John Risley’s World Energy GH2 has abandoned plans for a green hydrogen and ammonia plant in Stephenville, Newfoundland, acknowledging that clean hydrogen production costs remain prohibitively expensive for consumers compared to natural gas-derived alternatives.
The billionaire developer now proposes a $16 billion subsea and overland transmission network connecting Atlantic provinces to Quebec, targeting wind power exports to northeastern United States markets through Hydro-Québec.
The project collapse follows a pattern documented across the hydrogen sector where promotional announcements, government subsidies, and high-profile political endorsements precede acknowledgment of fundamental economic unviability. Then-German Chancellor Olaf Scholz visited Stephenville in 2022 to sign a memorandum of understanding for a transatlantic green hydrogen corridor intended to displace Russian energy following Ukraine’s invasion, an objective that failed to materialize as cost realities emerged.
Economic Fundamentals and Buyer Absence
Risley’s admission that World Energy GH2 never identified buyers for the proposed hydrogen or ammonia output reveals critical gaps between project promotion and commercial substance. A venture receiving substantial media coverage, political validation, and a $128 million Export Development Canada credit facility proceeded through environmental assessment without securing offtake agreements that typically precede final investment decisions in commodity projects.
The 4,000-page environmental assessment for Project Nujio’qonik documented technical specifications for what would have constituted one of the world’s largest green hydrogen facilities, yet this regulatory process occurred absent commercial fundamentals justifying the investment. The sequence indicates either extraordinary optimism about future market development or promotional activity disconnected from project economics, with the former interpretation requiring belief that buyers would emerge despite cost differentials rendering the product uncompetitive.
Export Development Canada’s credit facility terms remain undisclosed, including drawdown amounts, interest rates, security arrangements, and whether obligations transfer to the transmission project or face write-off through bankruptcy proceedings. This opacity prevents assessment of taxpayer exposure and whether federal support facilitated genuine project development or subsidized feasibility studies for commercially unviable ventures.
The federal green hydrogen and green ammonia investment tax credit, providing 15% to 40% direct capital cost subsidies depending on emissions intensity, applies only to equipment purchases rather than development expenses. Whether World Energy GH2 drew any ITC funds depends on whether major equipment, including electrolyzers, was actually procured, information not publicly disclosed. The absence of equipment purchase orders for a project reaching advanced assessment stages suggests development remained speculative despite government financial commitments.
Transmission Project Economics and Market Assessment
Clean Grid Atlantic, the 50-50 partnership between Risley’s interests and Pattern Energy owned by Canada Pension Plan Investment Board, proposes spending over $300 million before reaching the final investment decision within 12 to 18 months. This pre-FID expenditure parallels hydrogen project development costs but targets a different end product with distinct market characteristics.
The transmission concept envisions five gigawatts of onshore Newfoundland wind capacity combined with five gigawatts of offshore Nova Scotia wind, channeling power through subsea and overland lines to Hydro-Québec for export to the northeastern United States. The proposed Port au Port Peninsula wind farm, originally feeding the hydrogen plant with up to one gigawatt capacity through 150 turbines, would constitute one-tenth of total Newfoundland capacity under this revised configuration.
Hydro-Québec confirmed discussions with multiple Atlantic province stakeholders, including Clean Grid Atlantic, though confirmation of talks differs substantially from execution commitments or offtake agreements. Quebec’s role as a transmission intermediary to US markets creates dependencies on both Hydro-Québec’s willingness to wheel power and US market access at prices justifying the infrastructure investment. The northeastern US electricity markets exhibit characteristics including capacity auctions, renewable energy credit values, and wholesale price dynamics that determine whether Atlantic wind exports achieve competitive positioning.
Comparative Project Viability and Market Readiness
Risley characterizes the transmission proposal as more feasible than hydrogen, given identified buyer interest, though specifics regarding committed volumes, pricing terms, or contractual timelines remain undisclosed. The distinction between “interest” and binding purchase commitments matters substantially for infrastructure projects requiring multi-billion dollar capital deployment with payback periods measured in decades.
Transmission projects face regulatory approvals across multiple jurisdictions, environmental assessments for subsea cable routes and overland corridors, First Nations consultations, utility interconnection agreements, and cost allocation negotiations determining who bears infrastructure expenses. The 12 to 18 month timeline to final investment decision appears aggressive given these requirements, particularly for projects spanning provincial boundaries and requiring federal involvement through major projects acceleration mechanisms.
