Ontario Launches Hydrogen Innovation Fund


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Ontario Hydrogen Innovation Fund accelerates clean electricity integration, hydrogen storage, grid balancing, and electrolyzer pilot projects, supporting EV production, green steelmaking, and clean manufacturing under Ontario's Low-Carbon Hydrogen Strategy via IESO-administered funding.

 

Key Points

A $15M program funding hydrogen storage, grid pilots to integrate low-carbon hydrogen into Ontario's power system.

✅ Administered by IESO; applications opened April 2023.

✅ Supports existing, new, and research hydrogen projects.

✅ Backs grid storage, capacity, demand management pilots.

 

The Ontario government is establishing a Hydrogen Innovation Fund that will invest $15 million over the next three years to kickstart and develop opportunities for hydrogen to be integrated into Ontario’s clean electricity system, including hydrogen electricity storage. This launch marks another milestone in the implementation of the province’s Low-Carbon Hydrogen Strategy, supporting a growing hydrogen economy across the province, positioning Ontario as a clean manufacturing hub.

“When energy is reliable, affordable and clean our whole province wins,” said Todd Smith, Minister of Energy. “The Hydrogen Innovation Fund will help to lay the groundwork for hydrogen to contribute to our diverse energy supply, supporting game-changing investments in electric vehicle production and charging infrastructure across the province, green steelmaking and clean manufacturing that will create good paying jobs, grow our economy and reduce emissions.”

Hydrogen Innovation Fund projects would support electricity supply, capacity, battery storage and demand management, and support growth in Ontario’s hydrogen economy. The Fund will support projects across three streams:

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

The Hydrogen Innovation Fund will be administered by the Independent Electricity System Operator, which is opening applications for the fund in April 2023. Natural Resources Canada modelling shows that hydrogen could make up about 30 per cent of the country's fuels and feedstock by 2050, as provinces advance initiatives like a British Columbia hydrogen project demonstrating scale and ambition, and create 100,000 jobs in Ontario. By making investments early to explore applications for hydrogen in our clean electricity sector we are paving the way for the growth of our own hydrogen economy.

“As a fuel that can be produced and used with little to no greenhouse gas emissions, hydrogen has tremendous potential to help us meet our long-term economic and environmental goals,” said David Piccini, Minister of the Environment, Conservation and Parks. “Our government will continue to support innovation and investment in clean technologies that will position Ontario as the clean manufacturing and transportation hub of the future while leading Canada in greenhouse gas emission reductions.”

The province is also advancing work to develop the Niagara Hydrogen Centre, led by Atura Power, which would increase the amount of low-carbon hydrogen produced in Ontario by eight-fold. This innovative project would help balance the electricity grid while using previously unutilized water at the Sir Adam Beck generating station to produce electricity for a hydrogen electrolyzer, reflecting broader electrolyzer investment trends in Canada. To support the implementation of the project, the IESO entered into a contract for grid regulation services at the Sir Adam Beck station starting in 2024, which will support low-carbon hydrogen production at the Niagara Hydrogen Centre.

These investments build on Ontario’s clean energy advantage, which also includes the largest battery storage project planned in southwestern Ontario, as our government makes progress on the Low-Carbon Hydrogen Strategy that laid out eight concrete actions to make Ontario a leader in the latest frontier of energy innovation – the hydrogen economy.

 

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Climate change, not renewables, threaten grid

New Mexico Energy Transition Act advances renewable energy, battery storage, energy efficiency, and demand response to boost grid reliability during climate change-fueled heatwaves, reducing emissions while supporting solar and wind deployment.

 

Key Points

A state policy phasing out power emissions, scaling renewables and storage, bolstering grid reliability in extreme heat.

✅ Replaces coal generation with solar plus battery storage

✅ Enhances grid reliability during climate-driven heatwaves

✅ Promotes energy efficiency and demand response programs

 

While temperatures hit record highs across much of the West in recent weeks and California was forced to curb electricity service amid heat-driven grid strain that week, the power stayed on in New Mexico thanks to proactive energy efficiency and conservation measures.

Public Service Company of New Mexico on Aug. 19 did ask customers to cut back on power use during the peak demand time until 9 p.m., to offset energy supply issues due to the record-breaking heatwave that was one of the most severe to hit the West since 2006. But the Albuquerque Journal's Aug. 28 editorial, "PRC should see the light with record heat and blackouts," confuses the problem with the solution. Record temperatures fueled by climate change – not renewable energy – were to blame for the power challenges last month. And thanks to the Energy Transition Act, New Mexico is reducing climate change-causing pollution and better positioned to prevent the worst impacts of global warming.

