(Reuters) – EverWind Fuels, a company founded by private equity veteran Trent Vichie, told Reuters it became the first green hydrogen producer in North America to secure the necessary permits for a commercial-scale facility on Tuesday.
Provincial authorities in Canada granted environmental approval for EverWind to begin converting a former oil storage facility and marine terminal at Point Tupper in Nova Scotia into a green hydrogen and ammonia production hub.
Green hydrogen is different than conventional hydrogen only in its production; it is made by running water through electrolysers to separate the hydrogen and oxygen atoms, with the equipment powered by renewable energy so the process does not generate carbon emissions that exacerbate climate change.
Hydrogen is used in transportation, industrial processes and to make fertilizers. The fuel’s green form is being incorporated by many governments into their future energy plans, given its potential to help reach emission-reduction targets.
While green hydrogen is currently more expensive to produce than hydrogen from fossil fuels, the cost is expected to decline as the electrolysis technology develops.
EverWind expects the project’s first phase, producing and exporting 200,000 tonnes per annum, to be online in 2025, before ramping up to 1 million tonnes per annum the following year. The company has agreements with German energy firms E.ON (EONGn.DE) and Uniper (UN01.DE) to acquire the production.
“To get the permit is a big deal,” said Vichie, who co-founded Stonepeak Infrastructure Partners and also worked at Blackstone Inc (BX.N).
Most of the world’s green hydrogen production currently happens in China, although total supply accounted for less than 1% of global hydrogen production in 2021, according to the International Energy Agency.
The green hydrogen produced by EverWind’s facility will be combined with nitrogen and converted into ammonia before being shipped, in liquid form, in tankers to Germany, where it can be retained as ammonia or turned back into green hydrogen.
Production during the facility’s first phase will be powered using wind and solar assets to be built nearby, Vichie said. The company in December leased 137,000 acres (55,440 hectares) which will eventually site turbines generating 2 gigawatts of wind energy, that will power production in its second, larger phase.
“This provides an amazing green growth path for Atlantic Canada, where they have some of the world’s best wind resources,” Vichie said.
The overall cost of the project is expected to be around $6 billion. Three banks are helping arrange debt funding, while Vichie’s family office is providing equity capital, he said.
Also invested in the project are development corporations belonging to three First Nation bands in Nova Scotia: the Membertou, Paqtnkek and Potlotek. EverWind is also working with the bands on a benefits agreement for the indigenous communities that would include jobs at the facility, Vichie added.
The project will also benefit from tax credits the Canadian government announced in November to support investments in renewable energy, including hydrogen.