SECTOR	Reference Case (MT/yr)	Fiscal Scenario (MT/yr)	Change from Reference Case
SMR	266.41	265.17	-0.465%
Electrolyzer	269.11	269.34	0.085%

Table 28 shows the change in transportation-related emissions as a result of the Fiscal Scenario by region for 2030. Again, the emissions figures include both hydrogen production and consumption emissions. Generally speaking, each province also shows a similar decrease in emissions for the SMR case, and a similar increase in emissions for the electrolysis case. The increase in emissions in the electrolyzer case is the result of assumptions inherent in the model. More specifically, as was described above, marginal electricity used to produce hydrogen in the electrolyzer case is assumed to be from natural gas. The use of natural gas to produce electricity leads to an increase in total emissions when emissions associated with both the production and consumption of hydrogen are taken into account. The one exception to this trend is Alberta, where emission reductions are achieved even in the electrolyzer case. This is the result of reductions in emissions that are achieved when electricity at the margin comes from natural gas rather than coal, the source fuel for the majority of existing electricity demand in the province.

Table 28 Transportation²⁶ Greenhouse Gas Emissions by Region, 2030

Region	SMR Reference Case (MT/yr)	SMR Fiscal Scenario (MT/yr)	Change from Reference Case	Elec Reference Case (MT/yr)	Elec Fiscal Scenario (MT/yr)	Change from Reference Case
Ontario	87.85	87.43	-0.48%	88.87	88.97	0.11%
Quebec	50.00	49.75	-0.50%	50.60	50.67	0.14%
BC	37.60	37.47	-0.35%	37.93	37.98	0.13%
Alberta	48.42	48.18	-0.50%	48.78	48.75	-0.06%
Manitoba	8.12	8.08	-0.49%	8.22	8.23	0.12%
Saskatchewan	12.15	12.08	-0.58%	12.29	12.30	0.08%
NB	7.32	7.29	-0.41%	7.37	7.38	0.14%
Nova Scotia	8.10	8.07	-0.37%	8.17	8.18	0.12%
Newfoundland	4.94	4.92	-0.40%	4.96	4.96	0.00%
PEI	0.97	0.96	-1.03%	0.98	0.98	0.00%
Yukon	0.24	0.24	0.00%	0.24	0.24	0.00%
NWT	0.49	0.49	0.00%	0.49	0.49	0.00%
Nunavut	0.21	0.21	0.00%	0.21	0.21	0.00%
Total	266.41	265.17	-0.47%	269.11	269.34	0.09%

Table 29 shows just those emissions associated with the use of the hydrogen vehicles (as opposed to including the emissions associated with the production of hydrogen as well). As expected, consumption emissions decline as a result of the Fiscal Scenario for both the electrolyzer and the SMR case. The results presented in Table 29 represent those that would be realized if the hydrogen was produced from a source that was not associated with greenhouse gas emissions such as wind or nuclear power.

Table 29 Transportation²⁷ Greenhouse Gas Emissions by Region (Consumption Only), 2030

Region	SMR Reference Case (MT/yr)	SMR Fiscal Scenario (MT/yr)	Change from Reference Case	Elec Reference Case (MT/yr)	Elec Fiscal Scenario (MT/yr)	Change from Reference Case
Ontario	86.89	85.95	-1.08%	86.94	86.00	-1.08%
Quebec	49.46	48.93	-1.07%	49.45	48.91	-1.09%
BC	37.28	36.97	-0.83%	37.28	36.98	-0.80%
Alberta	48.08	47.63	-0.94%	48.10	47.66	-0.91%
Manitoba	8.04	7.95	-1.12%	8.04	7.95	-1.12%
Saskatchewan	12.03	11.88	-1.25%	12.03	11.89	-1.16%
NB	7.25	7.18	-0.97%	7.22	7.14	-1.11%
Nova Scotia	8.04	7.97	-0.87%	8.02	7.94	-1.00%
Newfoundland	4.91	4.88	-0.61%	4.90	4.87	-0.61%
PEI	0.96	0.95	-1.04%	0.96	0.95	-1.04%
Yukon	0.24	0.24	0.00%	0.24	0.23	-4.17%
NWT	0.49	0.49	0.00%	0.49	0.49	0.00%
Nunavut	0.21	0.21	0.00%	0.21	0.21	0.00%
Total	263.86	261.21	-1.00%	263.88	261.22	-1.01%

Table 30 shows the impact of the Fiscal Scenario on emissions associated with the residential, commercial and electric utility sectors. These are the sectors that experience changes in emissions as a result of an increase in penetration of stationary fuel cells. The increase in emissions associated with the residential sector is offset by reduced emissions in the electric utilities sector as fuel cells are used to generate power in houses and less energy is demanded from the electrical grid. The decrease in emissions in the case of the commercial sector is due to movements away from oil and LPG as the use of stationary fuel cells increases.

