Category: Blog

New federal regulations underscore the importance of clean electricity to Canada’s future economy

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Widespread electrification is a key pathway to achieving Canada’s net-zero emissions targets by 2050.

To deliver on the economic and environmental promise of net zero through electrification, we need clean and affordable electricity that we can rely on to power Canada’s future economy.

The Clean Electricity Regulations announced today by the federal government will allow Canada to keep pace with global competitors. They underscore the role clean electricity will play in Canada’s net-zero economy and provide a clear objective we must now move towards.

We have a little over a decade to meet this necessary and ambitious goal while simultaneously expanding the grid to support the electrification of our society. Achieving this will require overcoming barriers across the electricity supply chain—from advancing technological capabilities and developing innovative financing mechanisms to streamlining siting and permitting processes, and developing the workforce needed for the future grid.

The newly announced regulations present an opportunity for the federal government to provide policy certainty through clear and achievable rules. This can complement existing public and private efforts across Canada aimed at addressing the challenges ahead. These regulations will play a critical role in shaping Canada’s future electricity system, and provide a critical focus to different levels of government, the private sector, Indigenous interests, finance and others to make sure we get a right-sized, practical, affordable net-zero electricity system. Importantly, there must be enough flexibility built in so that each jurisdiction can find the best way to achieve net-zero emissions while ensuring affordability and reliability.

As an initiative focused on accelerating electrification, Electrifying Canada has convened stakeholders representing every facet of this supply chain to chart the pathways to net-zero electricity within each province. This fall, we will be launching our Phase 2 process, involving over 200 electricity leaders nationwide to understand the impacts of the Clean Electricity Regulations on their future plans, and helping to chart viable forward pathways that meet the intent of the regulations and work in the real world. We look forward to gathering key insights from these stakeholders and working with the federal government through upcoming consultation processes to help ensure Canada’s future electrification success.

New research shows how Canada can compete in a low-carbon economy

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New data shows what Canada can do to compete for low-carbon investment

Toronto, ON – Canada must take urgent action to close the incentive gaps for low-carbon technology investment. We’re at risk of missing out on big opportunities because our investment incentives aren’t competitive with the United States.

That’s the conclusion of new modelling released today in a working paper by Clean Prosperity and The Transition Accelerator.

The working paper is the first attempt to show the dollar value of the incentives offered by the Canadian and US governments for low-carbon technology investment. It looks at seven key technologies, including electric vehicles, solar energy, hydrogen, direct air capture, sustainable aviation fuel, and carbon capture and storage.

“Compared to the United States, Canada isn’t yet a competitive destination for low-carbon investment,” said Clean Prosperity Executive Director and working paper co-author Michael Bernstein.

“It’s as if Canada is offering companies a coach ticket with the chance of an upgrade, while the Americans are offering to send them straight to first class. But there are strategic moves we can make to fix that.”

Last August, the United States’ Inflation Reduction Act (IRA) introduced massive subsidies for a wide range of low-carbon tech, mainly in the form of production tax credits. Canada introduced its own incentives in response, but so far these measures aren’t enough to make Canada as attractive as an investment destination.

However, “There’s an opportunity here for Canada to take advantage of. With a smart industrial policy response to the IRA, Canada can stay competitive and grow a prosperous low-carbon economy,” says co-author and Transition Accelerator Research Director, Bentley Allan.

The working paper recommends that the federal government introduce new measures in Budget 2023 to improve Canada’s competitiveness as a destination for low-carbon investment, namely:

  • Carbon contracts for difference, a kind of insurance policy on the future value of carbon credits that will give firms the confidence to make big decarbonization investments.
  • Strategic financial support for industries where Canada can compete globally and generate significant economic benefits, good jobs, and manufacturing value added.


Below: How the specific measures proposed by Clean Prosperity and The Transition Accelerator in their new working paper could help close the incentive gap between Canada and the United States.

 

How contracts for difference could boost blue hydrogen

One industry the working paper examines is blue hydrogen production, which can be produced with low greenhouse gas emissions and offers an emissions-free, affordable fuel for transport trucks, trains, ships, and airplanes.

The IRA tax credits are worth about a dollar per kilogram of hydrogen. In Canada, investment tax credits deliver a subsidy of only about nine cents per kilogram—in a best-case scenario, where firms are allowed to benefit from separate tax credits for carbon capture and hydrogen production.

A blue hydrogen facility in Alberta, for example, could become a competitive investment proposition if the federal government guarantees the future value of the facility’s carbon credits using a carbon contract for difference.

