1 week Ago By Ari Yanover
Alberta is looking to add hydrogen blending into the province’s natural gas distribution system for residential and commercial heating as well as move to a day-ahead market and a cost-causation model for transmission infrastructure. Affordability and Utilities Minister Nathan Neudorf tabled legislation on Thursday that, if passed, will forward the province’s 2021 Hydrogen Roadmap and shift the burden of transmission cost for ratepayers in Alberta. Here’s a breakdown of the proposed changes to Bill 52 — the Energy and Utilities Statutes Amendment Act.
Hydrogen blending and heating in homes According to the province, Alberta produces 2.4 million tonnes of hydrogen each year, making it Canada’s largest hydrogen producer. The proposed legislation would make amendments to the Gas Utilities Act and the Gas Distribution Act to allow the blending of hydrogen into natural gas distribution systems for heating purposes.
The blend of natural gases in homes and commercial properties would contain five per cent hydrogen, which has been deemed safe, according to Neudorf. “We’re working with other regulators, like the Canadian Safety Association, to set the rate of blending,” Neudorf said. “We also know there (are) other jurisdictions around the world that have different levels of blending, but this protects Albertans.
” There is currently one pilot project in Alberta , located in Fort Saskatchewan, that intends to build a new pure hydrogen residential community. The project is a partnership between Qualico, a development company, and utility provider Atco. According to Atco, d ue to supply chain and other issues, “a consistent supply of hydrogen cannot be guaranteed, and customers may therefore receive anywhere from zero to five per cent blended gas during lower supply times.
” Neudorf said before providers can move forward with hydrogen blending in a new subdivision or existing neighbourhood, there has to be a “significant level” of community engagement and support so individuals are informed and willing before going forward. Only ratepayers who are receiving hydrogen-blended natural gas will be on the hook for the cost, he added. “The incentive (for hydrogen blending) is less emissions because as you blend hydrogen, hydrogen burns more cleanly than natural gas, even though natural gas is extremely clean.
It does come at a cost,” Neudorf said. Alberta NDP affordability and utilities critic Sharif Haji said hydrogen blending is welcome, but it was long overdue. He said the bill lacks clarity on timelines and details that have yet to be determined through regulation.
“We are in favour of it because of sustainability and emission reductions. But the problem is that we should have done this a long time ago,” Haji said. Cost-causation model and day-ahead market Bill 52 includes supporting legislation to enact Neudorf’s December 2024 announcement to move forward with the province’s plan to modernize the electricity market via the restructured energy market (REM).
Back in December, Neudorf directed the Alberta Electric System Operator (AESO) to finalize details for REM by 2025, which includes a mandatory day-ahead model where power generators will commit their power 24 hours in advance rather than a couple of hours beforehand. Haji said the bill is “confusing” when it came to the day-ahead market going forward, saying AESO said it was off the table. He pointed to the stakeholder update by AESO on April 4, where it said that after speaking to stakeholders, AESO said it decided not to move forward with two of the three markets explored through the REM design, including the day-ahead commitment market and the day-ahead energy scheduling market.
The province said the day-ahead market they are moving forward with in the bill is the day-ahead market for reliability products, which will be retained and expanded. The amendments would also include changes to the existing transmission policy so costs for new transmission infrastructure will be assigned on a “cost-causation basis,” meaning Alberta ratepayers would no longer be saddled with the full cost of a new transmission line or infrastructure and seek to maximize existing lines. Neudorf said if there is a need for additional transmission infrastructure to be built to account for population or industry growth, ratepayers will pay their share.
But if the new infrastructure is going to an area where there’s no driving factor, development can proceed, but the bulk of the cost will fall onto those advocating for the development. “It will be up to the regulator, the AUC, to determine exactly where that proportion of cost is allocated,” Neudorf said. The province says regulations still need to be developed to clarify the implementation details.
[email protected] @kccindytran RelatedAlberta announces electricity market reforms, moves to day-ahead model and cost-causation basisKeith Gerein: Work heating up for hydrogen homes near Edmonton, but are Alberta officials cool with it? Bookmark our website and support our journalism: Don’t miss the news you need to know — add EdmontonJournal.com and EdmontonSun.
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