Perspectives: new leadership for Canadian Hydro

Power-to-gas converts surplus renewable electricity into green hydrogen or synthetic methane via electrolysis and methanation, enabling seasonal energy storage, grid balancing, hydrogen injection into gas pipelines, and decarbonization of heat, transport, and industry.

Key Points

Power-to-gas turns excess renewable power into hydrogen or methane for storage, grid support, and clean fuel.

✅ Enables hydrogen injection into existing natural gas networks

✅ Balances grids and provides seasonal energy storage capacity

✅ Supplies low-carbon fuels for industry, heat, and heavy transport

Last month Denmark’s biggest energy firm, Ørsted, said wind farms it is proposing for the North Sea will convert some of their excess power into gas. Electricity flowing in from offshore will feed on-shore electrolysis plants that split water to produce clean-burning hydrogen, with oxygen as a by-product. That would supply a new set of customers who need energy, but not as electricity. And it would take some strain off of Europe’s power grid as it grapples with an ever-increasing share of hard-to-handle EU wind and solar output on the grid.

Turning clean electricity into energetic gases such as hydrogen or methane is an old idea that is making a comeback as renewable power generation surges and crowds out gas in Europe. That is because gases can be stockpiled within the natural gas distribution system to cover times of weak winds and sunlight. They can also provide concentrated energy to replace fossil fuels for vehicles and industries. Although many U.S. energy experts argue that this “power-to-gas” vision may be prohibitively expensive, some of Europe’s biggest industrial firms are buying in to the idea.

European power equipment manufacturers, anticipating a wave of renewable hydrogen projects such as Ørsted’s, vowed in January that, as countries push for hydrogen-ready power plants across Europe, all of their gas-fired turbines will be certified by next year to run on up to 20 percent hydrogen, which burns faster than methane-rich natural gas. The natural gas distributors, meanwhile, have said they will use hydrogen to help them fully de-carbonize Europe’s gas supplies by 2050.

Converting power to gas is picking up steam in Europe because the region has more consistent and aggressive climate policies and evolving electricity pricing frameworks that support integration. Most U.S. states have goals to clean up some fraction of their electricity supply; coal- and gas-fired plants contribute a little more than a quarter of U.S. greenhouse gas emissions. In contrast, European countries are counting on carbon reductions of 80 percent or more by midcentury—reductions that will require an economywide switch to low-carbon energy.

Cleaning up energy by stripping the carbon out of fossil fuels is costly. So is building massive new grid infrastructure, including transmission lines and huge batteries, amid persistent grid expansion woes in parts of Europe. Power-to-gas may be the cheapest way forward, complementing Germany’s net-zero roadmap to cut electricity costs by a third. “In order to reach the targets for climate protection, we need even more renewable energy. Green hydrogen is perceived as one of the most promising ways to make the energy transition happen,” says Armin Schnettler, head of energy and electronics research at Munich-based electric equipment giant Siemens.

Europe already has more than 45 demonstration projects to improve power-to-gas technologies and their integration with power grids and gas networks. The principal focus has been to make the electrolyzers that convert electricity to hydrogen more efficient, longer-lasting and cheaper to produce.

The projects are also scaling up the various technologies. Early installations converted a few hundred kilowatts of electricity, but manufacturers such as Siemens are now building equipment that can convert 10 megawatts, which would yield enough hydrogen each year to heat around 3,000 homes or fuel 100 buses, according to financial consultancy Ernst & Young.

The improvements have been most dramatic for proton-exchange membrane electrolyzers, which are akin to the fuel cells used in hydrogen vehicles (but optimized to produce hydrogen rather than consume it). The price of proton-exchange electrolyzers has dropped by roughly 40 percent during the past decade, according to a study published in February in Nature Energy. They are also five times more compact than older alkaline electrolysis plants, enabling onsite hydrogen production near gas consumers, and they can vary their power consumption within seconds to operate on fluctuating wind and solar generation.

Many European pilot projects are demonstrating “methanation” equipment that converts hydrogen to methane, too, which can be used as a drop-in replacement for natural gas. Europe’s electrolyzer plants, however, are showing that methanation is not as critical to the power-to-gas vision as advocates long believed. Many electrolyzers are injecting their hydrogen directly into natural gas pipelines—something that U.S. gas firms forbid—and they are doing so without impacting either the gas infrastructure or natural gas consumers.

