January 18, 2021 Mr. Michael…

January 18, 2021

Mr. Michael Bishop
Policy Advisor, Climate Change Program Development
Ministry of Environment, Conservation and Parks
6th Floor, 135 St Clair Ave. West
Toronto, ON M4V 1P5

Dear Mr. Bishop:

RE: ERO 019-2709
ONTARIO LOW-CARBON HYDROGOEN STRATEGY DISCUSSON PAPER

The Electricity Distributors Association (EDA) represents local hydro utilities, the part of our electricity system that is closest to customers. Local hydro utilities (also know as local distribution companies, or LDCs) are on the front lines of power, and we know that the most important conversations about energy happen around the kitchen table, not the boardroom table. Our customers understand the power of local hydro, and we value the relationship of trust that we have built with customers who relying on LDCs to deliver a safe, reliable, and affordable electric grid.

We support the proposal to develop Ontario’s first ever hydrogen strategy. We support the government’s commitment to create local jobs, attract investment, reduce greenhouse gas emissions and help improve the reliability and affordability of Ontario’s electricity system.

We welcome the opportunity to provide feedback on the proposed hydrogen strategy. Please find below our responses to the questions where the LDC sector would like to contribute to the discussion in developing the strategy.

1. Do you support Ontario’s efforts to create a hydrogen strategy?

The EDA supports the creation of a hydrogen strategy for Ontario. We believe that the strategy should be aligned with the energy policy goals of the Province as it relates to DERs, conservation, energy supply and storage, while clearly outlining the roles and responsibilities of all stakeholders involved including the transmission, distribution and power generation sectors.

2. How would you refine the vision statement? (See change in red)

We propose a slightly revised vision statement to include the following red:

Leverage our existing strengths to develop Ontario’s hydrogen economy in partnership with Ontario’s energy sector stakeholders, to create local jobs, improve the reliability and affordability of Ontario’s electricity system and attracting investment while reducing greenhouse gas emissions.

3. What should be the key outcomes of Ontario’s hydrogen strategy?

We recommend the following two key outcomes for the hydrogen strategy:

1) Utilize wasted zero emissions from power generation and surplus renewable energy production.
2) Drive efficiencies within the energy sector to help balance electricity supply with customer demand by effectively using hydrogen energy storage facilities.

4. How should the hydrogen strategy define and measure success?

We suggest that the hydrogen strategy can define and measure success in the following ways:

1) Total reduction in greenhouse gases from different sectors (transportation, power production, commercial, industrial)
2) Ability to help balance electricity supply with the use of hydrogen energy storage technologies (i.e., total MWh stored using hydrogen facilities and deployed in the IESO administered market)

5. Are you aware of regulatory barriers that need to be addressed or regulatory enabling mechanisms that need to be put in place?
One of the key benefits of pursuing a hydrogen strategy is its potential to be used as an energy storage resource. For a new technology like hydrogen, the regulatory framework will need to be reviewed and developed, including processes and requirements for connections to the electricity system. How this new technology will impact the transmission, distribution and power generation sectors will also need to be assessed to ensure that all stakeholders are not being negatively impacted by a “new” energy source but also to ensure that hydrogen is effectively included within the electricity system.

Another key regulatory consideration for the hydrogen strategy is to review and amend the IESO market rules where necessary, to clarify the participation of hydrogen storage resources in IESO-administered markets, and what the potential role and responsibilities may be of the electricity distribution sector in supporting the implementation of the hydrogen strategy for power generation and storage.

Furthermore, there is uncertainty over provincial power supply as a potential impediment to investment in the hydrogen space. Due to the outstanding policy questions for re-contracting generation with expiring contracts, there is concern that there may be insufficient power to satisfy a sizeable hydrogen sector. The hydrogen strategy should be developed in tandem with a strategy to develop new energy sources.

6. What role can hydrogen play in various regions and sectors?
Hydrogen can be used as a form of energy storage to help meet and balance electricity system demand and make better use of surplus energy from power facilities. Hydrogen energy storage can potentially store energy over days, weeks or even months. This could help improve the reliability and affordability of Ontario’s electricity system by helping to balance supply and demand where surplus energy is currently not being utilized.

Electric vehicles are slowly replacing gasoline and diesel fueled buses and cars and are playing an important role in reducing GHG emissions within the transportation sector. Where it is not feasible to have electric buses, we support the usage of hydrogen as an alternative fuel source for buses.

The IESO projects a shortfall of 1,400 MW by 2023 and 3,700 MW by 2025 before plateauing to about 2,000 MW over the long term. The need for new capacity is primarily driven by the retirement of the Pickering nuclear plant and the refurbishment of the Bruce and Darlington nuclear plants. Hydrogen storage can be a part of the solution to help alleviate some of these issues that may arise from a capacity shortfall.

7. How can hydrogen support a reliable and affordable energy system, including energy storage?
Hydrogen can be used as a form of energy storage to help meet system demand and make better use of surplus energy from renewables and other forms of power production. While other forms of energy storage such as batteries and pumped water storage facilities can fulfill the same dispatchable energy storage need to help balance electricity supply, both have limitations that hydrogen energy storage can overcome. Batteries can only store a limited amount of energy, whereas hydrogen fuel can be stored for long periods of time, and in quantities only limited by the size of storage facilities.

Very large amounts of hydrogen can be stored in constructed underground salt caverns of up to 500,000 cubic meters, which would mean about 100 GWh of stored electricity. In this way, even more surplus electricity from wind and solar can be balanced with demand. Even balancing seasonal variations might be possible with a large-scale deployment of hydrogen storage facilities.

8. What are the best opportunities to cost-effectively support hydrogen across Ontario while respecting taxpayers? Using hydrogen where and when it makes sense

Utilizing hydrogen technology where surplus energy is being produced from existing industrial processes and power generation facilities is an excellent example of how hydrogen can play a role in helping to balance electricity demand without having to build large new expensive storage facilities which would undoubtedly have additional systems costs for electricity customers. Larger scale hydrogen storage development can have greater benefits to the environment and the electricity system as a whole but would require a larger initial investment which could impact taxpayers based on the funding model used.

On behalf of our members, we thank the Ministry once again for issuing this discussion paper. If you have any questions on this submission, please feel free to contact Abdul Muktadir, the EDA’s Senior Policy Advisor, at amuktadir@eda-on.ca or at 647 332 9976.

Sincerely yours,

Original signed by

Ted Wigdor
Vice President, Policy, Government & Corporate Affairs