With a contract for difference to backstop the value of its carbon credits, the Alberta facility’s guaranteed annual revenues rise from $0.09/kgH2 to $1.05/kgH2:

Average annual revenue incentives for blue hydrogen facilities in Alberta and Texas, 2023-2032 (Canadian dollars)


Strategic financial support: where?

In addition to carbon contracts for difference, the working paper recommends that the federal government provide targeted support in areas where Canada has a strategic advantage.

These are industries where Canada can compete globally and generate significant economic benefits, good jobs, and manufacturing value added. Examples include:

  • Direct air capture: A production tax credit for direct air capture could help launch a major new industry that will be critical for meeting our climate targets, while also generating clean economic growth.
  • Electric vehicles: The government could fulfil Canada’s ambition of creating a complete mines-to-mobility value chain by complementing existing investments in EV production with incentives for upstream mining of critical minerals and midstream chemical processing.
  • Sustainable aviation fuel: With additional public support, Canada has the resources and expertise to develop a significant sustainable aviation fuel industry, which could generate economic benefits in rural communities across the country.

 

Read the Working Paper
Creating a Canadian Advantage: Policies to help Canada compete for low-carbon investment

Bringing the Hydrogen Economy Into Focus

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Three new reports show Canada has the skilled and ready workforce to support a hydrogen economy, the CO2 storage capacity to make low-carbon hydrogen production viable, and the potential to build out value chains that will serve our short and long-term goals.

This month, the Transition Accelerator released three reports that bring a functioning hydrogen economy closer to reality.

Building on the shared vision behind the Edmonton Region Hydrogen HUB, these reports examine three essential aspects of our future hydrogen economy. The first, Assessing the Workforce Required to Advance Canada’s Hydrogen Economy, looks at Canada’s current hydrogen workforce and outlines the roles we’ll need to support the emerging H2 value chain. The second, Techno-Economics of a New Hydrogen Value Chain Supporting Heavy-Duty Transport, compares a range of potential supply chains to determine the most effective ways to distribute hydrogen widely and affordably, with a focus on heavy-duty trucking. And the third, Review of Carbon-Dioxide Storage Potential in Western Canada: Blue Hydrogen Roadmap to 2050, outlines Western Canada’s tremendous potential for carbon capture, utilization and storage (CCUS), which will play an integral role in Canada meeting its target of net zero carbon emissions by 2050.

Individually, each report is a valuable tool for policymakers and key stakeholders in industry, government, and beyond. Taken together, this hydrogen deep-dive shows where we are on the road to a hydrogen economy, and how far we still need to go. By clarifying economic opportunities and identifying knowledge gaps, this work further highlights that hydrogen as an energy carrier is part of a compelling and credible pathway to a zero-emission future.

Assessing the Workforce Required to Advance Canada’s Hydrogen Economy
Vol. 4, Iss. 4. July 2022
Pat Hufnagel-Smith

To promote a just transition into a zero-emission future, we need to understand the workforce required for a hydrogen economy. What jobs will be needed in the hydrogen value chain? What skills will be required, and how do we ensure that training opportunities are widely available?

Growing the labour force for an emerging technology may appear daunting, but according to report author Pat Hufnagel-Smith, Canada is well positioned to meet this challenge. We already have a highly skilled and ready workforce that knows how to produce, handle, and use hydrogen safely. What’s more, we can build on this head-start through targeted training, using micro-credentials, bootcamps and work-integrated learning to bolster our skilled workforce.

Still, the transition will involve a number of risks, including the need for more industry standards, a lack of diverse talent pools from which to hire, and uncertainty around the exact structure the hydrogen economy will take. If those risks are addressed with planning and forethought, though, the report makes clear that the shift to a hydrogen economy has the potential to create desirable, well-paying jobs that leverage Canada’s existing labour force.

Hufnagel-Smith has also developed a Hydrogen Workforce Assessment Tool, providing a detailed breakdown of the occupations needed for the low-carbon hydrogen economy. This tool includes core occupations, qualifications, and requirements unique to the demands of working with hydrogen, allowing users to determine a HUB’s specific talent needs, opportunities and risks based on its unique value chain components.

Techno-Economics of a New Hydrogen Value Chain Supporting Heavy-Duty Transport

Vol. 4, Iss. 5. July 2022
Mohd Adnan Khan, PhD; Catherine MacKinnon, MSc. P.Eng; Cameron Young, MSc, P.Eng; David B. Layzell, PhD, FRSC

Developing the infrastructure to distribute hydrogen fuel widely and affordably in time to meet Canada’s climate obligations won’t happen by accident. According to the analysis in our second report, Creating a hydrogen value chain will require the rapid, coordinated scaling up of both supply and demand, alongside significant investment in infrastructure, innovation, and knowledge sharing. While the complexity of this task is undeniable, smart policies and concerted effort on behalf of industry, government, and consumers can deliver results.

