On April 7, The Government of Ontario released its Hydrogen Strategy that aims to set the province up to be a leader in the hydrogen sector. The world is adopting hydrogen as an alternative energy carrier and Ontario has the capabilities to become a hydrogen economy hub.
OSPE has been advocating for the Provincial government to undertake a strategy that bolsters the resources and talent that caters to our green economy. In 2021, OSPE submitted a response to the call for consultation on the Ontario Low Carbon Hydrogen Strategy, using the expertise from our members to shape our advocacy position.
The Strategy sets out a vision for a low-carbon hydrogen economy in our province – one where we can leverage our many strengths to develop a self-sustaining sector in Ontario, evolve our energy system, create local jobs and attract investment while reducing greenhouse gas (GHG) emission.
A recommendation OSPE advocated for is the implementation of low-cost electricity with a pricing mechanism that supports the switch to a clean power system now in Ontario. Along with a new pricing policy, OSPE pushed for a commitment to support R&D within the province. OSPE is pleased to see a new reduced electricity rate to support low-carbon hydrogen production included in the overall strategy with a commitment to support further hydrogen research in the province.
Our province’s current advantages include:
- Open for Business: Ontario has a highly skilled workforce, global hydrogen technology manufacturers and many established industrial sectors that can support growth of the province’s low-carbon hydrogen economy (e.g., cleantech, steel, auto manufacturing and chemicals).
- Clean, Reliable and Affordable Electricity System: Ontario’s electricity system is among the world’s cleanest with very low emissions. In addition, Ontario now has competitive electricity rates for large electricity consumers through several programs that could benefit hydrogen producers, particularly by using off-peak electricity.
- Existing Storage and Pipeline Infrastructure: Ontario has existing and planned pipeline and storage infrastructure that can be used to store hydrogen and deliver it to homes and businesses. This includes geological storage opportunities and an extensive natural gas distribution network.
- Enabling Regulatory Environment: Ontario is prioritizing red-tape reduction to attract investment and create jobs. Ontario’s regulatory framework for fuels has already enabled a pilot project to blend hydrogen into natural gas pipelines, as approved by the Ontario Energy Board (OEB) with support from the Technical Standards and Safety Authority (TSSA).
- Clean Biofuel Resources: Ontario’s rich forest, agricultural and municipal biomass resources could be used to create low-carbon hydrogen or other renewable fuels. This includes using diverting waste streams from these sectors, as well as material from sustainably managed forests and purpose-grown crops.
Ontario also recognizes the importance of working with the federal government and other provinces and territories to advance commercial development of hydrogen. This strategy calls on the federal government to offer tangible supports and partnerships with the province including funding and risk-sharing opportunities, clear and efficient regulations that are harmonized across leading jurisdictions and support for innovation. Below is a summary of Ontario’s Low Carbon Hydrogen Strategy.
To become a leader in the low-carbon hydrogen economy, Ontario’s strategy is guided by the following objectives:
- Generate Economic Development and Jobs: Capitalize on Ontario’s competitive and regional advantages, including our talent, infrastructure and resources, to accelerate growth in Ontario’s low-carbon hydrogen economy.
- Reduce Greenhouse Gas Emissions: Support our Made-in-Ontario Environment Plan targets to reduce GHG emissions by encouraging the use of low-carbon hydrogen.
- Promote Energy Diversity: Consider how low-carbon hydrogen can cost-effectively support Ontario’s evolving energy system and build redundancies through electricity storage and clean fuel supply.
- Promote Innovation and Investment: Enable opportunities for low-carbon hydrogen use and position Ontario as a leading destination for investment.
- Strengthen Collaboration: Work with the private sector, the federal government, municipalities, Indigenous communities, academic institutions and other stakeholders to grow and sustain a low-carbon hydrogen economy in Ontario.
Ontario organizes their plan with eight concrete and immediate actions are expected to lead to an eight-fold increase in the province’s production capacity of low-carbon hydrogen and support the nascent market to meet its potential. Ontario’s strategy is grounded in immediate actions to enable production and expand the low-carbon hydrogen economy in our province:
- Launching the Niagara Falls Hydrogen Production Pilot: Atura Power proposes to produce hydrogen in Niagara Falls using electricity from the Sir Adam Beck hydroelectric generating station as part of its grid regulation services to Ontario’s electricity system. The government filed a regulatory exemption to the Gross Revenue Charge (GRC) for electricity used by this project.
- Identifying Ontario’s Hydrogen Hub Communities: Atura Power is working to identify additional strategic locations across the province for hydrogen “hubs” where low-carbon hydrogen demand can be matched by low-carbon hydrogen production that leverages existing electricity infrastructure and Ontario’s clean electricity grid. The Ministry of Energy will also undertake its own third-party led feasibility study to explore opportunities to establish new low-carbon hydrogen or clean fuel hubs in Ontario.
- Assessing the Feasibility of Hydrogen Opportunities at Bruce Power: Bruce Power will launch a feasibility study to explore opportunities to leverage excess energy from the Bruce Nuclear Generating Station for hydrogen production and support a centre of excellence in the region.
- Developing an Interruptible Electricity Rate: Ontario will be working towards reducing electricity rates to support low-carbon hydrogen production through a proposed Interruptible Rate pilot that would offer large electricity consumers reduced electricity rates in exchange for reduced consumption during system or local reliability events. The Ministry of Energy will also undertake consultations on other electricity rates that could help to further grow Ontario’s low-carbon hydrogen economy.
- Supporting Hydrogen Storage and Grid Integration Pilots: Ontario will ask the Independent Electricity System Operator (IESO) to report back on program options to support hydrogen storage and grid integration pilot projects.
- Transitioning Industry Through the Use of Low-carbon Hydrogen: Ontario is taking immediate steps to support the efforts of industry to phase out their use of coal by transitioning to low-carbon processes and hydrogen-ready equipment. For example, Ontario is contributing $500 million in support to the $1.8 billion project by ArcelorMittal Dofasco at its Hamilton facility to replace coal-fed furnaces with a hydrogen-ready electric arc furnace (EAF). This project will reduce GHG emissions by about three million tonnes annually.
- Consulting on an Ontario Carbon Sequestration and Storage Regulatory Framework: Ontario is proposing changes to the Oil, Gas and Salt Resources Act and the Mining Act frameworks to enable carbon storage activities on Crown land. Carbon sequestration offers the opportunity to produce low-carbon hydrogen using natural gas.
- Supporting Ongoing Hydrogen Research: Ontario is supporting two independent hydrogen research projects in partnership with Natural Resources Canada to advance hydrogen development in the province.
A focus for OSPE is the pressing climate crisis, mobilizing our members, stakeholders and government to utilize the expertise of engineers to innovate solutions. OSPE is pleased the Provincial government is not only looking at alternatives to fight climate change but also working to boost our economy as a national and global leader.