Table 30 Greenhouse Gas Emissions for Sectors Associated with Stationary Fuel Cells, 2030

SECTOR	Reference Case (MT/yr)	Fiscal Scenario (MT/yr)	Change from Reference Case
Residential	57.43	57.54	0.19%
Commercial	64.24	64.22	-0.03%
Electric Utilities	152.38	151.58	-0.53%
TOTAL	274.05	273.34	-0.26%

Table 31 shows greenhouse gas emissions for the residential, commercial and electric utility sectors combined by region. The increase in emissions in Alberta is explained by the fact that as the residential and commercial sectors install and employ stationary fuel cells, less electricity is demanded from the local grid. This allows electricity generators to export more power to BC, and therefore electricity demand does not decrease in the province. The emissions associated with the demand being exported to BC are linked to Alberta rather than BC. This also helps explain the decline in emissions in BC. Specifically, the decline in BC is due to the combined effect of (1) the increased penetration of stationary fuel cells in the province displaces some utility electricity generation, and (2) the fact that more energy is being imported from Alberta as opposed to being generated locally.

Table 31 Total Stationary Greenhouse Gas Emissions (Residential, Commercial and Electric Utilities) by Region, Megatonnes/yr, 2030

Region	Reference Case (MT/yr)	Fiscal Scenario (MT/yr)	Change from Reference Case
Ontario	92.78	92.61	-0.18%
Quebec	13.80	13.80	0.00%
BC	19.77	19.20	-2.88%
Alberta	85.07	85.28	0.25%
Manitoba	4.47	4.47	0.00%
Saskatchewan	22.88	22.84	-0.17%
NB	18.54	18.54	0.00%
Nova Scotia	9.43	9.43	0.00%
Newfoundland	3.82	3.82	0.00%
PEI	0.43	0.43	0.00%
Yukon	0.43	0.43	0.00%
NWT	1.50	1.50	0.00%
Nunavut	0.32	0.32	0.00%
Total	274.05	273.35	-0.26%

Table 32 shows greenhouse gas emissions for each region for the residential, commercial, electric utilities and transportation sectors combined. The figures in the table demonstrate the reduction in total emissions in the case of SMR hydrogen production. In the case of electrolyzer hydrogen production, emission reductions are not achieved because of increases in emissions associated with hydrogen production. If we were to account only for the emissions associated with hydrogen consumption (i.e., if we were to assume the hydrogen is produced from a zero-emissions source such as wind power or nuclear energy), we would see a reduction in total emissions for both the SMR and electrolyzer cases. Note that in Alberta, even in the electrolyzer case total emissions decline. This is the result of emission reductions achieved in the transportation sector that outweigh the increase in emissions associated with the residential and commercial sectors.

Table 32 Total Greenhouse Gas Emissions by Region, Residential, Commercial, Electric Utilities and Transportation²⁸ Combined, Megatonnes/yr, 2030

Region	SMR Reference Case (MT/yr)	SMR Fiscal Scenario (MT /yr)	Change from Reference Case	Elec Reference Case (MT/yr)	Elec Fiscal Scenario (MT /yr)	Change from Reference Case
Ontario	171.88	171.42	-0.27%	172.9	172.97	0.04%
Quebec	62.55	62.3	-0.40%	63.15	63.22	0.11%
BC	58.95	58.73	-0.37%	59.29	59.25	-0.07%
Alberta	131.09	130.93	-0.12%	131.46	131.5	0.03%
Manitoba	15.07	15.03	-0.27%	15.17	15.18	0.07%
Saskatchewan	35.25	35.31	0.17%	35.39	35.53	0.40%
NB	21	20.97	-0.14%	21.06	21.07	0.05%
Nova Scotia	18.22	18.2	-0.11%	18.29	18.3	0.05%
Newfoundland	8.54	8.53	-0.12%	8.56	8.56	0.00%
PEI	1.5	1.49	-0.67%	1.51	1.51	0.00%
Yukon	0.67	0.67	0.00%	0.67	0.67	0.00%
NWT	2	2	0.00%	2	2	0.00%
Nunavut	0.58	0.58	0.00%	0.58	0.58	0.00%
Total	527.31	526.16	-0.22%	530.01	530.34	0.06%