In the “Techno-Economics of a New Hydrogen Value Chain” report, Dr. Adnan Kahn, Energy Systems Engineer with the Transition Accelerator, explores the costs of not only producing low-carbon hydrogen, but transporting it from its site of production to make it available for fueling heavy-duty vehicles at 5, 40 or 300 km from where it is produced. In assessing the production, processing, delivery and fueling costs for such value chains, the report highlights the importance of ‘scale’ and ‘coordination’ of supply and demand to keep costs low.

The report finds that the hydrogen value chain is highly capital intensive, with 45-65% of the total cost per kilogram of hydrogen coming from capital expenditure. That high capital cost means scale is critical and communities and industries wishing to transition to a hydrogen economy must “go big or go home”. With each fueling station needing to deliver 2 or more tonnes of hydrogen per day to achieve economic viability, many dozens to hundreds of hydrogen-using vehicles must visit the station every day.

For example, each station will need the support of about 40 trucks, each driving 650km and using 50 kg hydrogen/day. However, most trucks driving such distances are involved in intercity transport, so two fueling stations and 80 trucks are needed, with one fueling station at each end of the corridor.

The report’s findings are already being incorporated into the development of strategies for deploying hydrogen hubs and corridors that can achieve economic viability without ongoing public investment. Once established, the hubs and corridors can grow and eventually connect with other hubs and corridors at minimal cost, delivering both economic and environmental benefits.

Review of Carbon-Dioxide Storage Potential in Western Canada: Blue Hydrogen Roadmap to 2050
Vol. 4, Iss. 6. August 2022
Richard Hares, P.Eng, MSc; Sean McCoy, PhD; David B. Layzell, PhD, FRSC

The global interest in hydrogen as a zero-emission energy carrier has led to renewed interest in carbon capture, utilization, and storage (CCUS), which allows relatively low-cost “blue” hydrogen to be made by reforming natural gas and preventing the resulting CO2 from being released to the atmosphere. The Canadian federal and provincial governments have identified CCUS as a major component of their strategies to reduce greenhouse gas GHG emissions, and meet the 2050 targets that were identified in the federal Hydrogen Strategy for Canada. The large-scale production and domestic use of blue hydrogen as a fuel would create significant demand for CCUS, potentially requiring about 200 megatonnes of CO2 storage per year for many decades.

Our third report this month combs through decades of research to determine Western Canada’s carbon storage potential, reviewing storage projects, identifying knowledge gaps, and suggesting strategies for future CCUS deployment. The authors, Richard Hares, Sean McCoy and David Layzell, confirm that Western Canada has the ideal geology for CCUS—theoretically enough to contain several centuries of projected blue-hydrogen production emissions for the region.

However, uncertainty remains around the specifics for these storage resources, and what proportion is economically viable. The report notes that future CCUS deployment may be caught in a “chicken or the egg” situation, as projects that could reduce uncertainty will require significant investment, but attracting investment will depend on reducing uncertainty.

Among its recommendations, the report suggests that CO2 storage projects must be accelerated, with a focus on areas that have already been partially de-risked through past studies or are lower-risk due to the presence of existing infrastructure. Initiatives like the Alberta government’s recent $40 million investment in CCUS pilots are promising, and a combination of standardized assessment tools, public sharing of data related to CO2 storage studies and projects, and the development of a complete CCUS strategy supporting blue hydrogen production can help further advance this technology.

Credible, compelling, and capable

Reaching Canada’s 2050 emissions targets will require more than just reducing emissions. To act efficiently and effectively, we need to be sure the pathways we pursue towards decarbonization are credible, compelling, and capable of achieving our net-zero goals. The vision of a hydrogen economy in Western Canada—developed in collaboration with industry, government, Indigenous communities, academia, and other stakeholders—has the potential to meet those requirements. The Transition Accelerator’s latest reports are a major step towards advancing that vision.

The opportunity here is clear: Canada has the skilled and ready workforce to support a hydrogen economy, the CO2 storage capacity to make low-carbon hydrogen production viable, and the potential to build out effective value chains that will serve our short and long-term goals. But having the right ingredients isn’t enough to guarantee the right outcome. Seizing this opportunity will take coordinated strategic planning from a vast range of stakeholders—and these three reports can provide decision-makers with the tools they need to create practical transition pathways to a hydrogen economy that will drive prosperity in a net zero future.

