The Government of the Northwest Territories (GNWT) commissioned a study to assess the feasibility of using hydrogen as an energy source in the Northwest Territories (NWT). 

Objective

The GNWT is committed, under the NWT 2030 Energy Strategy, to reducing NWT’s greenhouse gas emissions (GHG) to 30% below 2005 levels by 2030 and pledged in 2024 to become net-zero by 2050. In the strategy, Hydrogen is identified as an emerging clean energy technology that could have a future role in power generation, heating, and transportation, thus reducing polluting fossil fuel consumption and GHG emissions.

The study commissioned considered the specific characteristics of the NWT, including cold climate and sparsely populated communities, the operation of seasonal winter roads and barges. The study addressed the following three goals:

• Analyze if the NWT could accelerate meeting its 2030 and 2050 climate change goals using hydrogen.
• Identify the techno-economic feasibility of developing a hydrogen supply chain in the NWT.
• If there is a business case, identify how the NWT can develop a hydrogen industry. 

Key Findings:

• Hydrogen production requires energy inputs for the conversion process. This can be done through different techniques, such as electrolysis (converting water into hydrogen by applying electricity), Steam Methane Reforming (converting natural gas), Autothermal Reforming (Breaking down natural gas to produce hydrogen and solid carbon), etc. Low-cost electricity and large-scale infrastructure are needed in the NWT for hydrogen production that could cost less than conventional diesel.
• Key challenges for operating hydrogen generation in the North are included below.  
  • Extreme cold (-40 °C and below).
  • Limited daylight and wind seasonality.
  • Permafrost thawing (caused by climate change) is causing ground instability.
  • Remote access and logistical constraints.  
  • Limited and localized grid infrastructure.

Engineering solutions are available. However, they would require a very high capital investment over many years to address.

• In the NWT, large-scale renewables, like wind and solar, could have the potential of producing hydrogen (at approximately $0.11/kWh) and become more affordable than conventional diesel, but energy generation capacity from renewable resources needs to be enhanced. The feasibility of this varies by region of the NWT, creating different scenarios for the communities. 
• Hydrogen and ammonia (NH₃) production in Alberta is being developed at a substantially larger scale, resulting in lower costs than what could be achieved in the NWT. The anticipated growth in low-carbon hydrogen in Alberta could provide an opportunity for the NWT to participate in the procurement of such hydrogen while benefiting from large-scale production economics.
• The development of large-scale hydrogen or derivatives production that supports exports from Beaufort-Delta natural gas would be very challenging, as it requires complex port development and proper process facilities in an Arctic environment. Hydrogen exports to the South are not viable as the cost of primary energy and the development of process facilities are lower in those regions.
• Hydrogen and ammonia could have the potential to improve energy security through distributed generation, backed up by storage capacity.

Recommendations

• It is recommended to consider the future development of pilot-scale projects in transportation and heating to gain valuable insight and experience and prepare for larger-scale implementation as technologies mature.
• Energy policy development should continue to integrate findings from this and future studies to support the energy governance in the North. Some possible future policy-related actions include:
  • Continue taking advantage of the federal Investing in Canada Infrastructure Program (ICIP) to develop hydrogen-based infrastructure projects in the NWT.
  • Evaluate the application of the Canadian Clean Fuel Regulation in the NWT to favor a cap-and-trade system that reduces low-carbon fuel and supports decarbonization projects.
  • Engagement with partners and stakeholders to identify opportunities that support the development of hydrogen in the North, if the technology becomes economically applicable for the needs of the northern communities. 

GNWT perspective

The recommended pilot project is dependent on technology that is not currently commercially available. Therefore, there is no immediate clear path forward to a successful short-term implementation of a pilot project using hydrogen in the NWT, in a way that competes with other alternative energy projects. The GNWT will continue to monitor the development of hydrogen technology internationally and look for future opportunities to use hydrogen in a way that improves outcomes versus directly using the additional renewable energy needed to produce or use clean hydrogen.

Read the full study here.