In addition to examining trends in greenhouse gas emissions, it is helpful to consider the impact of hydrogen penetration on criteria air contaminants. Generally speaking, life-cycle criteria air contaminant emissions will decrease as much if not more than greenhouse gas emissions when comparing hydrogen vehicles to gasoline vehicles. Compared to diesel vehicles, these pollutants will be decreased significantly more than the associated decrease in greenhouse gas emissions.²⁹ It is expected that the life-cycle criteria air contaminant emissions from a stationary fuel cell (fuelled by natural gas) will be no worse than those from a combined-cycle natural gas power plant and separate natural gas furnace or boiler, and may even be better due to the higher system efficiency and lack of emission controls on small heating units.

Emission Reduction Costs

In this section we present emission reduction cost results for the transportation, residential, commercial and utility sectors. The cost results are presented as dollars per tonne of greenhouse gas emissions reduced. The figures presented below represent the costs to producers and consumers who invest and operate hydrogen technologies as a result of the introduction of the fiscal incentives. They do not include costs associated with those who purchase fuel cell technologies in the absence of fiscal policy stimulus (i.e., they do not account for costs associated with hydrogen technology penetration realized in the Reference Cases). In other words, the costs reflect the capital, operating and maintenance, and fuel costs for producers and consumers that purchase fuel cell technologies after the fiscal incentives are in place net of government subsidies.

For the transportation sector, we focus results on the two regions that realized the greatest penetration of hydrogen-related technologies, Alberta and Ontario. Results for other regions followed similar trends to Alberta and Ontario. Table 33 shows cost figures for emission reductions taking place in the transportation sector for the province of Alberta for SMR hydrogen. The “Consumption” figures indicate the cost per tonne of greenhouse gas emissions reduced, taking into account only those emissions associated with driving the hydrogen-related vehicles. The “Total” figure shows the cost per tonne of reduction, taking into account emissions associated with the use of the vehicles, and also the production of hydrogen. The “consumption” figures represent the cost per tonne reduction for hydrogen from a zero emission source such as wind or nuclear power.

The figures presented below indicate that the emission reductions achieved as a result of the penetration of the hydrogen technologies come at fairly high costs. This is due to the combined impact of the high costs associated with producing hydrogen and purchasing hydrogen technologies and the limited emission reductions achieved with limited penetration of hydrogen technologies in absolute terms.

The results in Table 33 indicate that emission reductions come at the least cost for the fuel cell buses. Cost results for the fuel cell light-duty vehicle and the hydrogen internal combustion engine light-duty vehicle are similar. The NAs in the table below indicate instances where the greenhouse gas emissions associated with the production of hydrogen lead to an increase in the total emissions. In other words, in the case of the hydrogen internal combustion engine, the gains in efficiency associated with the vehicle relative to a conventional car are not great enough to offset the emissions associated with the production of hydrogen using SMR. In such cases, it is impossible to calculate cost per tonne reduction (as such reductions do not actually occur).

Table 33 Cost per Tonne of Greenhouse Gas Emissions Reduced, Transportation Sector, SMR Case, Alberta, 2000$

SECTOR	2010	2015	2020	2025	2030
Fuel Cell Bus, Consumption	849.06	995.97	965.54	937.08	906.70
Fuel Cell Bus, Total	926.79	1,086.75	1,053.14	1,021.64	988.06
Fuel Cell Car, Consumption	1,134.83	1,387.76	1,406.78	1,428.15	1,447.43
Fuel Cell Car, Total	5,089.90	6,139.12	6,138.14	6,134.62	6,129.95
Hydrogen ICE, Consumption	1,321.37	1,197.65	1,464.58	1,730.55	1,998.00
Hydrogen ICE, Total	NA	NA	NA	NA	NA

Table 34 shows the same information as above for hydrogen production from electrolyzers (rather than SMR). The results here follow a similar trend to those above, yet in the case of the fuel cell car, when accounting for emissions associated with hydrogen production, a cost per tonne could not be established. As was stated above, this is due to the fact that once emissions associated with hydrogen production were taken into account, an increase in greenhouse gas emissions actually occurred. This is due to the fact that the electricity used to produce the hydrogen is generally assumed to come from natural gas in the Energy 2020 model.