New roadmap aims to accelerate Canada’s battery metals industry to meet EV demand

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The Transition Accelerator’s newest report is a call to action for a bold national strategy from the Battery Metals Association of Canada (BMAC) in partnership with Accelerate, Canada’s Zero Emission Vehicle Supply Chain, and the Energy Futures Lab.

A newly released report outlines a national strategy roadmap to create a made-in-Canada battery metals value chain. The roadmap outlines concrete actions, policy recommendations and cross-cutting initiatives that if implemented, have the potential to position Canada as a global competitor in electric vehicle (EV) production.

In order to retain its global position, meet its climate goals, and keep pace with growing demand, Canada will need to produce 1.3 million zero-emission vehicles (ZEVs) by 2030. Addressing the importance of battery metals to meet these needs, the report proposes a shift in the status quo. While upstream mining and downstream manufacturing are well established, the report positions midstream operations, i.e. chemical processing of mined materials into battery active materials, as the crux of a competitive, integrated supply chain driving demand for upstream mining as well as supply for fabrication.

While the development of an electric vehicle ecosystem represents a once-in-a-generation opportunity to support long-term Canadian prosperity, getting there will require deliberate, strategic action from government and industry. If Canada wants to lead the way to a net-zero world and be a competitor in its economy, we need to set bold targets, clear timelines, and collaborative goals. This report and the roadmap it provides are the first steps on the way to that robust national strategy.

Bentley Allan, Ph.D, Lead Author and Resident Fellow at The Transition Accelerator

The development of an EV ecosystem industry represents a once-in-a-generation opportunity. Working collaboratively in partnership with BMAC, the Energy Futures Lab and Accelerate, the report was led by Transition Accelerator’s Resident Fellow for Green Industrial Policy, Bentley Allan, who proposes that “Canada needs a roadmap that provides these targets, timetables, and priority actions to guide and align investments. A roadmap is, in turn, the foundation of a national industrial strategy that positions the industry in the broader domestic and international landscape”.

To accelerate Canada to net zero, the roadmap illustrates the need for a collaborative effort:

  • Reaching targets will require a public-private-Indigenous partnership
  • The formation of an independent organization and an autonomous government agency or task force
  • Guidance for said agency/task force in the form of clear targets and an adaptive set of policy tools to meet the challenge at hand.

 

The roadmap for Canada’s Battery Value Chain is just that, a mechanism to be brandished for action to provide prosperity on the path to net zero. Find the full report and executive summary here.

How Industrial Strategy Can Secure Canada’s Future in a Net-Zero World

Posted on by <a class="author-link meta-link" href="https://transitionaccelerator.ca/our-people/transition-pathway-principal/ballan/">Bentley Allan</a>, <a class="author-link meta-link" href="https://transitionaccelerator.ca/our-people/team/deaton/">Derek Eaton</a>

We need a strategic, cross-sectoral approach to industrial transition now, based on Canada’s strengths and an assessment of likely opportunities in the decarbonizing global economy.

Canada has committed to decarbonize and achieve net zero emissions by the year 2050, in less than 30 years. As identified by the Canadian Climate Institute’s Canada’s Net Zero Future and the Transition Accelerator’s Pathways to Net Zero reports, there is some clarity around which technologies will reduce emissions and power the Canadian net-zero economy. However, there remain uncertainties as to which transition pathways Canada will ultimately take.

Nonetheless, reaching net-zero emissions presents significant challenges to many industries of the Canadian economy, which relies heavily on exports (around 30% of Gross Domestic Product). The biggest case in point is the oil and gas industry, which not only accounts for around 20% of Canadian goods exports but is also responsible for 26% of Canada’s total greenhouse gas emissions.

To address these challenges and uncertainties, Canada needs to build industries that will position it in the 21st century global green economy. For that, the country needs to identify different economic opportunities across industries and strategically collaborate with various stakeholders to finance and develop these industries that will generate clean economic growth and allow the country to be globally competitive. In short and as detailed in a new report, Canada needs to develop clean competitiveness roadmaps.

What are clean competitiveness roadmaps and why do we need them

The idea for clean competitiveness roadmaps is not new. The number one recommendation from Canada’s Expert Panel on Sustainable Finance is to “map Canada’s long-term path to a low-emission, climate-smart economy, sector by sector, with an associated capital plan”. Since then, calls for roadmaps or action plans are increasing, not just from think tanks but also from the business community.

There are three main motivations for roadmaps. First, broad policy levers lay the foundation, but cannot lead to the development of green industries. Free market allocation of resources to spur clean innovation may not be efficient due to different market failures. Broad policy levers such as carbon pricing correct some of these market failures and encourage new directions for clean innovation. However, regardless of its foundational importance, carbon pricing creates incremental change and cannot fully support development of green industries alone at the pace required to address climate change mitigation and adaptation efforts. They need to be complemented with additional strategic support for industries. If this is not done, Canada may risk facing political backlash for increasing fossil fuel prices which could undermine its entire clean growth agenda.