Europe’s first large-scale hydrogen injection began in eastern Germany in 2013 at a two-megawatt electrolyzer installed by Essen-based power firm E.ON. Germany has since ratcheted up the amount of hydrogen it allows in natural gas lines from an initial 2 percent by volume to 10 percent, in a market where renewables now outpace coal and nuclear in Germany, and other European states have followed suit with their own hydrogen allowances. Christopher Hebling, head of hydrogen technologies at the Freiburg-based Fraunhofer Institute for Solar Energy Systems, predicts that such limits will rise to the 20-percent level anticipated by Europe’s turbine manufacturers.

Moving renewable hydrogen and methane via natural gas pipelines promises to cut the cost of switching to renewable energy. For example, gas networks have storage caverns whose reserves could be tapped to run gas-fired electric generation power plants during periods of low wind and solar output. Hebling notes that Germany’s gas network can store 240 terawatt-hours of energy—roughly 25 times more energy than global power grids can presently store by pumping water uphill to refill hydropower reservoirs. Repurposing gas infrastructure to help the power system could save European consumers 138 billion euros ($156 billion) by 2050, according to Dutch energy consultancy Navigant (formerly Ecofys).

For all the pilot plants and promise, renewable hydrogen presently supplies a tiny fraction of Europe’s gas. And, globally, around 4 percent of hydrogen is supplied via electrolysis, with the bulk refined from fossil fuels, according to the International Renewable Energy Agency.

Power-to-gas is catching up, however. According to the February Nature Energy study, renewable hydrogen already pays for itself in some niche applications, and further electrolyzer improvements will progressively extend its market. “If costs continue to decline as they have done in recent years, power-to-gas will become competitive at large scale within the next decade,” says study co-author Gunther Glenk, an economist at the Technical University of Munich.

Glenk says power-to-gas could scale up faster if governments guaranteed premium prices for renewable hydrogen and methane, as they did to mainstream solar and wind power.

Tim Calver, an energy storage researcher turned consultant and Ernst & Young’s executive director in London, agrees that European governments need to step up their support for power-to-gas projects and markets. Calver calls the scale of funding to date, “not proportionate to the challenge that we face on long-term decarbonization and the potential role of hydrogen.”

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NRC Advanced Reactor Licensing streamlines a risk-informed, performance-based, technology-inclusive pathway for advanced non-light water reactors, aligning with NEIMA to enable predictable regulatory reviews, inherent safety, clean energy deployment, and industrial heat, hydrogen, and desalination applications.

Key Points

A risk-informed, performance-based NRC pathway streamlining licensing for advanced non-light water reactors.

✅ Aligned with NEIMA: risk-informed, performance-based, tech-inclusive

✅ Predictable licensing for advanced non-light water reactor designs

✅ Enables clean heat, hydrogen, desalination beyond electricity

The US Nuclear Regulatory Commission (NRC) voted 4-0 to approve the implementation of a more streamlined and predictable licensing pathway for advanced non-light water reactors, aligning with nuclear innovation priorities identified by industry advocates, the Nuclear Energy Institute (NEI) announced, and amid regional reliability measures such as New England emergency fuel stock plans that have drawn cost scrutiny.

This approach is consistent with the Nuclear Energy Innovation and Modernisation Act (NEIMA), a nuclear innovation act passed in 2019 by the US Congress calling for the development of a risk-informed, performance-based and technology inclusive licensing process for advanced reactor developers.

NEI Chief Nuclear Officer Doug True said: “A modernised regulatory framework is a key enabler of next-generation nuclear technologies that, amid ACORE’s challenge to DOE subsidy proposals in energy market proceedings, can help us meet our energy needs while protecting the climate. The Commission’s unanimous approval of a risk-informed and performance-based licensing framework paves the way for regulatory reviews to be aligned with the inherent safety characteristics, smaller reactor cores and simplified designs of advanced reactors.”

Over the last several years the industry’s Licensing Modernisation Project, sponsored by US Department of Energy, led by Southern Nuclear, and supported by NEI’s Advanced Reactor Regulatory Task Force, and influenced by a presidential order to bolster uranium and nuclear energy, developed the guidance for this new framework. Amid shifts in the fuel supply chain, including the U.S. ban on Russian uranium, this approach will inform the development of a new rule for licensing advanced reactors, which NEIMA requires.

“A well-defined licensing path will benefit the next generation of nuclear plants, especially as regions consider New England market overhaul efforts, which could meet a wide range of applications beyond generating electricity such as producing heat for industry, desalinating water, and making hydrogen – all without carbon emissions,” True noted.

