Ontario Government Announces Low Carbon Hydrogen Strategy

Today Ontario Minister of Energy Todd Smith announced the introduction of Ontario’s Low-Carbon Hydrogen Strategy – A Path Forward.

“Since taking office, our government has worked to make Ontario the best place to build
the industries of the future. By reducing electricity costs, lowering taxes and cutting red
tape, we have significantly reduced the cost of doing business and have seen companies and investments flow into our province” said Minister Smith.

The report charts a path where 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 the province:

  1. 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.
  2. 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.
  3. 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.
  4. 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.
  5. 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.
  6. 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.
  7. 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.
  8. 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.

The Minister reports that the government heard from businesses, industry experts, academic institutions and people across the province during an extensive consultation process.

HRAI will follow the progress on these initiatives through the work of its Emerging Trends Committee and will explore their implications for the HVACR industry.

The report is available online at https://ontario.ca/page/ontarioslow-carbon-hydrogen-strategy.
 

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