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Energy

Czech Republic to extend coal mining amid high demand

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PRAGUE (AP) — The Czech Republic has decided to reverse plans to halt mining in a key black coal region to help the country safeguard its power supply amid high demand and the energy crunch prompted by the Russia’s war in Ukraine.

Finance Minister Zbynek Stanjura said Thursday that the state-owned OKD company will extend its mining activities in north-eastern Czech Republic until at least the end of next year, with an analysis to be made on a possible further extension until 2025.

The original plans called for mining to be halted there this year, but “demand for black coal is enormous,” Stanjura said.

Some other European Union countries are turning back to coal as a replacement for reduced deliveries of Russian natural gas, threatening climate goals in Europe. Russia has trimmed gas flows to EU countries like Germany, Italy and Austria on top of its gas cutoffs to France, Poland, Bulgaria and others.

OKD’s chief executive, Roman Sikora, said the Czech company was planning to mine 1.3 million metric tons of black coal in 2023.

It will be mostly used for generating power and household heating. Coal-fired power plants generate almost 50% of total Czech electricity output.

The decision came after the European Union agreed to ban Russian coal starting in August over the war in Ukraine and as it works to reduce the bloc’s energy ties to Russia.

The Czech government aims to phase out coal in energy production by 2033 while increasing the country’s reliance on nuclear power.

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Energy

Green Canadian hydrogen not an immediate solution to Germany’s energy worries

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OTTAWA — Some energy experts warn a deal to sell Canadian hydrogen to Germany will serve as only a small, far-off and expensive part of the solution to Europe’s energy crisis.

German Chancellor Olaf Scholz and Prime Minister Justin Trudeau are set to sign a hydrogen agreement in Stephenville, N.L. next week, during Scholz’s official visit to Canada.

A government official speaking on the condition they not be identified confirmed there will be a hydrogen accord signed that is the culmination of months of talks between the two countries.

Stephenville, a port town an hour south of Corner Brook on Newfoundland’s west shore, is the planned home for a zero-emission energy plant where wind power will be used to produce hydrogen and ammonia for export.

The deal between Canada and Germany is expected to make fuel-hungry Germany the first big customer for a first-of-its-kind project in Canada.

Germany was already looking to hydrogen as an energy solution in its climate plan before Russia invaded Ukraine last February. But since that invasion, as Russia attempts to push back against punishing economic sanctions, it has repeatedly threatened Germany’s energy supply.

Germany typically gets about half of its natural gas from Russia and is looking for both short and long-term solutions to wean itself from Russian exports.

Proponents say the hydrogen deal comes at a pivotal time for Canada’s green hydrogen industry, which is still in its infancy.

But some experts also say the fledgling product carries a big price tag and won’t be able to help Germany in the near term. Canada doesn’t yet have the infrastructure to produce large quantities of green hydrogen, or export it great distances.

“The key is you need a lot of associated infrastructure to be built before we can do a large scale export of hydrogen into other countries,” said Amit Kumar, the industrial research chair of the Natural Sciences and Engineering Research Council.

In order to be shipped, the hydrogen would likely need to be cooled into a liquid, loaded into a specially adapted pipeline or tanker, and warmed again when it reached its destination.

The process and infrastructure is expensive, and so is production.

Most hydrogen production globally comes from converting natural gas to hydrogen and carbon dioxide. If the latter is emitted into the atmosphere, the hydrogen is referred to as “grey.” In Canada, the goal is to capture those emissions with carbon capture and storage, which would make the hydrogen “blue.”

Canada has to date been talking up plans to help Germany with new natural gas projects in Atlantic Canada that could one day be converted to blue hydrogen facilities.

But Germany is looking mainly for “green hydrogen,” which is made through splitting water molecules using renewable energy like wind or solar power. That comes at a much higher price.

“You’re looking at anywhere between three to four fold increase in costs,” said Kumar, a faculty of engineering professor at University of Alberta, who was consulted on the drafting of Alberta’s hydrogen strategy.

He said the technology needs to improve and more investment needs to be made before the cost is even relatively comparable with it’s natural-gas derived alternative.

The company behind the Newfoundland project, World Energy GH2, said the first phase of its Newfoundland project should see up to 164 onshore wind turbines built to power a hydrogen production facility. Long-term plans call for tripling the size of the project.

In its proposal, World Energy GH2 said it is on the cutting edge of a new, green industry.

Construction on the first wind farm is supposed to begin next year. That means hydrogen production is still far off, said Paul Martin, chemical engineer and co-founder of the Hydrogen Science Coalition.

“It’ll take years and years and years,” he said. “And then you’ve got the infrastructure problem.”

Martin says the infrastructure costs of producing and transporting green hydrogen don’t add up.

“Honestly looking at it the green hydrogen pitch in Canada for export, it’s disingenuous,” he said.

That’s partially why Canada’s hydrogen strategy involves moving toward “blue hydrogen” before eventually converting to green, Kumar said.

Germany’s strategy, however, clearly favours green hydrogen while the role of blue hydrogen is uncertain, an analysis by Centre for Strategic and International Studies fellow Isabelle Huber shows.

Trudeau and Scholz, who became Germany’s chancellor in December, first discussed hydrogen and Canadian energy exports when Trudeau visited Berlin in March.

At the G7 leaders’ summit in the Bavarian Alps in June, Trudeau spoke at length with other world leaders about how Canada could offer alternatives to nations dependent on Russian oil and gas.

At a press conference at the conclusion of the summit, Trudeau suggested infrastructure used to carry liquefied natural gas could be adapted to carry hydrogen, as one example of how Canada could help.

“We’re also looking medium term at expanding some infrastructure,” Trudeau said, “but in a way that hits that medium-term and long-term goal of accelerating transition — not just off Russian oil and gas — but off of our own dependence on fossil fuels.”

Canadian hydrogen might be just one piece of Germany’s plan to transition off of German gas in a very difficult situation, said Sara Hastings-Simon, who directs the masters of science in sustainable energy development at the University of Calgary.

“It’s not the be all end all, it’s neither going to fix it completely or be the single answer,” she said in an interview.

This report by The Canadian Press was first published Aug. 16, 2022.

— With files from Mia Rabson

Laura Osman, The Canadian Press

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Alberta

Cenovus Energy to buy remaining stake in Toledo refinery from BP for $300 million

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CALGARY — Cenovus Energy Inc. has reached a deal with British energy giant BP to buy the remaining 50 per cent stake in the BP-Husky Toledo Refinery for $300 million.

The Calgary-based oil producer has owned the other 50 per cent of the Ohio-based refinery since its combination with Husky Energy in 2021.

Cenovus says its U.S. operating business will take over operations when the transaction closes, expected before the end of the year.

The company says the Toledo refinery recently completed a major, once in five years turnaround to improve operational reliability.

It says the transaction will give Cenovus an additional 80,000 barrels per day of downstream throughput capacity, including 45,000 barrels per day of heavy oil refining capacity.

The deal brings Cenovus’ total refining capacity to 740,000 barrels per day.

Alex Pourbaix, Cenovus president and CEO, says fully owning the Toledo refinery provides an opportunity to further integrate the company’s heavy oil production and refining capabilities, including with the nearby Lima Refinery.

“This transaction solidifies our refining footprint in the U.S. Midwest and increases our ability to capture margin throughout the value chain,” he said in a statement.

This report by The Canadian Press was first published Aug. 8, 2022.

Companies in this story: (TSX:CVE)

The Canadian Press

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