Hydrogen Innovation Fund

The goal of the Hydrogen Innovation Fund (HIF) is to investigate, evaluate and demonstrate how low-carbon hydrogen technologies can be integrated into the grid to balance and strengthen Ontario’s reliable electricity system. With a total budget of $15 million over three years, this new program will enable the IESO and project proponents to test existing and emerging technologies with a view to objectively determining how hydrogen resources can support reliability, affordability and sustainability.

The Hydrogen Innovation Fund invests in projects no more than three years in length, and funds up to maximum 50% of eligible project costs. The Fund will include three project types:

• Projects at existing facilities that are already built. Demonstration projects to commence by June 30, 2024.

• Projects at new facilities that are not yet constructed. Demonstration projects to commence by December 31, 2025.

• Projects undertaking research and/or feasibility studies that could investigate the feasibility of different hydrogen approaches or support future decision- making. Final reports to be submitted by June 30, 2024.

Who Can Apply?

Both for-profit and not-for-profit incorporated entities can apply to the Fund. The HIF does not consider proposals from individuals, including incorporated individuals, sole proprietorships, trusts or joint ventures.

At the time of proposal submission, the applicant must provide audited financial statements and signed letters of support from all financial contributors of the project.

Background

On April 7, 2022, the Minister of Energy asked the IESO to investigate and propose program options to integrate low-carbon hydrogen technologies into Ontario’s electricity grid for the purposes of balancing and strengthening the reliability of the electricity system and contributing to broader decarbonization.

After conducting stakeholder engagement and its own research, on October 31, 2022, the IESO reported back to the Minister with potential options and projects, as well as the proposed program scope, budget and timelines. The IESO’s final report highlighted potential roles for hydrogen to benefit Ontario’s electricity system, including use of hydrogen storage and generation to more efficiently balance supply and demand on the grid, and potentially blending hydrogen into natural gas-fired turbines for peaking capacity.

Based on a jurisdictional scan of comparable programs, discussions with stakeholders and the identified potential projects, the IESO proposed a total program budget of $15 million over three years.

On January 26, 2023, the Minister of Energy directed the IESO to develop and implement a Hydrogen Innovation Fund to integrate hydrogen technologies in Ontario’s electricity grid. The Minister directed the IESO to issue a targeted Request for Proposals in Q2, 2023.