Second, Canada’s trading partners have adopted different strategic approaches, which might lead to the country being left behind. While the federal government and some provinces have taken significant actions, Canada’s major trading partners and competitors are taking a more strategic approach to position their economies in rapidly forming low-carbon value chains. For example, the European Union has advanced a battery strategy. The United Kingdom has deployed an offshore wind industrial strategy. Canada needs to position itself against the strategic choices of other countries or risk being left behind in the global value chain.

Third, Canada needs to pursue economic opportunities that reflect its strengths in the global economy. As a small open economy, it cannot directly compete with larger countries that have more capital and capacity to scale. It also faces lower-cost competitors that can and will enter domestic markets. Moreover, it cannot rely on natural resource extraction to drive other industries. Instead, as Dan Breznitz points out in his book Innovation in Real Places, Canada needs to undertake a second generation innovation and future-proof its existing natural resource and fossil fuel based industries while building new sectors and opportunities where Canada has core advantages. If done right, this approach has the advantage of creating broad and inclusive economic prosperity.

Canada’s approach: the need to do more Canada has taken some commendable steps towards securing its future economic prosperity. The federal government created Economic Strategy Tables and the Industry Strategy Council, which focuses on a number of broad sectors. At the same time, there have been some sectoral approaches with the Small Modular Reactor Roadmap, Hydrogen Strategy and Net-Zero Carbon Concrete Roadmap. Moreover, the federal and provincial governments have a variety of funds and initiatives, spread across ministries and departments. Examples include the federal  Strategic Innovation Fund or the Advanced Research and Commercialization program in British Columbia. While existing sectoral plans, funds, and policies aim to support clean competitiveness, they are limiting progress because:

  • investments are spread thin across multiple sectors;
  • most of these investments are often one-off grants to individual firms; and
  • priorities are fragmented across departments, federal and provincial governments, and private actors.

Without a strategic approach, Canada runs the risk of uncoordinated capital spending that not only misses the country’s emissions reductions targets but also reduces competitiveness in the low-carbon economic transition.

Path forward

Recognizing the challenges and uncertainties, Canada needs to do the following:

  • Identify top economic opportunities where Canada has long-term competitive advantage or will be relatively protected from global competition. This is important considering Canada’s small open economy that means the country cannot outcompete countries with larger capital spending on innovation or lower-cost exports;
  • Build innovation clusters instead of supporting firms across different industries with one-off grants. The cluster should be centered around the core technology and consider the value chain from upstream research, resource inputs, and supporting technologies to downstream end-uses and markets; and
  • Align public and private actions by co-developing roadmaps for key sectors. The federal, provincial, and First Nations governments need to set the agenda and work with experts and the private sector to lay out targets, sequences, policies, and investments across the clusters to bring these industries to scale and pursue identified economic opportunities.

We need a strategic, cross-sectoral approach to industrial transition now, based on Canada’s strengths and an assessment of likely opportunities in the decarbonizing global economy. Other countries are doing this and new global value chains are forming. The future holds many uncertainties and this reinforces the case for a strategic approach based on collaboration, learning, and experimentation with a portfolio of opportunities.

Learn more

What if our Cities only Needed a Fraction of their Parking Spaces?

Posted on by <a class="author-link meta-link" href="https://transitionaccelerator.ca/our-people/transition-pathway-principal/dlayzell/">David Layzell</a>

Finding parking when and where you need it can be both time-consuming and stress-inducing. In pre-pandemic days at least, there never seemed to be enough parking.

However, have you ever considered the true cost of parking, and what uses could we make of that space if we could solve the personal mobility challenge with only a fraction of current parking demand? Fewer parking lots, and the elimination of street parking and driveways would certainly make our communities more attractive and people-friendly.

A new research report, released in October 2021 estimates that the annual cost to the average Canadian for personal vehicle parking is a whopping $1452 per year. For the average household of 2.6 persons, that amounts to $3775/year and for all Canada, we are looking at an annual bill of over $52B/ year, equivalent to about 3% of Canada’s gross domestic product.

Most of the parking costs are embedded in what Canadians pay for their residences, and what they pay for goods and services from commercial and institutional sectors that provide ‘free’ parking. Taking these costs into account positions parking at about 25% of the cost of personal vehicle ownership (Figure 1), equivalent to what the average Canadian pays for fuel plus vehicle maintenance in a year. Compared to other components of cost, the annualized cost of parking is second only to the cost of vehicle purchase or lease (Figure 1).