Table 34 Cost per Tonne of Greenhouse Gas Emissions Reduced, Transportation Sector, Electrolyzer Case, Alberta, 2000$

SECTOR	2010	2015	2020	2025	2030
Fuel Cell Bus, Consumption	857.74	1,005.14	974.59	946.34	916.05
Fuel Cell Bus, Total	1,033.29	1,211.16	1,175.23	1,141.55	1,105.62
Fuel Cell Car, Consumption	1,215.27	1,472.74	1,490.67	1,513.96	1,534.07
Fuel Cell Car, Total	NA	NA	NA	NA	NA
Hydrogen ICE, Consumption	1,446.92	1,329.29	1,595.27	1,864.91	2,134.33
Hydrogen ICE, Total	NA	NA	NA	NA	NA

In addition to presenting results for Alberta, Tables 35 and 36 show the cost per tonne of greenhouse gas emissions reduced for Ontario for the SMR case and the electrolyzer case respectively. The cost results for Ontario follow the same trend as Alberta, although emission reductions in Ontario are achieved at slightly less cost.

Table 35 Cost per Tonne of Greenhouse Gas Emissions Reduced, Transportation Sector, SMR Case, Ontario, 2000$

SECTOR	2010	2015	2020	2025	2030
Fuel Cell Bus, Consumption	706.11	832.58	815.56	800.12	783.14
Fuel Cell Bus, Total	774.20	912.42	893.21	875.70	856.52
Fuel Cell Car, Consumption	830.33	1,040.47	1,048.61	1,058.77	1,066.98
Fuel Cell Car, Total	3,768.17	4,640.56	4,577.90	4,515.19	4,451.34
Hydrogen ICE, Consumption	1,037.55	927.92	1,162.84	1,396.76	1,631.90
Hydrogen ICE, Total	NA	NA	NA	NA	NA

Table 36 Cost per Tonne of Greenhouse Gas Emissions Reduced, Transportation Sector, Electrolyzer Case, Ontario, 2000$

SECTOR	2010	2015	2020	2025	2030
Fuel Cell Bus, Consumption	711.42	837.92	822.35	808.21	792.65
Fuel Cell Bus, Total	868.28	1,022.55	1,001.61	982.46	961.53
Fuel Cell Car, Consumption	877.39	1,087.82	1,108.80	1,130.46	1,151.33
Fuel Cell Car, Total	NA	NA	NA	NA	NA
Hydrogen ICE, Consumption	1,110.99	1,001.71	1,256.64	1,508.50	1,763.35
Hydrogen ICE, Total	NA	NA	NA	NA	NA

Finally, Table 37 presents cost results for the stationary fuel cells. The table below shows only those regions for which penetration of stationary fuel cells occurred. Nationally, emission reductions associated with stationary fuel cells came at a much lower cost than those associated with the transportation sector. However, the national cost figure masks significant variations in costs between provinces. For example, in Alberta, it was not possible to calculate the cost per tonne of greenhouse gas emissions reduced as total emissions associated with the residential, commercial and electric utility sectors actually increased. For British Columbia, the cost of greenhouse gas emission reductions is partly driven by the decline in the deregulated Alberta price of electricity (as the penetration of stationary fuel cells took place in Alberta and less electricity was demanded from the grid, the price of electricity declined).

The drop in electricity prices in Alberta led to electricity imports into BC, which resulted in additional reductions in emissions in that province (the emissions associated with the imported electricity are associated with Alberta rather than BC). These emission reductions are achieved at relatively low costs, which results in low costs per tonne of emissions reduced. In Ontario and Saskatchewan, the increase in stationary fuel cells means that some of the more expensive (less economically efficient fossil fuel based) plants no longer need to operate. This results in a reduction in the price of electricity in these two regions and the dollar savings from the stationary fuel cells is less. Due to interprovincial electricity import dynamics from hydropower-based regions (and the use of nuclear power in Ontario), the emission reductions on the electric side diminish as the penetration of fuel cells takes place into the future. This means that over time, consumers pay a lot for the fuel cells but society gets few added emission savings.

Table 37 Regional Cost Results, Cost per Tonne, 2000$

REGION	2015	2020	2025	2030
Ontario	360.12	675.22	913.66	1171.93
BC	12.50	6.34	13.50	14.93
Alberta	NA	NA	NA	NA
Manitoba	312.69	421.94	322.94	372.13
Saskatchewan	126.38	578.10	1216.35	1670.50
Canada	293.08	495.17	726.93	944.17

 

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