Clean energy experts question Kinew government's enthusiasm for hydrogen as Manitoba energy solution

Clean energy experts say it makes no sense for Manitoba's new government to tout hydrogen as a solution to the province's growing energy needs — and are questioning other aspects of the NDP's decarbonization plans. 

Throughout Manitoba's provincial election campaign and since he became premier, Wab Kinew has stressed the need to invest in hydrogen production in Manitoba. 

The premier's initial environmental pledges also include incentives to purchase electric vehicles, the installation of 5,000 heat pumps, weaning Manitoba Hydro off fossil fuels by 2035 and making the entire province carbon neutral by 2050.

Bruce Lourie, president of the Ivey Foundation — a non-profit organization that supports the clean-energy transition — said Manitoba needs to develop a concrete plan to increase electricity production in order to achieve decarbonization goals.

"It sounds to me like there isn't really a plan right now in Manitoba," Lourie said in a telephone interview from Ottawa, noting Hydro-Quebec recently unveiled a $185-billion plan to increase wind-power capacity and build 5,000 kilometres of transmission lines. 

"My question to them [the new government] would be, 'When will you have a plan that specifies things to the level of detail that Quebec has?'"

An energy roadmap completed by the former Progressive Conservative government suggested Manitoba Hydro may rely on natural gas-fuelled power plants to meet growing energy needs in the short term, at least until other forms of cleaner power become more viable.

"Strategic use of natural gas assets and gaseous fuels are an integral part of the energy transition in Manitoba," Hydro stated in an integrated resource plan published in August.

That runs contrary to the Kinew government's directive to make Manitoba Hydro production entirely clean by 2035. But there is pragmatism to Hydro's position, suggested Nicholas Rivers, an associate professor of public and international affairs at the University of Ottawa and an expert in environmental economics.

"As we start expanding our electricity systems and increasingly relying on variable renewable electricity like solar and wind, which produce no carbon, we're going to be looking for firm backup power. And that means power that can be supplied or delivered to the system when the sun's not shining and when the wind is not blowing," said Rivers in a telephone interview from Ottawa.

"The main source of that firm backup power right now is either hydro or natural gas, and hydro is a constrained power source. We can't just build it out quickly. So I think we will see some continued reliance on natural gas to provide that firm backup power in the near term."

Both Rivers and Lourie do not share Kinew's enthusiasm for hydrogen as a solution to Manitoba's growing energy needs, with Lourie saying it "doesn't really make sense" to talk about hydrogen, even as a means of energy storage.

"The electricity required to produce hydrogen, it's just so huge that you have to have a heck of a lot of excess hydro to make that viable," he said.

"Right now there is no business case for green hydrogen, and so the idea that you would use electricity to produce hydrogen is not going to be a cost-effective option."

Rivers said hydrogen is more likely to be used as a transportation fuel and in industrial processes.

"People have been talking about hydrogen future for the last 30 or 40 years," he said, adding there is uncertainty about hydrogen use. "What I think we are coalescing around is that hydrogen is unlikely to play a really major role in home heating."

Lourie and Rivers were both far more enthusiastic about the ability of heat pumps to play a significant role in the clean-energy transition.

"Without question, heat pumps are where the world is going, and at some point the majority of homes will be using heat pumps," said Lourie, adding the devices are proving effective during all but the coldest Canadian winter nights.

"The trick there is going to be figuring out what is the backup system that's effective and economical," he said.

Manitoba might be able to achieve even greater energy savings by installing geothermal heating on a neighbourhood-wide scale instead of focusing on air-source heat pumps for individual homes, Rivers said.

"Certainly as the sole source of heat, Manitoba and parts of the north of Canada get so cold that air-source heat pumps aren't able to provide heat for a significant portion of the heating season. So something like a district heating system could well be a more viable approach in parts of Manitoba," he said.

The continuation of the troubled federal carbon tax could nudge consumers into purchasing more heat pumps, Rivers said.

"We know economically that a carbon tax is a really sensible mechanism. It provides everyone with an incentive to get off fossil fuels and provides incentives for technology developers to develop new low-carbon heating systems that could be tailored for different climates," he said.

"What we're learning as we go through this experiment is that the politics of carbon pricing are unpredictable and difficult, and so I think we've got to tailor our economic approach and our technology approaches to the politics."

Manitoba's new government is engaged in a political balancing act of its own. On one hand, it has promised to freeze Manitoba Hydro rates for one year.

On the other, it is pledging to do what's necessary to increase Manitoba Hydro's generating capacity, a project that will require billions of dollars of investment.

"There are going to be significant, significant costs associated with the energy transition, meeting our new capacity needs [and] investing in that new transmission," Manitoba Finance Minister Adrien Sala said in an interview in his office last week.

"We however need to balance those needs for investments with ensuring we maintain affordability at Hydro."

Rivers said Manitoba is not alone among jurisdictions suddenly faced with the need to ramp up electricity production after two decades of relatively flat demand.

"I think what they don't want to do is overbuild and leave us with all this capital infrastructure that we have to pay off. But they also face the threat of underbuilding and not having enough power to supply an economy that's increasingly demanding more electricity," he said.

"So I don't envy people in that role trying to figure out exactly how much should be built, especially when a lot of these infrastructures require really, really long lead times."

Lourie said Manitoba can at least count on natural advantages: There is plenty of wind and sun in this province, compared to most others.

"The challenge is not particularly difficult. It really is just going to take some some vision and some resources and an acceptance that there is going to need to be a fairly significant capital investment in near term to develop the plan or implement the plan over time," he said.

"The trick in all of this, is those upfront costs need to be amortized over a very long time period, so it doesn't have a huge impact on rates."