Irving Oil will expand hydrogen capacity at its Saint John refinery with the goal of offering hydrogen fuelling infrastructure in Atlantic Canada. The move will make the company the first to introduce hydrogen to the regional market.
Irving announced on Tuesday it has formalized an agreement to purchase a hydrogen electrolyzer from the New York hydrogen technology company Plug Power Inc., making it the first oil refinery in Canada to make such an investment.
Irving expects the five-megawatt electrolyzer to be fully operational by late 2023.
Andy Carson, the director of energy transition at Irving Oil, told Huddle the electrolyzer will play a significant role in exploring further hydrogen production, driving emission reductions at the Saint John refinery and clean energy solutions for customers.
“This unit is going to allow us to produce a form of hydrogen from the electrolysis process that will allow us to essentially turn down the other forms of hydrogen production that already take place in our refinery that are more carbon intensive,” Carson said in a July 12 interview.
He said adopting the electrolysis process will reduce overall site-level emissions at the refinery. Once it’s fully operational, the electrolyzer will produce two tonnes of hydrogen per day.
“We think it’s great from an operational perspective but also very compelling from a customer perspective as well,” he said.
Irving had previously announced sustainability goals targeting a 30 percent reduction in its greenhouse gas emissions by 2030. Carson explained the initial hydrogen electrolyzer investment will help the company reach that goal.
Opens door to new market
In addition to what it means for the refinery and its emissions profile, Carson stated the investment will also allow Irving “to unlock the value of hydrogen as a new energy product for external markets” and open a new line of business for the company selling hydrogen directly to customers.
“This will be a new venture for us but it will also be a new energy product in the retail marketplace,” said Carson. Right now, in Atlantic Canada, there is no available supply of hydrogen from a marketing perspective.
“We think there’s a variety of customers in the region: potential transportation customers, logistics, customers, and others, who have been waiting for hydrogen to become available as they consider equipment, replacements, or evolution of their own infrastructure,” he said.
“They’ve been looking for hydrogen to be available as a reliable and clean energy source before they make those investments.”
Irving’s Saint John Refinery is already the largest producer of hydrogen in Atlantic Canada and one of the largest producers in the country. It generates more than 200 tonnes of hydrogen per day, which it uses to lower the sulphur content of petroleum products at the refinery.
While current hydrogen at the facility is produced with natural gas, the new electrolyzer will create hydrogen using electricity from the local grid.
Carson said potential customers in the market have come to recognize the refinery as a source of hydrogen from how it’s already being used in some of its traditional processes, but until this week’s announcement, there hasn’t been anyone in the region able make the energy source available to downstream markets.
“We have had potential customers reach out to understand whether there’s potential for them to access some of that hydrogen,” shared Carson. He added that, in the hours since Tuesday’s announcement, some of those potential customers were already inquiring further.
While Carson would not disclose the amount that Irving will invest in the technology (only saying it is “an important investment from a company standpoint”) he stated Irving went through a comprehensive process of understanding the market for the production of electrolyzers before selecting Plug Power Inc. as a partner.
Plug, gaining attention in fuel cell technology
PEM, (short for Proton Electrolyte Membrane) is used in the electrolysis of water, electro-chemically splitting hydrogen and oxygen at their respective electrodes.
In terms of sustainability and environmental impact, PEM water electrolysis is considered one of the more promising techniques for efficient hydrogen production from renewable energy sources, emitting only oxygen as a byproduct, without any carbon emissions.
Plug’s five-megawatt electrolyzer system will be manufactured at its “Gigafactory” in Rochester, N.Y. The factory is considered the world’s first and largest manufacturing facility of its kind for the technology.
In creating a commercial market for hydrogen fuel cell technology, Plug has already deployed more than 50,000 fuel cell systems and over 165 fueling stations, becoming a leader in PEM electrolysis technology and securing the world’s largest electrolyzer order to date, from H2 Energy Europe, in May.
Carson said work at Irving will now move toward taking delivery of the electrolyzer later next year. That involves a lot of preparation beyond finalizing its location and building out the interconnections with the refinery itself.
“This is all going to be an enormous amount of work in the 12 or so months ahead,” stated Carson. He said the construction and operation of the unit will have “a positive employment effect” over the next year.
Working on emissions targets
Carson said the move will allow Irving Oil to achieve a net reduction in emissions at the refinery in proportion to the amount of hydrogen the refinery is able to produce through the new electrolyzer. He called it “an important first step” in Irving’s emission reductions objectives.
It comes on the heels of Irving Oil’s purchase of Renewable Energy Certificates from Saint John Energy to track how much of its power comes from renewable sources.
That move will decarbonize all of the electricity supplied into Irving Oil’s operation by the local utility, transitioning more than 30 of its properties within the city to wind energy.
Irving also aims to reach its 2030 emissions reduction goal by investigating a portfolio of initiatives on top of this week’s hydrogen expansion. Carson expressed hope that Irving may be able to announce similar opportunities in the future.
Tyler Mclean is a reporter with Huddle, an Acadia Broadcasting content partner.