Figure 1. The cost of personal vehicle ownership and use in Canada (A) and Alberta (B)

All values are from Statistics Canada (Table: 11-10-0222-01) except the cost of parking which is estimated in the Transition Accelerator study by calculating the embedded costs of parking associated with residential, commercial, and institutional facilities.

The study was carried out by the Canadian Energy Systems Analysis Research (CESAR) initiative at the University of Calgary with support from the Alberta Real Estate Foundation and the Transition Accelerator.

The report entitled “Autonomous vehicles, parking and the real estate sector in Alberta and Canada” explores the potential implications of a shift to Autonomous Mobility-on-Demand (AMoD), where fleets of autonomous, connected and driverless vehicles will pick up and drop off passengers, effectively replacing the need for personal vehicle ownership, and the parking spaces they currently use.

On the Cusp of Transformative Change?

While fully autonomous vehicles are not commercially available today, limited self-driving features are increasingly common in new vehicles, and companies around the world are investing billions to be among the first to develop and prove fully autonomous capability. Their target is the multi-trillion-dollar global personal mobility market which is ripe for disruptive change. AMoD vehicles promise to provide a more convenient, safer, and lower-cost service.

For example, in Canada today, vehicles cost many 10’s of thousands of dollars but are typically used for only 1 to 1.5 hours/day, so 95% of the time, they are parked on some of the most expensive land in Canada. Providing a lower cost, private and convenient mobility service would not only reduce the cost of getting from ‘A’ to ‘B’ but could have significant knock-on benefits in lower costs for housing, as well as goods and services if personal vehicle parking no longer needs to be provided.

How does Alberta Compare to Canada?
On a per capita basis, Alberta has more light duty vehicles (LDV) than the Canadian average (0.73 vs. 0.62 LDV/person, respectively), and more parking spaces per vehicle (4.3 to 5.8 for Alberta vs. 3.2 to 4.4 for Canada). Consequently, the annualized cost of providing this parking in Alberta is estimated to be about 30% higher than the Canadian average.

The Scale of Parking Infrastructure
The report estimated that Canada has 71 to 97 million parking spaces for the 23 million light duty vehicles in the nation, or 3.2 to 4.4 parking spaces for every vehicle in Canada. About 40% of these spaces are associated with the residential sector, 26% with commercial and institutional sectors, and the balance are ‘on-road’ spaces.

AMoD and Vehicle Electrification
Research has shown that just one AMoD vehicle has the potential to provide the service that is currently met with about 8 personally owned vehicles. Therefore, in a city like Calgary with about 1 million cars on the road, 150,000 AMoD vehicles should be able to provide equivalent or better service. Of course, each AMoD vehicle will need to drive at least 8 times more than a typical personally owned vehicle (AMoD vehicles will need to move empty between customers), but that level of use is expected to strongly favour electric vehicles over internal combustion engine vehicles since the former have lower maintenance and lower fuel costs.

Hence, the movement to AMoD vehicles could become a major force in the transition to zero emission vehicles in Canada’s personal mobility sector. AMoD vehicles could also become a significant driver in the transition to a hydrogen economy. Compared to battery electric vehicles, hydrogen fuel cell electric vehicles can refuel faster, and drive further; features that could deliver a competitive advantage in an AMoD future.

How soon will this happen?
While advances in sensor and artificial intelligence technologies have been rapid, it will be many years before we see fully autonomous vehicles on the road, despite what some company executives have claimed. The early market entrants are likely to be heavy trucks running on major highways, but many years will past before we see AMoD vehicles replacing personally-owned cars on our city streets. While it is very difficult/impossible to accurately predict the future, there certainly is a movement towards vehicle autonomy and the AMoD business model. This is a trend worth watching and, if necessary, ‘nudging’ to ensure it is deployed in a way that improves our cities and enhances the quality of life for Canadians.

Implications for the Real Estate Sector
The transition of the business model for personal mobility from personal vehicle ownership to AMoD, could reduce household expenses, and increase disposable income. Implications of AMoD for the real estate sector include:

  • The transition to fully autonomous vehicles is likely to begin with luxury, personally owned vehicles that will be able to drop off their owners and drive themselves to lower cost parking lots. Strategically located, higher cost parking lots will lose customers and value.
  • Urban public transit is likely to be an early adopter of AMoD vehicles, especially in providing first mile/last mile services to connect to commuter trains and express buses. This could reduce demand for second vehicles in households, as well as parking at transit stations.
  • Widespread deployment of AMoD has the potential to dramatically reduce the use of, and demand for personally owned vehicles. In the residential sector, this may result in:
    • Removal of driveways, and conversion of garages to secondary suites, laneway housing, etc.
    • A movement against personal vehicle parking on streets, in favour of pick up and drop off (PUDO) locations, bicycle lanes and wider sidewalks,
    • Unused parking lots/ parkades associated with condominiums and apartments,
    • Elimination of minimum parking requirements for new residential construction, but new demands for safe and convenient PUDO locations.

