1 Overarching Question What…

1 Overarching Question
What policy options and actions should the government consider in the integrated energy resource plan to achieve Ontario’s vision for meeting growing energy needs, keeping energy affordable and reliable, ensuring customer choice and positioning us to be an energy superpower?

The government should include hydrogen pipelines in its resource plan. Pipelines represent both an energy transmission and energy storage system, both of which are necessary to enable hydrogen-fired power generation. The IESO’s Pathways to Decarbonization document included a large role for hydrogen-fired generation (15,000 MW). In order for hydrogen to play it role in decarbonization of the electricity grid and other energy systems, the development of hydrogen pipelines must be part of the planning now as it is the lowest-cost method of transporting the large volumes of hydrogen that will be required to decarbonize industry, power generation, freight, aviation, and other forms of transportation.

2 Planning for Growth
Building on the recommendations of the EETP’s final report, what actions should be prioritized to enhance planning across natural gas, electricity, and other fuels?

Any new natural gas plants should be built “hydrogen-ready”. Initial construction is the least expensive time to make the transition to hydrogen fuel. If hydrogen-ready turbines and supporting systems are not selected at this point there is the risk of having natural gas assets become unusable shortly into their useful life due to emission reduction imperatives. As part of the proposed Energy Transition Advisory Council, the prioritization of planning a hydrogen pipeline network would allow the Province the ability to develop a flexible and resilient energy system that can adapt to changing emission reduction requirements. Natural gas power plants that are hydrogen-ready and have access to a hydrogen pipeline could switch to hydrogen-fired generation or if more cost-effective at the time could use the hydrogen for carbon capture and utilization.

The government’s priority is to ensure Ontario has the energy resources it needs to support growth. Are there opportunities to enhance the province’s approach to procuring electricity generation supply to better serve this priority?

The establishment of a pipeline network route would provide a hydrogen offtake mechanism for power producers. Power producers would be able to locate hydrogen production equipment at sites along the pipeline and produce hydrogen whenever the grid does not require their power output. In this way, power producers would have a second market for their energy when it is not required by the grid.
What actions should the government consider to promote greater access to electricity and accelerate grid connections that will support economic growth, connecting new homes, and electrifying transportation and heating?

The government should support efficient uses of electricity for heating such as ground and air source heat pumps. The government should require that all technologies are on a level playing field when being considered by homeowners and developers. This might include rebates for high-efficiency electric-base heating systems so that the costs are more in line with natural gas heating equipment where the cost of infrastructure is currently permitted to be amortized far into the future.

As the need for new transmission infrastructure continues to grow, what steps can the government take to ensure that transmitters have the certainty they require to move forward with development work as soon as possible, while also ensuring that competitive pressures keep costs as low as possible?

The government should provide an Economic Development Rate for clean hydrogen production projects with a term of 20 years. Not only would this lower investment risk for project developers, but it would also firm up loading on related transmission systems providing more investment certainty for transmission operators.

Additionally, a hydrogen pipeline network that can transmit hydrogen from areas of production to areas of demand, besides being a more cost-effective way of transporting that energy for hydrogen use would reduce the need for new electricity transmission infrastructure as the hydrogen can then be produced close to generation sources rather than end-use areas.

What policy guidance should the government provide to the Ontario Energy Board (OEB) with respect to the long-term role of natural gas in Ontario’s economy and opportunities for low-carbon alternatives in the gas system?

Natural gas usage in power generation should be minimized to improve the carbon intensity of Ontario’s electricity mix and maintain the clean electricity advantage the province enjoys. Where natural gas use cannot be eliminated, carbon capture should be implemented. Policies should encourage the utilization of the captured CO2 in producing low-carbon, hydrogen-based fuels such as sustainable aviation fuel.
How can the government best support Indigenous leadership and participation in energy planning and projects?

Engaging Indigenous communities from the outset is essential to fostering the leadership and participation required for successful project outcomes. Including Indigenous communities in the approval process for projects, particularly hydrogen pipelines, strengthens community involvement. Reasonable incentive mechanisms should be provided for clean hydrogen producers, distributors (including pipeline transmitters), and end-use applications to encourage partnerships between Indigenous groups and private entities.

How can provincial planning processes be enhanced to support high-growth regions, ensure greater coordination between energy resources, and better integrate municipal, distributor and regional planning processes?

The development of hydrogen pipelines could significantly enhance the delivery of energy to high-growth regions. The approval process for hydrogen pipeline development should be reviewed and streamlined to enable this mode of energy transmission.

What cooperation opportunities exist across other jurisdictions to support energy trade, construction of transmission infrastructure (ex. pipelines and interties), and transportation electrification?

Opportunities for cooperation exist between Ontario and neighbouring jurisdictions such as Quebec and the bordering US states where 3 of 7 announced US hydrogen hubs are planned. The IESO’s Pathways to Decarbonization document outlines substantial imports of hydrogen may be required to meet the 15,000 MW of hydrogen shown. Ontario’s pipeline planning efforts should be aligned with pipeline routing and capacity in neighbouring jurisdictions to ensure that future connections can be made.

What types of technical information and forecasts would best support sector participants and energy consumers as the system is built out for growth and the economy increasingly electrifies?

