Photo: Hydra Energy
An artist’s rendering of Hydra Energy’s proposed new green hydrogen production facility in Prince George.
According to a recent BC Utilities Commission (BCUC) report, B.C. has plans to produce more than four Site C dams worth of green hydrogen, and if all are built, B.C.’s hydropower customers will will have a clear impact on electricity prices. Hydropower needs to be financed with more generation capacity.
However, the BCUC is responsible for the monopoly companies that provide heat and power in B.C. (BC Hydro, Fortis BC Energy, and Pacific Northern Gas), and hydrogen can also be used for heat, power, and transportation. On the other hand, the BCUC Special Investigation recommends that the BCUC take a hands-off approach to regulating the nascent hydrogen industry.
Unlike heating electricity and natural gas, which are provided by British Columbia’s electricity monopoly, hydrogen is expected to be a free market enterprise. Therefore, the BCUC Committee recommends that hydrogen regulation be largely left to other agencies, namely the BC Energy Regulatory Authority (formerly the BC Oil and Gas Commission) and the Technical Safety BC (TSBC).
The BCUC’s primary mission is to protect ratepayers by regulating British Columbia’s monopolistic companies, such as BC Hydro, Fortis BC, and ICBC.
The BCUC tends to stay away from products not produced by monopolies, such as gasoline, but in 2019, President John Horgan’s administration ordered the BCUC to involve gasoline wholesalers in monitoring gasoline prices. And retailers were colluding in a way that created a kind of monopoly.
As hydrogen production and use is expected to increase in British Columbia over the next few years, BCUC has determined whether or not hydrogen service providers fall within the definition of a public utility under the Public Utilities Commission Act (UCA). A public investigation has been launched to determine whether this should be done. ), and if so, to what extent should it be regulated?
In its final report, the BCUC study determined that hydrogen services generally fall within the definition of a public utility because hydrogen can be used for “light, heat, cold, or electricity,” but that should remain largely unchanged. I concluded that there is. and other regulatory authorities such as the BC Energy Regulator and Technical Safety BC (TSBC).
“However, if it can be demonstrated that a competitive market exists or should exist for these services, BCUC is proposing exemptions from aggressive BCUC regulations,” said BCUC Communications Manager Chrissy Van. Mr. Rune explained. “The BCUC’s proposed exemption applies only to other non-public utilities.”
The commission generally recommends that hydrogen regulation be left to other regulators.
“The Commission urges BCUC to proactively regulate the safety of hydrogen energy services provided by public utilities when it is satisfied that another regulatory agency is providing adequate safety oversight. The Committee is satisfied that BCER and TSBC are mandated by law to monitor the safety of hydrogen energy services.”
The recommendations in the BCUC final report are subject to approval by the Ministry of Energy, Mines and Low Carbon Innovation.
The report provides some insight into the potential size of B.C.’s hydrogen industry, as well as the infrastructure needs that may be needed, such as additional power generation and pipelines that can transport hydrogen. It’s touching.
The final report notes that BC Hydro offers special discounted electricity rates for low-carbon fuels such as green hydrogen, which is made using water and electricity (electrolysis).
“BC Hydro discussed Clean Energy Industry Innovation Fee discounts available to projects that produce renewable and low-carbon fuels, such as green hydrogen,” the BCUC’s final report states. “As of the date of the workshop, BC Hydro had received inquiries for over 5,000 megawatts of projects in the hydrogen field.”
The Site C dam has a capacity of 1,100 megawatts, so if all the proposed green hydrogen projects were actually approved, BC Hydro would need far more power than it currently plans to build. It may become.
Regarding pipelines, the report notes that FortisBC is working with other midstream companies on plans to utilize existing pipeline networks to transport hydrogen blended with natural gas. .
“Because it can be difficult for individual hydrogen producers to own their own pipeline networks, some parties believe that large-scale pipeline transportation could be carried out by FEI (FortisBC Energy Inc.) or PNG (Pacific Northern Gas). ) and other existing regulated entities.
“In the short term, the FEI wants to rely on the continued use of existing gas pipeline infrastructure rather than replicating the network for hydrogen. This includes reequipment to accommodate mixed hydrogen flows. Must be used.
“To better understand the requirements for delivering a blend of natural gas and hydrogen, FEI partnered with PNG and Enbridge (TSX:ENB) to complete a technical feasibility study.
“All of FEI’s new pipelines are designed to be ‘hydrogen-ready’ and comply with national pipeline regulations…which include a new section on the transport of hydrogen.”