During those August days, more than 80 million U.S. residents were under excessive heat warnings. As the Journal's editorial pointed out, California experienced blackouts on Aug. 14 and 15 as wildfires swept across the state and temperatures rose. In fact, a recent report by the University of Chicago's Climate Impact Lab found the world has experienced record heat this summer due to climate change, and heat-related deaths will continue to rise in the future.

As the recent California energy incidents show, climate change is a threat to a reliable electricity system and our health as soaring temperatures and heatwaves strain our grid, as seen in Texas grid challenges this year as well. Demand for electricity rises as people depend more on energy-intensive air conditioning. High temperatures also can decrease transmission line efficiency and cause power plant operators to scale back or even temporarily stop electricity generation.

Lobbyists for the fossil fuel industry may claim that the service interruptions and the conservation requests in New Mexico demonstrate the need for keeping fossil-fueled power generation for electricity reliability, echoing policy blame narratives in California that fault climate policies. But fossil fuel combustion still is subject to the factors that cause blackouts – while also driving climate change and making resulting heatwaves more common. After an investigation, California's own energy agencies found no substance to the claim that renewable energy use was a factor in the situation there, and it's not to blame in New Mexico, either.

New Mexico's Energy Transition Act is a bold, necessary step to limit the damage caused by climate change in the future. It creates a reasonable, cost-saving path to eliminating greenhouse gas emissions associated with generating electricity.

The New Mexico Public Regulation Commission properly applied this law when it recently voted unanimously to replace PNM's coal-fired generation at San Juan Generating Station with carbon-free solar energy and battery storage located in the Four Corners communities, a prudent step given California's looming electricity shortage warnings across the West. The development will create jobs and provide resources for the local school district and help ensure a stronger economy and a healthier future for the region.

As we expand solar and wind energy here in New Mexico, we can help ensure reliable electricity service by building out greater battery storage for renewable energy resources. Expanding regional energy markets that can dispatch the lowest-cost energy from across the region to places where it is needed most would make renewable energy more available and reduce costs, despite concerns over policy exports raised by some observers.

Energy efficiency and demand response are important when we are facing extraordinary conditions, and proven strategies to improve electricity reliability show how demand-side tools complement the grid, so it is unfortunate that the Albuquerque Journal made the unsubstantiated claim that a stray cloud will put out the lights. It was hot, supplies were tight on the electric grid, and in those moments, we should conserve. We should not use those moments to turn our back on progress.

 

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"Remarkable" New Contract Award Adds 10 GW of Renewables to UK Grid

UK Renewable Energy Auction secures 10 GW for the grid at record-low costs, led by offshore wind, floating wind, solar, and onshore wind, with inflation-indexed CfDs delivering £37/MWh strike prices and enhanced energy security.

 

Key Points

Government CfDs add 10 GW of low-cost renewables to the UK grid via offshore wind, floating wind, and solar.

✅ 10 GW capacity: 7 GW offshore wind, 2.2 GW solar, 0.9 GW onshore wind

✅ Record-low £37/MWh offshore; floating wind at £87/MWh CfD strikes

✅ 15-year indexed contracts cut exposure to volatile gas prices

 

The United Kingdom will add 10 gigawatts (GW) of renewable energy capacity to its power grid at one-quarter the cost of fossil gas after concluding its biggest-ever renewable energy auction for new renewable supplies.

The “remarkable new UK renewable auction” will meet one-eighth of the country’s current electricity demand at record low prices of just £37 per megawatt-hour for offshore wind and £87 for floating offshore systems (a dynamic echoed as wind power gains in Canada across other markets), tweeted Carbon Brief Deputy Editor Simon Evans.

“The government is increasing its reliance on a local supply of renewables amid soaring UK power prices driven by a surge in the cost of natural gas following Russia’s invasion of Ukraine,” Bloomberg Green reports. Offshore wind energy “will add about seven gigawatts of clean power capacity to the nation’s fleet from 2026, bringing Britain closer to its target of installing 50 gigawatts by the end of the decade.”

The awards also include 2.2 gigawatts (that’s 2.2 billion watts) of solar and 900 megawatts of onshore wind, even as the UK faces a renewables backlog on some projects, Bloomberg says.

“Eye-watering gas prices are hitting consumers across Europe,” said UK Business and Energy Secretary Kwasi Kwarteng. “The more cheap, clean power we generate within our own borders, the better protected we will be from volatile gas prices that are pushing up bills.”

Citing government figures, Bloomberg says wind generation costs came in 5.8% lower than the previous auction in 2019, reflecting momentum in a sector set to become a trillion-dollar business this decade. Some of the winning bidders included Ørsted, Iberdrola’s Scottish Power unit, Vattenfall, and a consortium of AB Ignitis Grupe, EDP Renovaveis, and Engie.

