This opportunity assessment, commissioned by the British Columbia Ministry of Energy and Climate Solutions’ Clean Energy and Major Projects Office (CEMPO), includes a detailed report and ecosystem vision diagrams to explore the future development of a hydrogen hub on BC's Vancouver Island. Download the report and visual assets.
Executive Report Summary
To drive progress towards CleanBC goals and implement actions from the BC Hydrogen Strategy, CEMPO is working with Foresight to examine the potential for hydrogen hub development in the following regions where project development is underway and potential sources of demand exist: the Lower Mainland, Northeast BC, Interior BC (Kootenays and Okanagan), and Vancouver Island. By co-locating hydrogen production and end-use applications, hubs can ensure a balanced market while accelerating the growth of the local economy.
Foresight reviewed publicly available literature and consulted with regional experts to investigate the following three topics:
1
Supply
Potential sources of supply in the region, including feedstocks, production methods and locations, and transportation and storage.
2
Demand
Potential sources of hydrogen demand within the region, cost trends, and forecasts for demand growth.
3
Regional Considerations
Competitive advantages of the region and opportunities for collaboration with neighbouring jurisdictions, including workforce considerations.
It is now well-known that a variety of low-carbon energy sources, technologies, and innovations will be necessary to achieve regional emissions reduction goals, and hydrogen appears likely to fill a role in instances where direct electrification is neither technically feasible nor cost-effective. Vancouver Island appears well-placed to develop a hydrogen hub for several reasons:
- Low-Carbon Electricity: BC's renewable hydroelectric power provides a low-carbon pathway for hydrogen production.
- End-Use Applications: There are potential demand-side applications for hydrogen use in the region, including trucking, marine vessels, and port operations.
- Local demand: There is local demand for greater clean energy solutions and energy independence for the island.
- Supportive Policy Environment: Local and provincial commitment to foster sectoral growth through the groundwork of the BC Hydrogen Strategy and complementary programs and policies.
Sources of Supply
Green Hydrogen
Green hydrogen is produced by splitting purified water into hydrogen and oxygen using electricity. It is known as “green” hydrogen when renewable sources of electricity are used as the feedstock (e.g., wind, solar, or hydro). This is likely to be the most suited to Vancouver Island.
As we look towards 2030-2035, cost and carbon intensity projections are critical variables. The BC Hydrogen Strategy estimated that a competitive production cost would need to be no higher than $3/kg by 2030. A literature review indicated that current projections for 2030 blue hydrogen production costs in BC fall between $2.14 and $2.71/kg. Furthermore, latest research from North X Climate Tech estimates the 2030 carbon intensity of blue hydrogen to be between 12.2-37.4 gCO2e/MJ. Most of the estimates fall below the low-carbon threshold of 36.4 gCO2e/MJ adopted in the BC Hydrogen Strategy, which is meant to be a starting point to define low-carbon production, and represents a 60 per cent reduction “below the intensity of hydrogen produced from natural gas.”
End-Uses
Demand is another matter and is subject to change as technologies evolve between now and 2050. However, the current evidence suggests that the hub’s primary hydrogen end use will be heavy transportation. Based on expert feedback and literature, we separate potential end uses based on whether they appear feasible and well-suited for the hub's needs by 2035.
Well Suited for the Region in 2035
- Heavy-Duty Vehicles: Fuel cells use hydrogen as a fuel to create electricity, water, and heat. Fuel Cell Electric Vehicles (FCEVs) are being explored as an internal combustion engine replacement for transportation applications that have limited cost-effective decarbonization options.
- Shipping and Port Operations: In heavy shipping and other forms of marine transportation, fuel cells are being explored as one decarbonization solution. Other options, such as ammonia (a hydrogen carrier) and battery-electric ships, are also being investigated. There are also operations for hydrogen use in off-road vehicles, cranes, and other port operations.
In Development/Further Evidence Needed
- Industrial Decarbonization (Hydrogen for Heat & Power Generation): Low-carbon hydrogen can substitute for fossil fuels used as to produce high-temperature heat in industrial processes. Off-road vehicles (e.g., tractors, mining trucks) could also be transitioned to FCEVs.
- Energy Storage: Hydrogen can be stored until needed and used as a source of power generation either through a fuel cell or combustion. However, this does not project to be a cost-competitive use beyond on-site power generation for industrial facilities.
Not Suitable for the Region in 2035
- Buildings (Blending Hydrogen for Heat): Utilities are exploring the use of hydrogen to reduce the carbon intensity of provincial natural gas by injecting it into the pipeline network. While there is value in blending hydrogen as a short-term anchor tenant in the region, the small amount of hydrogen expected to be produced in the region by 2035 would likely be more effectively utilized in other sectors, such as on-road and off-road transportation, given that past research suggests blending is unlikely to make a meaningful difference in BC’s emission reduction goals.
Regional Advantages and Challenges
Competitive Advantages of Vancouver Island
- Geography: Access to low-cost electricity, water, and potential export markets makes Vancouver Island a strategic location for hydrogen production and distribution. The local demand for clean energy provides a strong market base for hydrogen.
- Industry Adaptation: The decline of the forestry and pulp and paper sectors may present opportunities to adapt old sites with existing water and electricity infrastructure.
Challenges to Overcome
- Transportation Infrastructure: The region is largely reliant on highway transportation with one main highway, which can pose challenges for hydrogen production site development and distribution.
- Local Regulatory Hurdles: There is a need for governments across all levels to work with industry to streamline regulatory processes to reduce uncertainty.
- Jurisdictional Alignment: Standardized safety protocols, environmental regulations and infrastructure are needed between states and provinces.
- Resource Management: Some of BC’s competitive advantages require careful management. Monitoring resource constraints, particularly water and electricity, is essential to ensure sustainable hydrogen production.
- Workforce Development: Further improvements to training and knowledge transfer are needed to support the growth of the hub.
Mapping the Ecosystem
Building on our first series of provincial ecosystem vision maps, we mapped infrastructure in the region to envision what a future hydrogen ecosystem could look like in 2035. Click to download.
Recommendations for Hub Partners
Based on the findings of this opportunity assessment, Foresight developed recommendations for hub partners to advance the Vancouver Island hydrogen hub within the decade. We encourage readers to review the full report for further information on each recommendation and their varying timelines.
1
Supply
- Focus on electrolysis technology adoption and literacy
Recommendation Lead: All Partners - Provide further public clarity on electricity infrastructure adaptation and growth
Recommendation Lead: Province, Utilities - Streamline and harmonize regulations and processes to enhance investment appeal
Recommendation Lead: Province - Promote and support First Nations-led projects
Recommendation Lead: All Partners
2
Demand
- Focus the Vancouver Island hub’s development around heavy transportation
Recommendation Lead: All Partners - Consider the various end-uses within marine and shipping hubs
Recommendation Lead: Province, Utilities - Continue government funding for demonstration projects and communicate outcomes
Recommendation Lead: Province
3
Regional Considerations
- Explore new ways to enhance knowledge transfer between regional partners and other hubs
Recommendation Lead: All Partners - Explore the creation of a regulatory task force
Recommendation Lead: Province, Utilities, BCER - Develop a hydrogen workforce development strategy
Recommendation Lead: Province, Industry, Post-Secondary Institutions - Continue support for public education and awareness activities
Recommendation Lead: Province, Industry
This opportunity assessment is meant to be a midpoint marker for the hub by acknowledging the progress to date and setting expectations for the coming decade. The path forward involves a combination of strategic planning, collaborative engagement, and targeted investments. By working together to address identified challenges, public and private sector partners can realize the full potential of a hydrogen hub in the region.
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