The statement that “finding the capital won’t be a problem” once business cases prove viable reflects confidence that differs from documented experience with large transmission projects experiencing cost overruns, schedule delays, and financing challenges. Atlantic Link, a previous proposal for Newfoundland-Nova Scotia transmission, faced abandonment after failing to demonstrate economic viability, creating precedent questioning whether current proposals address fundamental obstacles that defeated earlier attempts.
Employment Claims and Economic Impact Assessment
Risley’s assertion that transmission and wind farm construction would “more than replace all of the jobs in the offshore” requires scrutiny regarding employment duration, skill requirements, wage levels, and geographic distribution. Offshore oil sector employment in Newfoundland provides long-term operational positions with established career pathways and wage structures, while transmission construction creates temporary jobs concentrated during building phases with limited ongoing maintenance staffing.
The hydrogen plant promised “hundreds of long-term, well-paid jobs” in Stephenville that have now evaporated alongside project cancellation. The substitution of transmission construction employment for permanent facility operations represents different economic impacts, with construction jobs providing near-term income but lacking the sustained payroll and supply chain spending that operational facilities generate over multi-decade lifespans.
Wind farm operations require minimal ongoing staffing relative to construction workforces, with modern turbines designed for remote monitoring and scheduled maintenance by small technical teams. The employment multiplier from 10 gigawatts of wind capacity across Newfoundland and Nova Scotia would concentrate during construction, with modest operational staffing subsequently, creating boom-bust patterns rather than sustained economic development.
Policy Implications and Subsidy Effectiveness
The hydrogen project’s collapse after receiving federal credit facilities and developing through environmental assessment to the point of political endorsement raises questions about government due diligence processes and subsidy allocation effectiveness. Whether Export Development Canada and federal officials conducted market assessments confirming buyer interest before extending financial support affectsthe evaluation of institutional competence and accountability for public resource deployment.
The pattern where promotional hydrogen projects announce ambitious targets, secure government backing, proceed through regulatory processes, then acknowledge economic unviability after consuming development capital and policy attention, suggests systematic issues in project gatekeeping and subsidy conditionality. Requiring demonstrated offtake agreements as prerequisites for public financial support would prevent speculative ventures from accessing taxpayer resources while enabling genuine projects with commercial foundations to proceed.
Risley’s acknowledgment that hydrogen “will be part of the equation one day, we just don’t know when” reflects industry rhetoric positioning current unviability as temporary rather than fundamental. Whether hydrogen costs decline sufficiently to achieve competitiveness with alternatives depends on electrolyzer costs, renewable electricity prices, utilization rates, and competing technology trajectories that could maintain or widen cost gaps despite targeted improvements.
Regional Development Strategy and Risk Assessment
Newfoundland’s economic development strategy, incorporating offshore wind, hydrogen production, and now transmission export,s reflects attempts to leverage renewable resources for industrial activity and export revenue. The succession of proposals from different developers and configurations suggests searching for viable business models rather than executing predetermined plans with established economics.
Western Newfoundland residents facing successive project announcements and cancellations develop warranted skepticism about commitments, as Risley acknowledges. The social license and community support necessary for major projects erode through repeated cycles of promotion and abandonment, creating obstacles for future legitimate developments requiring local cooperation and regulatory approvals contingent on demonstrated community benefit.
The transmission proposal’s viability depends on whether it addresses fundamental obstacles that prevented earlier iterations or simply repackages concepts with modified routing and different proponents. Nova Scotia’s continued reliance on coal-fired generation for approximately 50% of its electricity supply creates an environmental rationale for wind imports through transmission infrastructure, though whether such imports prove cost-competitive with alternatives, including indigenous renewable development, energy efficiency, or natural gas conversio,n requires comparative analysis.
Pattern Energy’s involvement through Canada Pension Plan Investment Board ownership adds institutional credibility relative to pure developer promotion, though whether CPPIB commits capital beyond development spending depends on risk-return assessment and portfolio allocation strategies that prioritize pensioner returns over regional development objectives or political considerations. The 50-50 partnership structure distributes risk but also requires aligned interests between partners with potentially divergent priorities regarding project timing, risk tolerance, and return thresholds.