 

  • In the commercial and Institutional sectors, AMoD deployment may result in:
    • Demolition or refurbishment of above ground parking facilities so they can be repurposed,
    • Surface parking converted to other uses, including increases in densification or greenspace,
    • More attention being paid to PUDO locations and designs.
    • Underground parking facilities will either be taken over by companies providing AMoD fleets or be allocated to other uses.
    • Reducing or eliminating street parking to allow more ‘people-friendly’ places.
    • Phasing out of car dealerships, fueling stations, vehicle service facilities etc.
    • A need to rethink how strip malls, box stores, shopping malls and specialty shops will need to adapt to a new business model for personal mobility.

 

While much uncertainty exists regarding the timing of the transition to AMoD, there is widespread understanding that this is the direction society is headed, driven by economics and convenience. The real estate sector can benefit from understanding, advancing and adapting to the transition.

Towards a Western Hydrogen Network

Posted on by Chris Bayley, Andrew Ikeman

With the recent announcement that a Southeast Alberta Hydrogen Task Force has been launched to establish a framework to implement a hydrogen economy in Southeast Alberta, Alberta’s low-carbon hydrogen economy is continuing to gain strong momentum. This announcement positions the region to potentially become Alberta’s second hydrogen HUB after its foundation report and other milestones are completed. Of course, The Edmonton Region Hydrogen HUB was launched earlier this year and is already working to break the vicious cycle of insufficient hydrogen supply and demand and position the region to become a world-leading producer, user and exporter of this low-carbon fuel the world wants.

Canada has many strengths that can make it a hydrogen superpower. It is one of the lowest cost places to make low-carbon hydrogen in the world, and Alberta’s energy workers in particular already have the skills and expertise needed to lead the way in this emerging energy field. But a Canada-wide hydrogen economy won’t emerge unless the right conditions are set and additional hydrogen HUBs are created and linked across the country. That’s why we’re working to facilitate the next phase of development: a western hydrogen network.

How are Hydrogen HUBs created?
In accordance with our research and the federal government’s Hydrogen Strategy for Canada, we have been working with local stakeholders in regions across Canada, including multiple levels of government, First Nations and industry representatives, to develop regional hydrogen HUBs. The Transition Accelerator’s four stage process for launching hydrogen HUBs is as follows below.

1. Undertake a Foundation Report

Partner with local industry, government, and academics to understand the unique opportunities of the region. Document the regional assets that could be harnessed in a transition to a hydrogen economy. This would include an evaluation of the following:

  • Production potential – identify the ability to produce low-carbon hydrogen and use byproduct hydrogen as a fuel source
  • Demand Potential – identify sources of demand from a wide range of sectors such as transportation fleets owed by governments or private companies, residential and commercial heat, and industrial use
  • Transportation opportunities – how to move hydrogen to where it is needed, such as through existing or unused pipeline infrastructure
  • Funding opportunities – opportunities from various levels of government, the private sector and philanthropic source

 

2. Develop shared visions for possible transition pathways
Build on the previous step to engage a coalition of the willing to articulate a strategy for building and connecting hydrogen supply to demand.

3. Perform a techno-economic analysis
To critically assess the ideas that are generated in the previous stage, we perform a techno-economic assessment and review the available technologies and their economic feasibility. We do not support commercialization of new technologies, and instead focus on using proven products. This review is meant to analyze big system changes rather than individual projects.

4. Build support pilot, demonstration and commercialization projects
Using the insights gained in all previous stages, create compelling arguments for public and private investments in pilot, demonstration, and commercialization projects related to hydrogen fuel cell electric buses and heavy trucks and more.

Where we are looking next
As the network of hydrogen HUBs continues to expand, we are looking at regions that can provide low-cost and low-carbon hydrogen and are connected to major transportation corridors. Some of the areas we have identified for potential future HUBs include:

  • Calgary
  • Regina
  • Winnipeg
  • Kamloops
  • Vancouver
  • Prince George

 

These areas have been identified as they meet the following criteria:

  • They have the resources to make low-cost hydrogen
  • There are substantial nearby markets for this hydrogen
  • They have the ability to connect supply to demand via road, rail or pipeline
  • They have a scale of supply and demand where the economics work without sustained public investment
  • Engaged industry, governments and academics are present.

