The
time horizon for the hydrogen technologies included in this modelling
exercise is considered long compared to the technologies considered
in other NRTEE Ecological Fiscal Reform (EFR) case studies (i.e.,
case studies of energy-efficient and renewable-energy technologies).
Given current technology parameters, even over a 30-year period,
relatively little market penetration of hydrogen technologies
occurred. Reduced costs and technological improvements would increase
the competitiveness of hydrogen technologies.
1.
Given the long time frame associated with hydrogen technologies,
any reductions in GHG emissions that result will also necessarily
occur over a long time period.
2.
The successful market penetration of hydrogen technologies does
not guarantee that significant reductions in GHG emissions will
result. Consideration of source fuel and energy pathway is key
if hydrogen is to be part of a plan to reduce GHG emissions. If
the intention is to increase penetration of hydrogen technologies
and reduce GHG emissions at the same time, then a focus on low-emission
hydrogen sources is necessary (e.g., renewable energy, natural
gas reformers and systems that capture carbon emissions).
3.
Cost and technology barriers are still significant with some technologies
and are expected to remain so for the next 10 to 20 years. 1
4. Given the current cost barriers associated with hydrogen
technologies, any reductions in GHG emissions that are achieved
come at a very high cost. If the main objective of fiscal policy
is to reduce GHG emissions in the near future, focusing on other
methods to reduce GHG emissions is likely more cost-effective
than focusing on hydrogen technologies.
5.
It may be most effective to focus fiscal policies intended to
increase market penetration of hydrogen technologies on technological
improvements (research and development, demonstration) and cost
reductions. It should be noted that the application of fiscal
policies to hydrogen technologies will not necessarily ensure
reductions in GHG emissions unless the source fuel and energy
pathway is taken into account in policy design.
6.
In the transportation sector, it will be necessary to concentrate,
not only on cost reductions and improvements in efficiency to
increase the market penetration of hydrogen technologies, but
also on the supply and availability of hydrogen fuel and hydrogen-related
vehicles. There may be a role for fiscal policies targeted at
manufacturers and retailers in that regard, although that is outside
the scope of this analysis.
7.
The development of hydrogen technologies in Canada is and will
be largely influenced by trends in other countries, such as the
United States, Japan and Germany. While such trends were not taken
into account in this analysis, it is useful to keep this factor
in mind in interpreting the results.
8.
From a methodological point of view, the calibration of the Energy
2020 model to Canada’s Emissions Outlook: An Update (CEOU)
(Natural Resources Canada, 1999), introduces an inherent level
of uncertainty into the modelling results. We already know that
the fuel prices contained in the CEOU are incorrect. The effect
of this error on the model results is uncertain.
9.
There are gaps in data when it comes to the technology parameters
and predictions of market availability for hydrogen technologies.
For any technologies that are not yet commercially available or
even in real-world operation, assumptions made regarding both
costs and performance are often based on best predictions by technology
researchers and developers. Thus, there is high uncertainty with
these parameters. The modelling results are also highly dependent
on the assumptions made regarding when particular technologies
will be available in the marketplace and access to supporting
services such as refuelling infrastructure. There is a wide range
of predictions and speculation on when these new technologies
will become available.
Endnotes
1According
to the U.S. Department of Energy Hydrogen Posture Plan, the introduction
into the transportation market of personal vehicles that use hydrogen
is not expected to occur until after 2020. Hydrogen use in commercial
fleets and distributed Combined Heat and Power (CHP) are on the
same time-line.