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UK Electricity-Gas Price Decoupling aims to reform wholesale electricity pricing under the Energy Security Bill, shielding households from gas price spikes, supporting renewables, and easing the cost-of-living crisis through market redesign and transparent tariffs.

Key Points

Policy to decouple power prices from gas via the Energy Security Bill, stabilizing bills and reflecting renewables

✅ Breaks gas-to-power pricing link to cut electricity costs

✅ Reduces volatility; shields households from global gas shocks

✅ Highlights benefits of renewables and market transparency

Britons could be handed relief on rocketing household bills under Government plans to sever the link between the prices of gas and electricity, including proposals to restrict energy prices in the market, it has emerged.

Ministers are set to bring forward new laws under the Energy Security Bill to overhaul the UK's energy market in the face of the current cost-of-living crisis.

They have promised to provide greater protection for Britons against global fluctuations in energy prices, through a price cap on bills among other measures.

The current worldwide crisis has been exacerbated by the Ukraine war, which has sent gas prices spiralling higher.

Under the current make-up of Britain's energy market, soaring natural gas prices have had a knock-on effect on electricity costs.

But it has now been reported the new legislation will seek to prevent future shocks in the global gas market having a similar impact on electricity prices.

Yet the overhaul might not come in time to ease high winter energy costs for households ahead of this winter.

According to The Times, Business Secretary Kwasi Kwarteng will outline proposals for reforms in the coming weeks.

These will then form part of the Energy Security Bill to be introduced in the autumn, with officials anticipating a decrease in energy bills by April.

The newspaper said the plans will end the current system under which the wholesale cost of gas effectively determines the price of electricity for households.

Although more than a quarter of Britain's electricity comes from renewable sources, under current market rules it is the most expensive megawatt needed to meet demand that determines the price for all electricity generation.

This means that soaring gas prices have driven up all electricity costs in recent months, even though only around 40% of UK electricity comes from gas power stations.

Energy experts have compared the current market to train passengers having to pay the peak-period price for every journey they make.

One Government source told The Times: 'In the past it didn’t really matter because the price of gas was reasonably stable.

'Now it seems completely crazy that the price of electricity is based on the price of gas when a large amount of our generation is from renewables.'

It was also claimed ministers hope the reforms will make the market more transparent and emphasise to consumers the benefits of decarbonisation, amid an ongoing industry debate over free electricity for consumers.

A Government spokesperson said: 'The high global gas prices and linked high electricity prices that we are currently facing have given added urgency to the need to consider electricity market reform.

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Idaho Power Valmy Settlement outlines early closure of the North Valmy coal-fired plant in Nevada, accelerated depreciation recovery, a 1.17% base-rate increase, and impacts for customers, NV Energy co-ownership, and Idaho Public Utilities Commission review.

Key Points

A proposed agreement to close North Valmy early, recover costs via a 1.17% rate hike, and seek PUC approval.

✅ Unit 1 closes 2019; Unit 2 closes 2025 in Nevada.

✅ 1.17% base-rate hike; about $1.20 per 1,000 kWh monthly bill.

✅ Idaho PUC comment deadline May 25; NV Energy co-owner.

State regulators have set a May 25 deadline for public comment on a proposed settlement related to the early closure of a coal-fired plant co-owned by Idaho Power, even as some utilities plan to keep a U.S. coal plant running indefinitely in other jurisdictions.

The settlement calls for shuttering Unit 1 of the North Valmy Power Plant in Nevada in 2019, with Unit 2 closing in 2025, amid regional coal unit retirements debates. The units had been slated for closure in 2031 and 2035, respectively.

If approved by the Idaho Public Utilities Commission, the settlement would increase base rates by approximately $13.3 million, or 1.17 percent, in order to allow the company to recover its investment in the plant on an accelerated basis.

That equates to an additional $1.20 on the monthly bill of the typical residential customer using 1,000 kilowatt-hours of energy per month.

Idaho Power, which co-owns the plant with NV Energy, maintains that closing Valmy early rather than continuing to operate it until it is fully depreciated in 2035, will ultimately save customers $103 million in today's dollars.

The company said a significant decrease in market prices for electricity has made it uneconomic to operate the plant except during extremely cold or hot weather, when the demand for energy peaks, a trend underscored by transactions involving the San Juan Generating Station deal elsewhere. The company also said plant balances have increased by approximately $70 million since its last general rate case in 2011, due to routine maintenance and repairs, as well as investments required to meet environmental regulations.

The proposed settlement reflects a number of changes to Idaho Power's original proposal regarding Valmy, and comes in the wake of discussions with interested parties in February and April, against the backdrop of a broader energy debate over plant closures and reliability.