Information on predicting the total cost of electricity would be very helpful for project developers. Particularly as the electricity system changes in the next few years, being able to properly evaluate costs will be important in ensuring successful project investments.

3 Affordable and Reliable Energy
What further steps should the government take to enable households and businesses to manage and make informed decisions about their energy use?

With respect to businesses, increased electricity pricing predictability over a period of 20 years would sufficiently reduce risk for proponents of hydrogen projects allowing major investments to move forward.
Currently, many households and businesses only focus on their electricity and natural gas usage when making decisions about their energy use. Helping to increase knowledge about alternative energy options such as geothermal and hydrogen will help make households and businesses better equipped to make informed decisions.

What actions could the government consider to ensure the electricity system supports customers who choose to switch to an electric vehicle?

The government should aggressively support the installation of charging infrastructure. Charging infrastructure should be supported in small towns to reduce distances between charging facilities in major cities.

The government should also consider that FCEV (fuel cell electric vehicles) are another kind of electric vehicle which has advantages over BEVs (battery electric vehicles), particularly in the heavy-duty transportation case. The government should consider providing an economic development rate for hydrogen producers making fuel for FCEVs. Like the Ultra Low Overnight Rate, this hydrogen production rate would recognize the value in utilizing off-peak electricity for electrification of transportation, only it would be through hydrogen rather than battery mediums.

What specific actions could position the integrated energy resource plan to best leverage distributed energy resources (DER) that enhance local and province-wide grids to support energy system needs reliably and at the lowest cost?

Hydrogen Production via Electrolysis: Using off-peak, low-carbon electricity to produce hydrogen can capitalize on excess generation capacity from renewable sources, such as wind or solar, which might otherwise be curtailed. This aligns with the grid balancing objectives and helps stabilize energy demand.
Regional Distribution: By producing hydrogen in areas with surplus renewable energy and transporting it to high-demand regions like the GTA, the system ensures a steady supply of clean energy. This reduces reliance on fossil fuels in densely populated areas.

Pipeline Transmission: Pipelines are the most cost-effective means of transporting hydrogen at scale. A dedicated hydrogen pipeline network could create a robust infrastructure to connect distributed energy resources (DERs), improving the efficiency and reliability of the hydrogen supply chain.

What policy or regulatory changes should the government consider to address financial risks and support the adoption of DER in the long term?

Implementing a fast-tracked, clear approval process for hydrogen pipeline projects will lower administrative barriers and encourage investment. Regulatory alignment and stakeholder collaboration are crucial to making this feasible.

With the energy sector evolving and distributors considering new roles in serving customers, what barriers exist that limit local distribution companies from taking on new duties that could enable more efficient grid operations, leverage new technologies and further the integration of DERs?

Electrolyzers represent an exemplary DER. Electrolyzers can increase or reduce load very quickly acting to provide grid balancing service while producing hydrogen. This ability to provide grid services, however, is dependent on having a hydrogen pipeline network to collect the hydrogen and transmit it to areas of hydrogen demand. To unlock the benefits of electrolyzer DERs, a streamlined approval process for dedicated hydrogen pipelines needs to be implemented.

What actions can the government take to enhance collaboration between the OEB, the IESO, local distribution companies, industry stakeholders, and local communities to support the investment and integration of DER?

In alignment with Recommendation 8 of the Energy Efficiency and Transition Plan (EETP), the establishment of a task force, such as the Energy Transition Advisory Council, is essential to convene all relevant stakeholders and expedite the development of hydrogen pipeline infrastructure. Given the scope and complexity of such projects, which typically require years or even decades to complete, streamlining the approval process is paramount. Taking swift action is critical to ensuring the timely advancement of this major infrastructure project and achieving energy transition goals.

What further actions could the government take to maintain an affordable energy system for Ontarians throughout the energy transition?

Incentivizing the utilization of off-peak electricity for the production of hydrogen would serve to reduce overall system costs by delivering more energy via the existing grid. Providing predictable pricing to project developers for electricity used during off-peak timeframes would ensure that investments are made to significantly utilize this off-peak resource.

4 Becoming an Energy Superpower
What opportunities exist to further capitalize on Ontario’s leadership and expertise in nuclear technology and nuclear innovation?

The hydrogen industry is rapidly expanding, and Ontario is uniquely positioned to lead the way by building on the nuclear sector's proven expertise in hydrogen use and handling. With its advanced nuclear technology and innovative capabilities, Ontario has the opportunity to extend this knowledge across the energy sector, solidifying its role as a global leader in nuclear/electrical energy. This strategic advantage can drive innovation, create new opportunities, and accelerate the province’s leadership in the clean energy transition.

What opportunities should Ontario consider to leverage its position as a clean energy leader?

The province should take the following action to capitalize on its position as a clean energy leader:
1. Institute an Economic Development Rate for hydrogen production that provides electricity price stability for 20 years making productive use of off-peak clean electricity.
2. Encourage existing clean energy facilities (wind farms) to repower and expand capacity.
3. Encourage Integration of hydrogen production at electricity generation sites, particularly when renewing contracts (e.g., for wind energy).
4. Streamline the hydrogen pipeline planning and approval process in the province.