Offshore wind power costs have fallen dramatically in recent years as the UK supported the industry to scale up and industrialize production of larger, more efficient turbines,” the news story states. Now, “the decline in price developers are willing to accept comes even after the cost of wind turbines rose in recent months as prices increased for key metals like steel and supply chain disruptions created expensive delays.”

The 15-year, fixed-price contracts will be adjusted for inflation when the turbines are ready to start delivering electricity, offering lessons for the U.S. wind sector on contract design.

 

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Canada is a solar power laggard, this expert says

Canada Distributed Energy faces disruption as solar, smart grids, microgrids, and storage scale utility-scale renewables, challenging centralized utilities and accelerating decarbonization, grid modernization, and distributed generation across provinces like Alberta.

 

Key Points

Canada Distributed Energy shifts from centralized grids to local solar, wind, and storage for reliable low-carbon power.

✅ Morgan Solar and Enbridge launch Alberta Solar One, 13.7 MW.

✅ Optical films boost panel efficiency, lowering cost per watt.

✅ Strong utilities slow adoption of microgrids and smart grids.

 

By Nick Waddell

Disruption is coming to electricity generation but Canada has become a laggard when it comes to not just adoption of alternative energy sources but in moving to a more distributed model of electricity generation. That’s according to Mike Andrade, CEO of Morgan Solar, whose new solar project in conjunction with Enbridge has just come online in Alberta, a province known as a powerhouse for both green and fossil energy in Canada.

“There’s a lot of inertia to Canada’s electrical system and I don’t think that bodes well,” said Andrade, who spoke on BNN Bloomberg on Thursday. 

“Canada is one of the poorest places for uptake of solar, as NEB data on solar demand indicates,” Andrade said, “I believe a lot of it has to do with the fact that we have strong provincial utilities that have their mandates and their chosen technologies.”

Alberta Solar One, a 13.7 MW power facility near Lethbridge, Alberta, had its unveiling this week amid red-hot solar growth in Alberta that shows no sign of slowing. It’s a 36,500-panel farm constructed by Enbridge in a quick six-month turnaround as part of the power company’s pledge to become a carbon-free generator by 2050. Along with solar, Enbridge has made big investments in offshore and onshore wind farms in the United States, while also producing so-called green hydrogen at an Ontario plant.

Private company Morgan Solar considers the Alberta Solar One project as the first utility-scale validation of its technology, which uses optical films to redirect light onto photovoltaic cells to further power production. 

“We use an advanced modelling system and a variety of tools to design very simple optical systems that can be easily inserted into a panel,” Andrade said. “They cost less and bring down the cost per watt. It captures light that would otherwise miss the cells and so you get more power per cell area than any other commercial technology at this point.”

Like renewables in general, solar energy has been thrust into the spotlight as governments worldwide aim to make good on their climate change and emissions pledges, with analyses showing zero-emissions electricity by 2035 is possible in Canada, and convert power generation from fossil fuels to alternative sources. 

The market has paid attention, too, driving up values on renewable energy stocks across the board, including solar stocks, as provinces like Alberta explore selling renewable energy into broader markets. Last year, the Invesco Solar ETF, which tracks the MAC Global Solar Energy Index, soared 234 per cent, while Canadian companies with solar assets like Algonquin Power and Northland Power have been winners over the past few years.

Canadian cleantech companies involved in the solar power sector have also fared well, with names like UGE International (UGE International Stock Quote, Chart, News, Analyst. Financials TSXV:UGE), Aurora Solar and 5N Plus (5N Plus Stock Quote, Chart, News, Analysts, Financials TSX:VNP) having attracted investor attention of late.

Currently, part of the push in alternative energy involves the move from centralized to a more distributed picture of power generation, where solar panels, wind turbines and small modular nuclear reactors can operate close to or within sources of consumption like cities.

But Andrade says Canada has a lot of catching up to do on that front, especially as its current system seems devoted to maintaining the precedence of large, centralized power production — along with the utility companies that generate it.

“Canada is going to be left with this big, old fashioned hub and spoke model, and that’s increasingly going to be out-competed by a distributed grid, call them smart grids or micro grids,” Andrade said.

“That’s the future that solar is going to drive along with storage, and I personally don’t think Canada is prepared for it, not because we can’t do it but because regulatory and incumbency is holding us back from doing that,” he said.

“We pay our utilities, saying, ‘You invest capital and we’ll give you a fixed return on capital.’ Well, guess what? You’re going to get large, centralized capital projects which are going to get big central generation hub and spoke distribution,” Andrade said.

Ahead of the Canadian federal government’s tabling next week of its first budget in two years, many in the energy sector will be taking notes on the Liberal government’s investments in the so-called green recovery after the economic downturn, with renewable energy proponents hoping for further support, noting Alberta’s renewable energy surge could power thousands of jobs, to shift Canada’s resource sector away from fossil fuels.