In its initial application, filed in October, Idaho Power proposed closing both units in 2025. The original proposal would have increased base rates by $28.5 million, or about 2.5 percent, in order to allow the company to recover its costs associated with the plant's accelerated depreciation, decommissioning and anticipated investments, with cautionary examples such as the Kemper power plant costs illustrating potential risks.

Concurrently, Idaho Power asked for commission approval to adjust depreciation rates for its other plants and equipment based on the result of a study it conducts every five years, as outlined in Case IPC-E-16-23. The adjustment would have led to a $6.7 million increase to base rates.

The two requests filed in October would have increased customer costs by a total of $35.2 million or 3.1 percent, leading to a $3.08 increase on the bills of the typical residential customer who uses 1,000 kilowatt-hours per month.

The proposed settlement submitted to the Commission on May 4 calls for $13,285,285 to be recovered from all customer classes through base rates until 2028, all related to the Valmy shutdown. That is an increase of 1.17 percent and would result in a $1.20 increase on the bills of the typical residential customer who uses 1,000 kilowatt-hours per month.

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TVA Rates and Renewable Energy Scrutiny spotlights electricity rates, distributed energy resources, solar and wind deployment, natural gas plans, grid access charges, energy efficiency cuts, and House oversight of lobbying, FERC inquiries, and least-cost planning.

Key Points

A congressional probe into TVA pricing and practices affecting renewables, energy efficiency, and climate goals.

✅ House panel probes TVA rates, DER and solar policies.

✅ Efficiency programs cut; least-cost planning questioned.

✅ Inquiry on lobbying, hidden fees; FERC scrutiny.

The Tennessee Valley Authority is facing federal scrutiny about its electricity rates and climate action, amid ongoing debates over network profits in other markets.

Members of the House Committee on Energy and Commerce are “requesting information” from TVA about its ratepayer bills and “out of concern” that TVA is interfering with the deployment of renewable and distributed energy resources, even as companies such as Tesla explore electricity retail to expand customer options.

“The Committee is concerned that TVA’s business practices are inconsistent with these statutory requirements to the disadvantage of TVA’s ratepayers and the environment,” the committee said in a letter to TVA CEO Jeffrey Lyash.

The four committee members — U.S. Reps. Frank Pallone, Jr. (D-NJ), Bobby L. Rush (D-IL), Diana DeGette (D-CO), and Paul Tonko (D-NY) — suggested that Tennessee Valley residents pay too much for electricity despite TVA’s relatively low rates, even as regulators have, in other cases, scrutinized mergers like the Hydro One-Avista deal to safeguard ratepayers, underscoring similar concerns. In 2020, Tennessee residents had electric bills higher than the national average, while low-income residents in Memphis have historically faced one of the highest energy burdens in the U.S.

In 2018, TVA reduced its wholesale rate while adding a grid access charge on local power companies—and interfered with the adoption of solar energy. Internal TVA documents obtained through a Freedom of Information Act request by the Energy and Policy Institute revealed that TVA permitted local power companies to impose new fees on distributed solar generation to “lessen the potential decrease in TVA load that may occur through the adoption of [behind the meter] generation.”

Additionally, the committee said TVA is not prioritizing energy conservation and efficiency or “least-cost planning” that includes renewables, as seen in oversight such as the OEB's Hydro One rates decision emphasizing cost allocation. TVA reduced its energy efficiency programs by nearly two-thirds between 2014 and 2018 and cut its energy efficiency customer incentive programs.

At this time, TVA has not aligned its long-term planning with the Biden administration’s goal to achieve a carbon-free electricity sector by 2035. TVA’s generation mix, which is roughly 60% carbon-free, comprises 39% nuclear, 19% coal, 26% natural gas, 11% hydro, 3% wind and solar, and 1% energy efficiency programs, according to TVA.

The committee is “greatly concerned that TVA has invested comparatively little to date in deploying solar and wind energy, while at the same time considering investments in new natural gas generation.”

TVA has announced plans to shutter the Kingston and Cumberland coal plants and is evaluating whether to replace this generation with natural gas, which is a fossil fuel, while debates over grid privatization raise questions about consumer benefits. TVA’s coal and natural gas plants represent most of the largest sources of greenhouses emissions in Tennessee.

TVA responded with a statement without directly addressing the committee’s concerns. TVA said its “developing and implementing emerging technologies to drive toward net-zero emissions by 2050.”

