Ontario's Electricity Grid

As Ontario explores pathways to achieve a low-carbon energy future, one of the options that’s grabbing headlines is hydrogen – a fuel that has the potential to provide essential electricity services and support decarbonization across other parts of the economy.

Hydrogen can be used as a fuel for power production, either through combustion in turbines or in fuel cells. It can be produced from both thermal and renewable generators and may also be used as storage to enhance grid resiliency.

As noted in the IESO’s Pathways to Decarbonization report, achieving a fully decarbonized supply mix by 2050 will require contributions from new nuclear, conservation, demand response, renewables and storage as well as hydrogen. Investing in new and emerging technologies today will help ensure Ontario is well positioned to fully leverage their contributions and deliver value to Ontario residents and businesses.

Hydrogen has the potential to provide a number of essential services that support the reliability of Ontario’s power system. For example, it could:

• Smooth the output from renewable resources like wind and solar when their production in real time deviates from the forecast
• Be blended into fuel to reduce total GHG emissions from natural gas generators
• Optimize the utilization and value of surplus clean electricity that cannot be delivered where it’s needed because of transmission constraints
• Provide peaking generation capacity, ancillary services, and long-term and/or seasonal storage, improving the performance of existing generation assets

In addition to providing services to the electricity sector, hydrogen may also support deep decarbonization across Ontario’s economy. Certain sectors and processes, such as building heating and passenger transportation, are relatively easy to decarbonize through electrification. Others, however, are difficult to electrify, requiring an alternative to electrification. That’s where hydrogen may fit in, serving as an effective fuel and feedstock that can help decarbonize energy- and emissions-intensive sectors including commercial trucking, aviation, fertilizer production and steel manufacturing, among others.

The IESO is in the early stages of creating a Hydrogen Innovation Fund to accelerate the development of the hydrogen economy and support broad decarbonization efforts. The goal of the fund 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.

Growing a low-carbon hydrogen sector in Ontario will take time. There are still barriers to developing and implementing hydrogen production at scale – including costs – but this is an important step on the journey towards a low-carbon energy future.