets.
IEPS has chosen to use Proton Exchange Membrane (PEM) electrolyzers for converting water into H2 and. PEM electrolyzers are a proven but rapidly advancing environmental technology O2 (see https://www.siemens-energy.com/global/en/offerings/renewable-energy/hydrogen-solutions.html) and offer several distinct advantages including the ability to accommodate frequent starts and stops.
Since water is the basic feedstock for the electrolysis process, having a secure supply of water at a reasonable price is critical to operational and economic success. In this case, the Kitsim H2 Project is uniquely positioned due to having fixed price contracts for water, provided under long-term licence with the Alberta government, already in place.
Effectively managing the costs of the electricity needed to drive the electrolysis process is also a major factor in producing competitive H2 from water. While electricity price is commonly a significant barrier to electrolysis in much of North America, Alberta enjoys a truly unique hourly-priced power generation market. The resulting very low off-peak electricity price will allow the Kitsim H2 Project to produce very competitively priced H2 (see https://www.aeso.ca/market/understanding-the-market/).
Finally, although water sourced electrolysis already has significantly reduced CO2 emissions relative to hydrocarbon based H2, further reductions can be achieved by increasing the amount of renewable power used in its production. With its high and growing proportion of renewable electricity, the Alberta grid already has a relatively low carbon intensity. However, through the acquisition of supplemental verified Renewable Energy Certificates (RECs), coupled with Power Purchase Agreements (PPAs) with Alberta’s rapidly growing supply of renewable power producers, IEPS will be able to ensure that the Kitsim H2 Project meets all national and international environmental standards for low carbon (“green”) H2 production.