Topic 1: The vision for…

Topic 1: The vision for Ontario’s hydrogen strategy

Put investments already made in a clean electricity system to productive use by providing access to off-peak electricity to generate hydrogen to help to decarbonize other sectors such as transportation, industry and chemical fuels. The key outcome is keeping Ontario competitive with the rest of the world, in fact it will indicate Ontario is “Open for Business” to the hydrogen economy and can do so without the imposition of a carbon tax.
Successful outcomes include reduced GHGs, reduced CACs, reduced global adjustment to electricity rate payers, reduced traffic pollution induced hospitalization and deaths, high-skilled blue collar job creation and new business creation through the participation in the hydrogen economy which is estimated to create 30 million jobs globally and $11 trillion annually as per the Hydrogen Council.

Topic 2: Supporting the Environment Plan by reducing greenhouse gas emissions through low-carbon hydrogen

Electrolysis is a proven technology and Ontario is home to two electrolyzer companies, Cummins and Next Hydrogen. In order for Ontario to be competitive regulatory barriers regarding the price of electricity used in electrolysis need to be removed. Offering wholesale, off-peak electricity for the production of hydrogen will keep Ontario competitive with other regions. For example, Nikola Motors recently signed a deal with Arizona Public Services to get wholesale electricity at 2.7 cent/kWh to produce hydrogen. If Ontario wants to participate in the hydrogen economy and draw businesses here access to similar pricing structures is needed, especially in the early stages of developing the sector. Both the business opportunity and environmental opportunity was described and recommended by the Ontario Society of Professional Engineers (OSPE) in their Long-Term Energy Plan submission in 2017.
Additionally, creating incentives or setting mandates for zero emission vehicles, including fuel-cell electric, is needed to get automotive OEMs to place high demand vehicles in the province creating the end-user market needed for hydrogen producers. Currently other markets such as Quebec, BC, California, Asia and Europe have mandates in place so for an OEM to place a vehicle in Ontario means they are being penalized in another region.

Topic 3: Generating economic development and jobs by building a hydrogen industry involving all regions of Ontario to create jobs and facilitate economic recovery, seek strategic partnerships and support innovation

Hydrogen can be used in numerous sectors across the economy, including those that are difficult to decarbonize such as cement and steel. More direct clean fuels include ammonia production and refineries, if they used hydrogen from electrolysis rather than from fossil fuels. The mining sector has also indicated significant interest in hydrogen to mitigate impact of reduced ice road time frames, which is equally as relevant for reducing diesel in northern and remote communities in the future. In particular, alkaline electrolyzers use a significant amount of nickel and therefore the deployment of alkaline electrolyzer is a significant market opportunity for the nickel supply chain. In addition to this there are numerous sub-components of an electrolyzer that are not available or manufactured in Ontario that certainly could be such as, electrodes, current carriers and membranes. Developing a hydrogen market in Ontario will attract new clean tech firms such as these.

Topic 4: Promoting energy resilience by considering the value of domestic hydrogen for Ontario’s energy bills and evolving energy system

There is tremendous opportunities in Ontario due to salt formations and geologic formations that are promising for large volume, low cost storage of hydrogen. The role that hydrogen plays in a smart grid, integrated energy system is clearly highlighted in the European Commissions Integrated Energy Strategy 2020.
The barrier that must be overcome is the chicken-and-egg scenario, where we have the opportunity to role out infrastructure which will enable rapid commercial deployment of hydrogen electric fuel cell vehicles.

Topic 5: Reducing barriers and enabling action in order to attract investment and create a level playing field between technology options

P3 opportunities are well developed with partners ready to move quickly. In fact, Public-Private-First Nation partnerships are years in the making and ready to deploy in the event access to wholesale, off-peak electricity pricing is made available.
It is currently not a level playing field because of the disregard for the cost of carbon. If the province is to achieve the path to its Made in Ontario Environment Plan GHG reduction targets, it needs to increase uptake in electric vehicles, including hydrogen vehicles, and enable Ontarians to participate in implementing the Federal Clean Fuel Standard. In fact hydrogen arguably is required in the majority of identified pathways in the Plan.

Topic 6: Using hydrogen where and when it makes sense, focusing on areas that are most likely to become cost-effective

Currently material handling applications (i.e., forklifts) are cost-effective. The next area likely to become cost-effective in the near term is large vehicle transport (i.e., trucks and buses). Hard to decarbonize sectors like cement and steel need regulations or incentives to increase utilization of clean fuels because nothing competes with fossil fuels on purely a cost basis without the cost of carbon emissions factored in. The same applies for fertilizers and refineries. Therefore, the transportation, mobility and material handling applications will be first to achieve parity with diesel for example when deployed as scale. Lack of volume of end-users is the key risk or determining factor that needs to be dealt with in development and deployment of a hydrogen strategy for Ontario. The hydrogen production side of the equation is more clear, simply provide an electricity pricing structure for off-peak electricity that is commensurate with the benefits to the environment, economy and society.