Manitoba Hydro’s new opportunity

Opinion

Hey there, time traveller!
This article was published 03/05/2012 (3977 days ago), so information in it may no longer be current.

Deposits of natural gas accessible through fracturing, new oil sources in the Gulf of Mexico, continuing effectiveness of the coal lobby and greater efficiencies in energy consumption have made the U.S. capable of being energy self-sufficient. That is, if oil imports from Alberta are counted as part of “domestic” supply. After all, the U.S. buys it at a discount because the oil-producing Prairie provinces have no other market at present due to transportation limitations.

This changed reality in U.S. demand, despite some growth in GDP since the 2008 financial mess, reflects both energy efficiencies and the availability of alternatives to traditional sources. Even the ethanol initiative, despite taking agricultural land out of food production, has had an impact. Electricity from coal, natural gas and new alternatives continue to frustrate Manitoba’s electrical exports.

The implications for Manitoba are clear: Either suck it up and export less electrical power, or move forward into new business models.

One option involves converting surplus electricity to hydrogen for agriculture, which would improve farmers’ productivity while concurrently reducing Manitoba’s carbon dioxide emissions.

Manitoba has surplus electrical energy, especially overnight. Exporting electricity at cut-rate prices, while importing diesel fuel from Alberta, may not be the only way to shuffle energy options to benefit Manitobans. This diesel fuel source is occasionally interrupted during refinery maintenance shutdowns.

Hydrogen can be made from water: just add electricity. Manitoba’s surplus electricity is dumped (to the U.S.) for about 3.5 cents per kilowatt hour. This electricity could be used during off-peak periods to electrolyze water into hydrogen and oxygen. The hydrogen could be compressed and stored for use in tractors, trucks and combines.

New Holland has an operational 106-horsepower tractor, and is working on a larger one with greater hours of use per tank of fuel. Internal combustion engines can be modified to burn hydrogen, and fuel cells, using hydrogen as a fuel, are getting more robust, more efficient and coming down in price. Unlike electricity, hydrogen-powered equipment produces full power right up until the fuel supply is exhausted.

All the pieces of the puzzle exist. What’s needed is an operating model to produce hydrogen from water, compress and store it in practical containers and a means to transfer it to tractors and other equipment.

Too expensive? Look again: Manitoba Hydro is dumping electricity that costs up to 11 cents per kW-h to produce into U.S. markets for as low as 3.5 cents. Manitoba Hydro is also subsidizing inefficient wind generation. Why not sell the surplus electrical power for hydrogen production and reallocate the wind subsidies to plants designed to electrolyze water into hydrogen?

Opportunities would then exist for farmers or groups of them to develop electrolyzing units in their home areas. The power lines already exist, so diesel-powered fuel trucks will not have to transport fuel long distances. Depending on the size of the electrolyzing units, individual farms might have their own energy production operations (just like in “the old days” when farmers raised the hay needed for their horses). In other scenarios, community development corporations, co-operatives, private operators or possibly Manitoba Hydro could establish local electrolysis operations.

Less carbon dioxide would be emitted due to the clean energy used by local farms (tractors, combines and trucks) and from significant reductions in motorized transportation of fuel to farms and rural areas.

A practical “consortium” composed of a group of farmers, Manitoba Hydro and others should be able to put a prototype into operation fairly quickly. Farm machinery companies might offer experimental tractors and combines for demonstration purposes.

At present cost levels, this option is cheaper, more stable and more energy-efficient, with positive environmental impacts compared to uncertain electrical exports.

Converting 3.5 cent per kW-h to litres, the energy cost of producing hydrogen equivalent to one litre of diesel fuel would be 42 cents. The cost of compression and storage would need to be added and would depend on the nature of the connected components. But if these total additional costs are below 50 cents per litre, hydrogen would be competitive with diesel fuel and less affected by occasional shortages and price fluctuations of global market rates. Any form of carbon tax would increase the attraction to hydrogen use.

Manitoba farmers use about 10 litres of diesel fuel per acre for seeding, fertilizing, spraying, harvesting and hauling grain or seed to market. With some 13 million acres of cultivated land in production, more than 130 million litres of diesel fuel is needed annually. Replacing it with an equivalent amount of hydrogen for the same price or less would cut carbon dioxide emissions (2.64 kg/l) within the province by 343,200 tonnes, a significant benefit.

Given the uncertainties of the North American and world energy markets and the strong supply of electrical power within Manitoba, there appears to be ample justification to explore the hydrogen option for agricultural operations, even if broader hydrogen markets still appear less robust.

Jim Collinson is a strategic energy consultant.