This opportunity assessment, commissioned by the BC Government’s Clean Energy and Major Projects Office (CEMPO), includes a detailed report and ecosystem vision diagrams to explore the future development of a hydrogen hub in Northeast BC. Download the report and visual assets.
Executive Report Summary
To drive progress towards CleanBC goals and implement actions from the BC Hydrogen Strategy, the BC Clean Energy and Major Projects Office (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. Northeast BC is the second region to be assessed, following the Lower Mainland.
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. Relative to its peers, the Northeast appears well-placed to develop a hydrogen hub for several reasons:
- Existing Infrastructure: The region has oil and gas infrastructure that can be adapted for hydrogen production, storage, and distribution.
- 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 and industrial decarbonization.
- Proximity to Alberta: The Northeast is in close proximity to Alberta hydrogen development zones.
- 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
“Blue” hydrogen is expected to be the primary source of supply in the Northeast. The production of blue hydrogen involves extracting hydrogen from methane (CH₄) molecules and capturing the resulting CO2 for either sequestration or utilization. There are two prominent technology pathways used to produce hydrogen: Steam Methane Reforming (SMR) and Auto Thermal Reforming (ATR). While variations using both technologies offer the potential to reach high levels of carbon capture (above 90 per cent) and are therefore considered “low-carbon”, they are still at the prototype stage (TRL 5) according to the International Energy Agency.
What separates the Northeast from other regions of BC is the suitability of geological formations for carbon capture and storage (CCS). There are two types of permanent geological storage to note that have been identified in the region:
Saline Aquifiers
Deep underground rock formations that contain salty water and have significant potential for CO2 storage.
Depleted Oil and Gas Reservoirs
Formations that have already been exploited for hydrocarbon production and now offer opportunities for CO2 storage.
Other low carbon hydrogen production methods being developed in BC include:
Turquoise Hydrogen
Produces hydrogen from natural gas, using high temperatures to break the chemical bonds in methane into hydrogen and solid carbon. Known as “turquoise hydrogen.”
Green Hydrogen
Produced by splitting purified water into hydrogen and oxygen, using electricity. Known as “green” hydrogen when renewable sources of electricity are used as the feedstock (e.g., wind, solar, or hydro).
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 CICE estimated 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.
- Rail: Hydrogen-powered trains, which emit only water vapour, offer a sustainable alternative to diesel locomotives. Rail plays a critical role in the Northeast and is key to inter-provincial goods movement; however, infrastructure upgrades are urgently needed.
In Development/Further Evidence Needed
- Industrial Decarbonization (Hydrogen for Heat & Power Generation): Low carbon hydrogen can substitute for fossil fuels used as energy sources and combusted to produce high-temperature heat in industrial processes.
- 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.
- Aviation: Hydrogen can be a key feedstock for the production of low carbon Sustainable Aviation Fuels (SAF), in fuel cells, or combusted in modified turbine engines. Ongoing research, development, and piloting of fuel cell technologies is needed.
Not Suitable for the Region in 2035
- Export Commodity: While the region itself is landlocked, transportation infrastructure (road and rail networks) could facilitate the distribution of hydrogen produced in the Northeast to other parts of the province and across borders. However, supply is still expected to be in its infancy in the next decade, and global exports would need to overcome significant costs and technology challenges.
- Buildings (Blending Hydrogen for Heat): Some companies are exploring using hydrogen to reduce the carbon intensity of gas supply by blending it with natural gas and injecting it into the pipeline network, for commercial and residential building customers. While this could be an initial offtake in the absence of other sources of demand, there would be logistical and safety challenges with this approach, and most importantly current evidence suggests it would not yield meaningful emission reductions.
Regional Advantages and Challenges
Competitive Advantages of the Northeast
- Oil and gas Infrastructure: The region boasts rich natural gas reserves, which can serve as a feedstock for production, and existing regional gas infrastructure, including extraction facilities, processing plants, and pipeline networks, can be adapted for hydrogen development and distribution.
- Carbon Storage Potential: The region holds immense geological carbon storage capacity, in the form of depleted gas reservoirs and saline aquifers, which is crucial for producing low-carbon hydrogen from natural gas.
Challenges to Overcome
- Transportation Infrastructure: While the region has extensive natural gas infrastructure, adapting it for hydrogen production and distribution poses significant challenges. The region's vast geography, relatively sparse population centers and harsh winter conditions in the region may present operational challenges for aging, repurposed infrastructure.
- Regulatory Hurdles: Governments and regulators must work with industry to streamline regulatory processes and reduce delays and uncertainty.
- Jurisdictional Alignment: Standardized safety protocols, environmental regulations and infrastructure are needed between states and provinces.
- Power Availability: Monitoring resource constraints, particularly water and electricity, will be essential. The region will need to balance its power needs with other industrial and residential demands, potentially requiring large investments in new power generation and transmission infrastructure.
- Market Development and Demand: Fostering local demand for hydrogen in Northeast BC could be challenging due to its relatively small population and industrial base compared to more densely populated areas of the province. It will be critical for northern regions to work together to jointly stimulate demand and incent technology adoption.
Mapping the Ecosystem
Building on our first series of provincial ecosystem vision maps, we mapped infrastructure in the Northeast 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 Northeast 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 carbon capture technology development and literacy
Recommendation Lead: All Partners - Provide further public clarity on electricity infrastructure adaptation and growth
Recommendation Lead: Province, Utilities - Continue support for market-based policies that increase competition between hydrogen and carbon-intensive fuels
Recommendation Lead: Province
2
Demand
- Focus the Northeast hub’s development around heavy transportation
Recommendation Lead: All Partners - Limit consideration of blended hydrogen for heat as a pathway to reduce emissions
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 the region and nearby 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 - Establish a formal collaborative framework for Northern BC hydrogen hubs
Recommendation Lead: Province, Local Governments
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 Northeast BC.
