Hy2gen Canada Inc. has been awarded a block of renewable energy for its projected $2 billion green hydrogen and ammonia plant to be built in Baie-Comeau, Que.

The electricity will be supplied by Quebec's provincial utility, Hydro-Québec, subject to final agreement with Hy2gen Canada, the wholly-owned Canadian subsidiary of Hy2gen AG, based in Wiesbaden, Germany.

The energy deal represents a pivotal step enabling Hy2gen to proceed with the launch of a $30-million engineering study for the company's flagship 300-megawatt Baie-Comeau "Courant" project.

Once operational, the plant will have a production capacity of approximately 240,000 tonnes of green ammonia per year.

Hy2gen Canada expects to begin construction work on the facility in the second half of 2026 as part of its plan to start producing green ammonia by 2029 under the proviso that Hydro-Québec will be on track to deliver the requisite renewable power to the facility at that time.

Baie-Comeau was chosen as the site for the plant due its proximity to many of Quebec's major off-takers for green ammonia. This renewable fuel helps reduce carbon emissions involved in the production of chemicals and other products connected to the mining industry.

The green ammonia to be supplied by the Baie-Comeau plant is intended primarily for applications related to the Quebec mining sector and part of the province's overall commitment to reducing its carbon footprint.

Hy2gen aims to become global renewable energy player

The facility is first of several projects Hy2gen expects to launch in North America and Europe as part of its strategic goal of becoming a global player in the renewable energy field. 

Founded in 2017, Hy2gen AG is the owner of the world's largest operating power-to-eMethane plant in Werlte, Germany, and recently announced it will be part of a consortium building a $1.5-billion eSAF (electro-sustainable aviation fuel) production plant in Fos-sur-Mer in southeastern France.

This multi-pronged approach to becoming a sustainable energy supplier is led by Hy2gen's CEO Cyril Dufau-Sansot. He is paving the way for the company to expand its operations by building a vast array of green hydrogen, SAF and similar plants now in development in Germany, France, Norway, Canada, and the U.S.

Baie-Comeau is central to Hy2gen's long-term strategy 

The Quebec green ammonia plant is expected to reduce carbon-intensive imports within the province's thriving mining sector.

"In Quebec, we have found a viable business case based on the current situation of the mining industry which is obliged to import a lot of products. By skipping the importation costs, we can bridge the gap for producing sustainable molecules," Dufau-Sansot said in an interview with Sustainable Biz Canada.

The Baie-Comeau project lies at the heart of Hy2gen's strategy to develop "three or four digit megawatt size hydrogen plants" geared towards producing green hydrogen, green ammonia, methanol, SAFs and derivatives.

"The plant is a decisive step for us," added the Hy2gen CEO. "We want (Baie-Comeau) to serve as a blueprint and be able to duplicate its operations in locations around the world and scale up based on this modular capacity.

"In Quebec, the availability of cheap renewable electricity makes it ideal for producing green ammonia. In France or Germany, for instance, electricity is more expensive . . . We need to look towards producing the higher value molecules."

The award of the energy supply contract by Hydro-Québec allows Hy2gen to scale up its operations in Quebec by proceeding with the "detailed engineering and design" phase that will determine whether the company gives the green light to begin construction of the plant in 2026 as planned.

"This means that Baie-Comeau will be the first Hy2gen project to enter into the construction phase with such a huge investment, which in this case is almost $2 billion," Dufau-Sansot explained.

"This power allocation from Hydro-Québec will further enable us to operate 24/7 so we don't need to stick to the production profile of wind and solar. Therefore we will be able to operate 95 per cent of the time over the course of a year, allowing us to maximize plant output."

Quebec anxious to keep green ammonia production at home

Quebec has long been known for its vast aluminum, iron ore and gold mining operations, and is also believed to be an important store of critical minerals including lithium, nickel, graphite, copper and rare earths elements. 

The impending exploitation of these vital metals will require a commensurate effort to reduce the carbon footprint of the industry despite its inevitable expansion.

Awarding the energy supply contract to Hy2gen Canada is further confirmation of the Quebec government's determination to establish its own circular green energy and industrial ecosystem. 

As part of the stipulations regarding Hy2gen's bid for the energy supply deal, the company was obliged to commit its production of green ammonia exclusively for supply within the province rather than for export.

"Quebec wants to use its energy not for export purposes but to decarbonize Quebec industries and in particular its mining sector," Dufau-Santot said. He believes that demand for green ammonia in the province is virtually unlimited.

"The mining sector in Quebec is expanding rapidly and the number of mines in operation will double by the end of the decade."