 

This is an example of what a Western Hydrogen Network could be.

Next Steps

Hydrogen is poised to become a major energy commodity in Western Canada, which will lead to massive new investments and growth for the region. The Transition Accelerator is working to find partners to launch large scale hydrogen HUBs that will grow the network towards a viable hydrogen economy.

To meet climate goals, we can’t leave autonomous vehicles on autopilot

Posted on by Cameron Roberts

Autonomous vehicles have come to play a major role in many visions of the transportation future, with car companies, tech companies, and policymakers all proposing their own versions of a self-driving future. According to the most enthusiastic boosters, removing responsibility for driving from humans will not only make people’s lives easier and more convenient; but also make travel safer, more efficient, and less congested.

Even more potentially exciting, some predictions suggest that autonomous vehicles could radically reduce carbon emissions from the transportation sector. This prediction appears for several different levels of advancement for autonomous driving technology. Limited automation could increase the fuel efficiency of driving, while fully autonomous cars could be used to create a system of shared autonomous mobility on demand that could make car ownership itself obsolete, replacing it with a sustainable system of electric robo-taxis.

If these predictions come true, they would effectively be sustainable transportation policy on autopilot. Rather than grappling with the hard political, economic, and social dilemmas of low-carbon transportation, we could simply let a handful of clever engineers and entrepreneurs build a high-tech alternative that will gently supplant our existing system simply by being more convenient. Unfortunately, this tantalizing vision faces serious technical, economic, and political obstacles. In fact, there is also a very real risk that autonomous vehicles could increase carbon emissions from transportation. Both of these scenarios are addressed in a new report released by The Transition Accelerator.

Many of the potential efficiency gains from low levels of automation depend on how people will use autonomous vehicles in practice, rather than on the technology itself. “Eco-driving”, for example, could take advantage of precise digital control to make driving patterns more efficient—particularly if a majority of cars on the road are autonomous and if these cars are networked with each other. Car owners, however, might prefer to not use such a feature due to concerns about privacy and personal autonomy that are well-established in the research on this subject. This literature also reveals a devoted group of “hard-core” motorists, for whom the physical act of driving is extremely important.

The potential benefits of automation get larger at higher levels of automation, but so do both the challenges and the risks. If autonomous vehicles can drive themselves entirely independent of human intervention, then drivers could redesign them from the ground-up, for example by emphasizing efficiency over performance and by taking advantage of safer driving to remove bulky safety features. At the same time, however, it could lead to a huge increase in the total distance travelled by car. A two or three-hour commute might look less unappealing if people can work, watch TV, or even sleep en route. People might take advantage of the ability to multitask while driving to travel much longer distances, which would mean more cars on the road, more congestion, and more emissions. They might also start preferring larger and less efficient vehicles where they can stretch out and fully take advantage of their new free time while underway.

The most radical scenario for autonomous mobility is one in which fully autonomous vehicles mean that car ownership is replaced by shared autonomous taxis. Companies such as Waze and Uber are already banking on this possibility. There is, however, considerable evidence from surveys that most people would not be willing to give up their cars in favour of such a system, and would prefer to use privately-owned autonomous vehicles.

This could be partly because a car is not just a means of travel. It can also be a mobile living room and storage locker, and a way for its owner to display their class status. Self-driving taxis might therefore mainly compete with public transit and active travel rather than private cars, thereby resulting in higher carbon emissions

A major hazard associated with fully autonomous vehicles is the potential for empty vehicle-kilometers. People could send their car home rather than parking it downtown, or even dispatching it to run errands independently. This would result in a colossal increase in the total vehicle-kilometers travelled by car, which would in turn increase carbon emissions.

Many of the scenarios sketched out here are pessimistic ones, but they are plausible enough to be cause for concern. Even if the negative impacts of these scenarios are offset by other innovations, such as electric vehicles, they will still make the challenge of responding to climate change harder rather than easier.

None of this means that we should reject autonomous vehicles out of hand. It is still possible that autonomous mobility could play a major role in a future low-carbon mobility system, for example as a last-mile solution for public transit, or in the form of small, slow, shared micro-shuttles like those being piloted in Europe under the City2Mobil program. This, however, will require hard work. To make a real contribution to mitigating climate change, it is not enough just for autonomous vehicles to disrupt the mobility system; they must disrupt it in a way that acts as a force-multiplier for other forms of sustainable mobility, such as electric vehicles and public transit.

This means that autonomous vehicles will not create a low-carbon mobility system for us on autopilot. It may be an ironic conclusion, but to have the greatest benefits for the climate, autonomous vehicles will have to be manually steered.

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