Ontario’s provincial government released its Low-Carbon Hydrogen Strategy in April 2022. The document identifies five potential hydrogen hubs, while backing plans by Atura Power—the largest operator of combined cycle gas-fired power plants in Ontario—to develop 20MW of green hydrogen production projects in the Niagara Falls region by providing an exemption from a levy on electricity generation

Hydrogen Economist spoke to Matthew Morrish, hydrogen business development manager at Atura, and Mark Winfield, a professor in the Faculty of Environmental and Urban Change at York University in Toronto, for positive and negative views respectively on Ontario’s strategy and its impact to date.

Positive perspective

“Ontario’s low-carbon hydrogen strategy was a call to action to realise the economic growth opportunities that building the hydrogen economy presents while simultaneously reducing greenhouse gas emissions and diversifying our energy mix as we strive towards net-zero emissions by 2050,” says Morrish.

“Ontario’s hydrogen economy is gaining traction, and the momentum is on both the supply and demand side of the industry” Morrish, Atura

“By identifying the key success factors that already exist in Ontario—including a highly skilled workforce; clean, low-cost and reliable energy; existing pipeline and storage infrastructure; and a supportive regulatory environment—the strategy laid the foundation for the successful growth of the burgeoning hydrogen industry.”

As of now, “Ontario’s hydrogen economy is gaining traction and the momentum is on both the supply and demand side of the industry,” according to Morrish.

“In terms of supply, Atura Power is dedicated to advancing the Niagara Hydrogen Centre, which will utilise hydroelectricity to produce low-carbon intensity, commercial demonstration hydrogen,” he says. “When it comes online in late 2024 it will be the largest [clean] hydrogen production facility in Ontario. In addition, several other projects across the province [at the previously mentioned hubs] are in development and are expected to be in commercial operation by 2026–28.”

In addition, the Independent Electricity System Operator, which manages Ontario’s power system, is developing an interruptible rate pilot programme that could provide low-cost, relatively clean power to produce electrolytic hydrogen in off-peak hours, according to Morrish. More than a third of the power on Ontario’s electricity grid comes from renewable sources and a total of 92pc from non-emitting sources, given the province’s substantial nuclear power production.

“On the demand side, we are seeing an increase in strategic partners coming to the table to discuss low-carbon hydrogen uses across a variety of demand scenarios, including industrial processes such as green steel manufacturing, fuel for heavy-duty transportation and sustainable aviation fuel, green fertiliser production and petrochemical refinement.”

Negative perspective

On the flip side, Winfield believes Ontario’s low-carbon hydrogen strategy has accomplished little to date because the strategy is misguided, contains no capacity targets and provides no direct provincial funding except for steelmaking.

“At this stage, the use cases and infrastructures just are not there,” he says. “The only place we have a really clear use case is steel, where the two conventional steel plants are (in theory) committed to convert from coke to hydrogen-based processes. The two mills involved, Dofasco in Hamilton and Algoma in Sault St. Marie, have received about C$1bn [$750mn] each in [federal and provincial] government funding in support of the conversion. No other major uses have emerged.”

On the supply side, Winfield is opposed to the commissioning of new nuclear capacity to power the electrolysers to produce clean hydrogen, favouring renewable power sources instead. “The costs of newbuild nuclear would likely be extremely high based on the experiences in the US, the EU and the UK,” he says. “It would make far more sense to use renewables as the electricity supply, but the province is not allowing any new renewable development at this point.”

In terms of using surplus electricity from the grid to produce hydrogen through electrolysis, Winfield says “there is less and less 'surplus' electricity, and even less is anticipated if electrification moves forward significantly. The marginal fuel in the Ontario electricity system is natural gas, so any production through electrolysis would be from gas-fired electricity under the province's current plans.” 

To get its low-carbon hydrogen strategy right, the Ontario government should go back to the drawing board and “engage in a serious investigation and analysis before it starts handing out large taxpayer subsidies to these hydrogen initiatives,” says Winfield. “A willingness to allow the development of renewables for hydrogen production would make sense, but only if there are strong end-use cases established.”

The federal government has its own hydrogen strategy for the country as a whole, but it is “not really any better” than the Ontario plan, according to Winfield. Both the federal and Ontario hydrogen strategies lack capacity targets or operational support mechanisms.

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Author: Vincent Lauerman