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Andrew Parsons discusses wind energy letters


Minister Andrew Parsons (Industry, Energy and Technology) spoke about the recent Crown land approvals for the four wind energy projects. — File photo

By Jaymie White Local Journalism Initiative Reporter ST. JOHN’S — On Wednesday, Aug. 30, the Department of Industry, Energy and Technology (IET) announced that four companies that would be moving forward in the wind-hydrogen process. Resulting from the completion of the call for bids for wind-hydrogen development in the province, the companies that will receive Wind Application Recommendation Letters are: · EverWind NL Company; · Exploits Valley Renewable Energy Corporation; · Toqlukuti’k Wind and Hydrogen Ltd. (ABO); and · World Energy GH2 Inc. The IET statement also outlined next steps for the process. “The issuance of recommendation letters to four bidders is the next step in the development of a wind-hydrogen industry in the province. These four companies now have the right to pursue the development of their project and can proceed through the Government of Newfoundland and Labrador’s Crown land application and approval process. “The construction, operations and decommissioning phases of these four projects (ranging from 35 to 40 years) are anticipated to have an overall economic impact (GDP) of $206.2 billion, and revenue to the province of $11.7 billion. Based on the plans for the four projects, peak employment is estimated at 11,694 full-time equivalents during construction. Total capital spend is estimated at $66.3 billion. “Projects will be required to have benefits plans with the province, including commitments to full and fair opportunity as well as a gender equity and diversity plan that outlines proactive measures for the inclusion of women and other under-represented groups. “Bids were subject to a two-phase assessment conducted by an evaluation committee, with representation from Industry, Energy and Technology; Finance; Indigenous Affairs and Reconciliation; Newfoundland and Labrador Hydro; a third-party Financial and Business Analyst (EY); a third party Technical Advisor (Power Advisory); a third party Project Management Analyst (EY); and a Fairness Advisor (Optimus SBR Inc.). “Environmental Assessment registration is required prior to final award of Crown land and an environmental assessment will be required for these wind projects. “Requests for connection to the provincial electricity grid to support hydrogen production and/or rates other than published rates will be subject to the PUB regulation. “The Provincial Government is committed to continuing to work with the companies that were not successful in this round and they will have opportunities in the future to apply, either through private lands or future calls for bids.” IET Minister Andrew Parsons believes this to be a positive move for the province. “Newfoundland and Labrador has some of the best onshore wind resources in North America, which can be used to power wind turbines and generate electricity for industrial users/customers, export through transmission lines and the production and export of hydrogen/ammonia,” said Parsons. “I am pleased that these four projects have been independently reviewed and determined to provide the overall greatest benefits to the province. I look forward to these projects moving through the next stages of review and am excited about the economic benefits these projects will bring to the province in the years to come.” The following day, on Aug. 31, World Energy GH2 announced their crown land approval and what this means for Project Nujio’qonik on the province’s west coast. “The land approvals marks the company’s latest major achievement and propels Project Nujio’qonik forward on its path to becoming the first commercial-scale green hydrogen project in North America, and one of the first projects of its kind in the world. The Project already owns the Port of Stephenville, which includes the land for the plant facility. With the confirmation of Crown land for the total project area, this now confirms both Site Control Milestones have been met. “Development of Project Nujio’qonik is planned for the west coast of Newfoundland and Labrador (NL), initially comprised of two 1GW wind farms, and a hydrogen / ammonia plant in the Port of Stephenville. The Project will be among the world’s first wind-to-green-hydrogen projects at commercial scale with green hydrogen production beginning in late 2025. In addition to the two initial wind farm approvals, the Crown Land award includes two additional areas, for a total of 4GW of buildable wind farm areas in the immediate vicinity of the proposed plant site at the Port of Stephenville. “Crown land leases are contingent upon proponents completing the provincial Environmental Assessment process and Project Nujio’qonik is currently the only green hydrogen project in NL that has conducted required analysis and submitted an Environmental Impact Statement (EIS) requiring over 15 months of field and desktop studies; an EIS is the most stringent Environmental Assessment level in the province. “World Energy GH2 has secured Crown land approval for sites in Port au Port and the Anguille Mountains/Codroy area for the initial phases of the Project, and has also gained approval for expansion sites in the Long Range Mountains and along the Burgeo Highway. The Company will begin a consultation and engagement process with communities in and near the future expansion site areas.” Sean Leet, Managing Director and CEO of World Energy GH2, also spoke about the decision. “Project Nujio’qonik is building significant momentum locally and globally. This past spring, we acquired the Port of Stephenville, and signed a USD $50M investment agreement with SK ecoplant. Earlier this month, we submitted a comprehensive Environmental Impact Statement (EIS), we’ve now completed our pre-FEED (front-end engineering and design) work and are regularly discussing plans with potential suppliers, vendors and customers. We have also made progress in our relationship with the Qalipu First Nation and local community bands, now working toward development of definitive agreements. The next major milestone for Project Nujio’qonik will be the province’s response to the project’s Environmental Impact Statement (EIS). We expect the province’s response this fall. We also look forward to further details from the federal government regarding the Clean Hydrogen Investment Tax Credit (ITC) coverage and Contracts for Difference (CFD) mechanisms