Ontario Government Announces Hydrogen Innovation Fund

As hydrogen becomes more prominent in conversations about the future energy supply mix, the Ontario government has announced the creation of a three-year, $15 million Hydrogen Innovation Fund. The fund, to be administered by the Independent Electricity System Operator (IESO), is intended to kickstart the development of hydrogen opportunities that can be integrated into the Ontario electricity system.  

The Fund will support projects across three streams: 

• Existing facilities already built or operational and ready to evaluate how hydrogen can support the Ontario grid; 
• New hydrogen facilities not yet constructed but could be in-service by a specified date to demonstrate how hydrogen can support the grid; and 
• Research studies investigating the feasibility of novel applications of hydrogen or support future hydrogen project decision making. 

The IESO is expected to open up the funding application process in April, with existing projects to commence by Q4 2023 and new projects to commence by Q2 2025. 

The creation of the fund was first identified last April when the government released its Low-Carbon Hydrogen Strategy that laid out eight concrete actions to make Ontario a leader in the hydrogen economy. In October 2022, the IESO reported back to the Ministry of Energy on potential roles for hydrogen to benefit Ontario’s electricity grid, including electricity storage, balancing, ancillary services and potential blending into natural gas facilities. 

Hydrogen also had a prominent mention in the IESO’s Pathways to Decarbonization study released December 15, 2023, with the IESO forecasting a need for 15,0000 MW of hydrogen in its 2050 decarbonization scenario.