Question 1

In response to a question about the level of spending in decarbonizing Canada’s electricity system, Natural Resources Canada provided the following response in a letter to the Committee:

When considering measures included in the 2030 Emissions Reduction Plan, released on March 29, 2022, and the additional measures presented since, the Government of Canada has announced investments of $998M over seven years, and $0.5 million ongoing, to support Canada’s efforts to achieve a net zero electricity system by 2035. Those measures are:

• $600 million in additional funding to the Smart Renewables and Electrification Pathways Program to support additional renewable electricity and grid modernization projects;
• $250 million to support predevelopment work for large clean electricity projects, in collaboration with provinces, through the Electricity Predevelopment Program;
• $2.4 million for the creation of the Pan-Canadian Grid Council to provide external advice to the Government of Canada to promote clean electricity infrastructure investments;
• $69.9 million to undertake research to minimize waste generated from small modular reactors; support the creation of a fuel supply chain; strengthen international nuclear cooperation agreements; and enhance domestic safety and security policies and practices;
• $50.7 million, and $0.5 million ongoing, for the Canadian Nuclear Safety Commission to build the capacity to regulate small modular reactors and work with international partners on global regulatory harmonization; and,
• $25 million to establish Regional Energy and Resource Tables to work with provinces, territories, and relevant stakeholders to develop net-zero energy plans.

Additionally,

• The Canada Infrastructure Bank invested $970 million in Ontario Power Generation towards Canada’s first grid-scale small modular reactor; and,
• The Strategic Innovation Fund invested nearly $100 million in small modular reactors.

The 2022 Fall Economic Statement also proposes a refundable tax credit equal to 30 per cent of the capital cost of investments in:

• Electricity Generation Systems, including solar photovoltaic, small modular nuclear reactors, concentrated solar, wind, and water (small hydro, run-of-river, wave, and tidal); and,
• Stationary Electricity Storage Systems that do not use fossil fuels in their operation, including but not limited to batteries, flywheels, supercapacitors, magnetic energy storage, compressed air storage, pumped hydro storage, gravity energy storage, and thermal energy storage.

The credit would be available as of the day of Budget 2023 and no longer in effect at the start of 2035, subject to a phaseout starting in 2032.

Question 2

In response to a question about the carbon content in pipelines that have been retrofitted to blend hydrogen, Natural Resources Canada provided the following response in a letter to the Committee:

There are currently two hydrogen blending projects active in Canada. The projects have different carbon intensities for the hydrogen being used, resulting from different production pathways.

Enbridge Gas is carrying out a blending pilot project for 3,600 customers in Markham, Ontario. According to Enbridge, the hydrogen used in this pilot project is produced through electrolysis, using a mix of renewable electricity and electricity from the grid. It has a carbon intensity 94% lower than conventional hydrogen produced from natural gas with no carbon abatement.

ATCO Gas in Alberta is blending hydrogen into the natural gas distribution system for 2,100 customers in Fort Saskatchewan, Alberta. According to ATCO, the hydrogen being used currently is conventional hydrogen, produced from natural gas without carbon abatement. It has a carbon intensity of just over 110g CO₂/MJ hydrogen. In early 2023, this hydrogen is expected to be replaced by hydrogen produced from renewable electricity, thereby lowering the carbon intensity by over 90%.