The final question that the House committee posed is whether TVA is funding any political activity. In 2019, the committee questioned TVA about its membership to the now-disbanded Utility Air Regulatory Group, a coalition that was involved in over 200 lawsuits that primarily fought Clear Air Act regulations.

TVA revealed that it had contributed $7.3 million to the industry lobbying group since 2001. Since TVA doesn’t have shareholders, customers paid for UARG membership fees, echoing findings that deferred utility costs burden customers in other jurisdictions. An Office of the Inspector General investigation couldn’t prove whether TVA’s contributions directly funded litigation because UARG didn’t have a line-by-line accounting of what they did with TVA’s dollars.

The congressional committee questioned whether TVA is still paying for lobbying or litigation that opposes “public health and welfare regulations.”

This last question follows a recent trend of questioning utilities about “hidden fees.” In December, the Federal Energy Regulatory Commission issued a Notice of Inquiry to examine how bills from investor-owned utilities might contain fees that fund political activity, and regulators have penalized firms like NT Power over customer notice practices, highlighting consumer protection. The Center for Biological Diversity filed a petition to protect electric and gas customers of investor-owned utilities from paying these fees, which may be used for lobbying, campaign-related donations and litigation.

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California Income-Based Electricity Rates propose a fixed monthly fee set by income as utilities and the CPUC weigh progressive pricing, aiming to cut low-income bills while PG&E, SCE, and SDG&E retain usage-based charges.

Key Points

CPUC plan adds income-tiered fixed fees to lower low-income bills while keeping per-kWh usage charges.

✅ Adds fixed monthly fees by income to complement per-kWh charges

✅ Cuts bills for low-income households; higher earners pay more

✅ Utilities say revenue neutral; conservation signals preserved

California’s electric bills — already some of the highest in the nation — are rising as electricity prices soar across the state, but regulators are debating a new plan to charge customers based on their income level. 

Typically what you pay for electricity depends on how much you use. But the state’s three largest electric utilities — Southern California Edison Company, Pacific Gas and Electric Company and San Diego Gas & Electric Company — have proposed a plan to charge customers not just for how much energy they use, but also based on their household income, moving toward income-based flat-fee utility bills over time. Their proposal is one of several state regulators received designed to accommodate a new law to make energy less costly for California’s lowest-income customers.

Some state Republican lawmakers are warning the changes could produce unintended results, such as weakening incentives to conserve electricity or raising costs for customers using solar energy, and some have introduced a plan to overturn the charges in the Legislature.

But the utility companies say the measure would reduce electricity bills for the lowest income customers. Those residents would save about $300 per year, utilities estimate.

California households earning more than $180,000 a year would end up paying an average of $500 more a year on their electricity bills, according to the proposal from utility companies. 

The California Public Utilities Commission’s deadline for deciding on the suggested changes is July 1, 2024, as regulators face calls for action from consumers and advocates. The proposals come at a time when many moderate and low-income families are being priced out of California by rising housing costs.  

Who wants to change the fee structure?
Lawmakers passed and Gov. Gavin Newsom signed a comprehensive energy bill last summer that mandates restructuring electricity pricing across the state. 

The Legislature passed the measure in a “trailer-bill” process that limited deliberation. Included in the 21,000-word law are a few sentences requiring the public utilities commission to establish a “fixed monthly fee” based on each customer’s household income. 

A similar idea was first proposed in 2021 by researchers at UC Berkeley and the nonprofit thinktank Next 10. Their main recommendation was to split utility costs into two buckets. Fixed charges, which everyone has to pay just to be connected to the energy grid, would be based on income levels. Variable charges would depend on how much electricity you use.

Utilities say that part of customers’ bills still will be based on usage, but the other portion will reduce costs for lower- and middle-income customers, who “pay a greater percentage of their income towards their electricity bill relative to higher income customers,” the utilities argued in a recent filing. 

They said the current billing system is unjust, regressive and fails to recognize differences in energy usage among households,

“When we were putting together the reform proposal, front and center in our mind were customers who live paycheck to paycheck, who struggle to pay for essentials such as energy, housing and food,” Caroline Winn, CEO of San Diego Gas & Electric in a statement. 

The utilities say in their proposal that the changes likely would not reduce or increase their revenues.

James Sallee, an associate professor at UC Berkeley, said the utilities’ prior system of billing customers mostly by measuring their electric use to pay for what are essentially fixed costs for power is inefficient and regressive. 

The proposed changes “will shift the burden, on average, to a more progressive system that recovers more from higher income households and less from lower income households,” he said.

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