required to stand up this new clean energy industry in Canada.” Because of this approval, Chairman of World Energy GH2, John Risley, said the Canada-Germany Hydrogen Alliance signed in Aug. 2022, is clearly advancing. “Last August, we hosted Prime Minister Trudeau and German Chancellor Scholz at our project site in Stephenville,” said Risley. “One year later, Project Nujio’qonik is on track to help fulfill Canada’s green hydrogen commitments, and to produce green hydrogen in 2025. Newfoundland and Labrador – and Canada – have the opportunity to become a global leader in production, application and exporting green energy. Let’s make it happen.” Throughout this approval process, surprisingly, the Department of Environment and Climate Change were not on the evaluation committee, but Parsons said there is a reason for that. “They were not, and neither was the Department of Fisheries, Forestry and Agriculture (FFA). They are actually responsible for Crown land so they would have been a part of the initial phase one, which is early on, but they were not part of the Phase Two evaluation committee because it would have been a conflict in the sense that it would have, as they say, fettered their right as a department to make these decisions as it relates to environmental assessments or crown land applications,” explained Parsons. “So now they are involved, now that the award has been made in terms of these four proponents have the sole discretion to move forward, but they have to deal with the environmental assessment and the actual Crown Land application, which is not done yet.” While those specific departments not involved, there were numerous other entities that participated. “It would be hard for them to be involved in a process, which they would then be involved with again in determining the environmental feasibility as well, as should these proponents actually be given the Crown Land. So the process we had there was our Department of Finance, Indigenous Affairs, Newfoundland and Labrador Hydro, and we had a fairness advisor and three other technical, financial third parties brought in for their expertise,” said Parsons. “What I announced last week (August) was that these four proponents would be given the exclusive right to go ahead with wind projects on these particular lands. Now, that once we made that award, though, similar to any other resource project, they have to go through a provincial environmental assessment process, and in this particular case, they have to go through a Crown Land application. Like anybody else who would be applying for Crown Land, they have to go through that process. Part of the process is to reach out to other departments to see, do you have any concerns with this, and that’s where we are now.” There remains much more work to be done yet. “Our department’s process is done. Now it goes to a second or a different stage that we don’t deal with it. We don’t have input on the environmental assessments done by companies,” explained Parsons. Under the current plan, Newfoundland and Labrador will not be using the energy generated, as it will all be exported. “These projects now are for the purpose of creating hydrogen and that hydrogen, right now, there is truly no market for that in Newfoundland and Labrador. We’re not as advanced as, I’ll say Europe is, in terms of using hydrogen for heavy transport or shipping or even building use,” said Parsons. “So right now, that hydrogen primarily will be converted to ammonia, shipped overseas to Europe to be used. Now, in the future, I think that you’re going to see more and more in terms of adaptation to hydrogen technology. I believe there’s even some pilot projects that are on the go, but again, we don’t have an immediate market for that. The other side of it, though, is that with the wind that’s being used, that’s being led by Newfoundland and Labrador Hydro, looking at what are the integration opportunities in terms of bringing that into our electricity grid, that is being worked on and right now, of the four proponents, only one has an electrical need. World Energy, I think, is going to require about 10 gigawatts of power for theirs, and (NL) Hydro says that that is absolutely an option. Whereas in some cases, the power demands in the unsuccessful proponents, one of their biggest issues was that they require too much power from our grid, power that we couldn’t commit to them.” Parsons said the process was quite thorough and extensive. “Number one, we went, and I can’t say it strongly enough, we went through an extremely intensive process here with lots of civil servants, public servants, technical people, outside advisors. We went above and beyond to scrutinize the different projects even more. I would tell anyone to find me another jurisdiction that went through this extensive a process, and I don’t think they’ll find them because they’re not there,” said Parsons. “And then when you look at each of them, all of them have, number one, the financial backing, and the technical capability. Again, it will be on them to have to figure out the economics of making a product that is viable.” Unlike with previous projects in NL, because these endeavours are being funded by the companies themselves, whether they succeed or not rests entirely on them. “I look at this compared to other megaprojects. We have no investment in this, so if they do not succeed — and we want them to succeed because we will also profit from royalties — now, it’s not as profitable as an oil royalty, but if these companies make money, we make money. But in the meantime, if something happens, we do not have any financial stake in this, there’s no provincial taxpayer money going into this now,” said Parsons. “They are going to be looking to the federal government. The federal government is in the process of figuring out financial incentives for green technology, for decarbonization, and I’m supportive of that, and certainly I will lobby on behalf of these proponents that we should get that federal investment in Newfoundland and Labrador. We want that. But when you look at the economic opportunities, when we’re talking about billions of dollars into our treasury that will help pay for social programs, health care, education, when I look at the spin off where we’re talking about the tons of job opportunity and business opportunity just when it comes to spin asset and supply side, and when we’re literally talking about tens of thousands of high skilled, high paid jobs, it’s not a bad thing.”

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