New Alberta bill allows hydrogen home heating, electricity market remodelling

Alberta's government is looking to give the green light to hydrogen as a home and commercial heating fuel in a move it says will boost demand and reduce emissions.

If passed, legislation tabled by Utilities Minister Nathan Neudorf will allow utility companies to blend hydrogen into their supply of natural gas — provided customers sign off on receiving the blended heat source.

"Hydrogen presents an enormous opportunity and we want to ensure our province can remain a global leader," Neudorf said at a legislature news conference Thursday.

Neudorf says safety is top of mind and the province will work with regulators to set an acceptable blending rate, as hydrogen is easily ignitable and more explosive than methane.

The Energy and Utilities Statues Amendment Act also sets the stage for Alberta to make changes to its electricity market as part of a substantial system overhaul.

Among those proposed changes is empowering the Alberta Electric System Operator (AESO) to determine who should pay for the costs of building new transmission infrastructure or bolstering the capacity of the existing system.

"We've heard Albertans and their frustration with rising transmission costs on their bills," Neudorf said.

He wants AESO to encourage power producers to build generators where lines already exist to manage rising transmission costs.

It's a policy that critics say would disadvantage renewable energy installations such as solar and wind, many of which need to be built in southern Alberta, where there is less transmission capacity.

AESO is in the midst of a multi-year consultation period called the Restructured Energy Market (REM) process. 

The new bill would enable the AESO to bring in a "day-ahead electricity market," which requires companies to set power prices a day in advance to prevent cost spikes.

But on a website updating electricity market participants, AESO said last week that feedback has prompted them to abandon some initial plans for day-ahead pricing. Instead, the operator plans to keep and expand day-ahead pricing for power sources that can easily be adjusted, such as natural gas, nuclear or hydroelectricity.

Neudorf says the changes, which should take effect in 2027, ought to make electricity less expensive and more reliable.

His staff handed out quotations of support for the restructuring plans attributed to electricity sector corporate leaders.