TES Canada CEO assures that the green hydrogen megaproject in Mauricie will serve to decarbonize

The CEO of TES Canada assures us that the green hydrogen megaproject in Mauricie will serve to decarbonize two sectors that are difficult to electrify: industry and heavy transportation. And this, in Quebec. However, he agrees that no agreement with buyers guarantees this ambition.

Nearly a year after its announcement, the $4 billion green hydrogen project is moving forward with great strides: TES Canada is signing contracts to install wind turbines, it is launching calls for tenders for its electrolyzers, and it is building a collaboration with Hydro-Québec. Consultations by the Bureau d’audiences publiques sur l’environnement (BAPE) are to take place next year.

The promise: to produce 70,000 tons of green hydrogen each year, starting in 2028, to replace fossil fuels. To generate this clean gas, water molecules are split with electricity. The Shawinigan plant must be powered by self-production of wind (800 megawatts) and solar (200 MW) energy, and 150 MW from Hydro-Québec.

Two weeks ago, Hydro-Québec CEO Michael Sabia suggested to parliamentarians that more effort—and megawatts—were needed to be put into decarbonizing Quebec businesses. “Well, that’s exactly what we want to do,” says Éric Gauthier, the head of TES Canada, in an interview with THE Duty.

The project, which is expected to consume as much electricity as Longueuil, is taking off as everyone is fighting over Quebec energy. Producing green hydrogen involves considerable energy losses: from 25% to 40% of the electricity used, depending on the situation. Experts therefore advise that it be used in a finely targeted manner.

“People will say: if we use this to heat a house in Westmount, it makes no sense from an energy perspective, it’s an abomination. Yes, we agree, that’s for sure!” confirms Mr. Gauthier. “Our solution is not a solution to decarbonize everything,” he acknowledges. TES targets two clienteles: heavy trucking and the industrial sector. It wants to reduce their emissions by 800,000 tonnes of CO2 per year.

To allocate megawatts to green hydrogen projects, the Quebec Ministry of Economy, Innovation and Energy requires that the molecule be used in a “priority sector”: heavy transport, industry (metallurgy, refining, green chemistry) or energy storage. “The injection of hydrogen into the gas network is not a priority sector,” the ministry states on its website.

No warranty

To supply industrial customers, TES Canada had to find a way to get its clean gas to them. Zigzagging tanker trucks from one end of the province to the other would have hurt its profits. So the company opted for a 20-year partnership with Énergir. Two-thirds of its production will be injected into the gas distributor’s network — despite the ministry’s instructions to the contrary.

Before being injected into the pipeline, TES’s hydrogen will be transformed into methane to facilitate its adoption by plants. It will then become “renewable gas”, chemically identical to natural gas. However, this transformation wastes 20% of the energy. TES plans to recover a good part of these losses by recovering the heat from the process.

With this contract, Énergir will approach the regulatory target of 10% renewable gas in its network by 2030. It already injects methane from organic waste and slurry. Its customers who buy renewable gas can claim a better carbon footprint, but in practice, they receive the same gas mixture as the others.

There is no guarantee that all of TES’s renewable gas will be sold to plants that are difficult to electrify. “We have no guarantee,” admits Mr. Gauthier. The sale of the gas will be Énergir’s responsibility. The company director believes that the high price of renewable gas will push residential customers to electrify rather than consume it. “This program forces players to make the right decisions,” he says.

At Énergir, we also believe that industrialists will be the largest users of renewable gas. They currently consume 60% of the volumes, compared to 3% for the residential sector. “We cannot guarantee that renewable natural gas from TES Canada will only be purchased by industrial customers,” agrees Alexandra Desrochers-Vaughan, a spokesperson.

Replace 2000 trucks

In addition to the industrial component, TES is interested in trucking. Because they travel long distances, heavy-duty vehicles are more difficult to electrify than cars. Hydrogen trucks — an existing technology, but absent from Quebec — represent a solution to decarbonize this mode of transportation, according to Mr. Gauthier.

The Shawinigan company wants to devote a third of its hydrogen production to powering 2,000 trucks. Its location at the centre of the Montreal-Quebec City corridor is an asset. Mr. Gauthier says that currently, a hydrogen truck costs only 20% or 30% more — for purchase, maintenance and refueling for five years — than a diesel truck.

The company is in talks with many players in the field, but has not signed any sales contracts. “It’s like with diesel: Esso doesn’t sell to a customer five years in advance,” explains Mr. Gauthier. We have term sheets [listes de conditions] with three players. We would sell them our hydrogen, and they would resell it in their network of stations. These will be short-term contracts.”

Discussions with Hydro-Québec

To power its electrolyzers, TES Canada will build 130 wind turbines and a solar farm the size of 700 soccer fields. In August 2023, the project was also awarded 150 MW by Minister Pierre Fitzgibbon. However, the government set one condition: TES must give up its power block for 160 hours per year, during very cold weather.

In fact, during these peaks in demand, TES plans to suspend its hydrogen production and sell its renewable electricity to the state-owned company. However, the company does not intend to supply Hydro-Québec to a greater extent. “We make our money by selling hydrogen,” Mr. Gauthier points out.

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