By comparison, President Biden in the US recently unveiled his $2-billion infrastructure plan which put precedence on greening the country’s power grid, encouraging the adoption of electric vehicles and supporting renewable resource development, and Canadian studies suggest 2035 zero-emission power is practical and profitable as well across the national grid. 

On disruption in power generation, Andrade said there are parallels to be drawn from information technology, which has historically made a point of discarded outdated models along the way.

“I was at IBM, and they had the mainframe business and that got blown up. I also worked with Nortel and Celestica and they got blown up —and it wasn’t due to having better central hub and spoke systems. They got beat up by this distributed system,” Andrade said. 

“The same thing is going to happen here and the disruption is coming in electricity generation as well,” he said.

 

About The Author - Nick Waddell

Cantech Letter founder and editor Nick Waddell has lived in five Canadian provinces and is proud of his country's often overlooked contributions to the world of science and technology. Waddell takes a regular shift on the Canadian media circuit, making appearances on CTV, CBC and BNN, and contributing to publications such as Canadian Business and Business Insider.

 

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Bus depot bid to be UK's largest electric vehicle charging hub

First Glasgow Electric Buses will transform the Caledonia depot with 160 charging points, zero-emission operations, grid upgrades, and rapid charging, supported by Transport Scotland funding and Alexander Dennis manufacturing for cleaner urban routes by 2023.

 

Key Points

Electric single-deckers at Caledonia depot with 160 chargers and upgrades, delivering zero-emission service by 2023

✅ 160 charging points; 4-hour rapid recharge capability

✅ Grid upgrades to power a fleet equal to a 10,000-person town

✅ Supported by Transport Scotland; built by Alexander Dennis

 

First Bus will install 160 charging points and replace half its fleet with electric buses at its Caledonia depot in Glasgow.

The programme is expected to be completed in 2023, similar to Metro Vancouver's battery-electric rollout milestones, with the first 22 buses arriving by autumn.

Charging the full fleet will use the same electricity as it takes to power a town of 10,000 people.

The scale of the project means changes are needed to the power grid, a challenge highlighted in global e-bus adoption analysis, to accommodate the extra demand.

First Glasgow managing director Andrew Jarvis told BBC Scotland: "We've got to play our part in society in changing how we all live and work. A big part of that is emissions from vehicles.

"Transport is stubbornly high in terms of emissions and bus companies need to play their part, and are playing their part, in that zero emission journey."

First Bus currently operates 337 buses out of its largest depot with another four sites across Glasgow.

The new buses will be built by Alexander Dennis at its manufacturing sites in Falkirk and Scarborough.

The transition requires a £35.6m investment by First with electric buses costing almost double the £225,000 bill for a single decker running on diesel.

But the company says maintenance and running costs, as seen in St. Albert's electric fleet results, are then much lower.

The buses can run on urban routes for 16 hours, similar to Edmonton's first e-bus performance, and be rapidly recharged in just four hours.

This is a big investment which the company wouldn't be able to achieve on its own.

Government grants only cover 75% of the difference between the price of a diesel and an electric bus, similar to support for B.C. electric school buses programmes, so it's still a good bit more expensive for them.

But they know they have to do it as a social responsibility, and large-scale initiatives like US school bus conversions show the direction of travel, and because the requirements for using Low Emissions Zones are likely to become stricter.

The SNP manifesto committed to electrifying half of Scotland's 4,000 or so buses within two years.

Some are questioning whether that's even achievable in the timescale, though TTC's large e-bus fleet offers lessons, given the electricity grid changes that would be necessary for charging.

But it's a commitment that environmental groups will certainly hold them to.

Transport Scotland is providing £28.1m of funding to First Bus as part of the Scottish government's commitment to electrify half of Scotland's buses in the first two years of the parliamentary term.

Net Zero Secretary Michael Matheson said: "It's absolute critical that we decarbonise our transport system and what we have set out are very ambitious plans of how we go about doing that.

"We've set out a target to make sure that we decarbonise as many of the bus fleets across Scotland as possible, at least half of it over the course of the next couple of years, and we'll set out our plans later on this year of how we'll drive that forward."

Transport is the single biggest source of greenhouse gas emissions in Scotland which are responsible for accelerating climate change.

In 2018 the sector was responsible for 31% of the country's net emissions.

Electric bus
First Glasgow has been trialling two electric buses since January 2020.

Driver Sally Smillie said they had gone down well with passengers because they were much quieter than diesel buses.

She added: "In the beginning it was strange for them not hearing them coming but they adapt very easily and they check now.

"It's a lot more comfortable. You're not feeling a gear change and the braking's smoother. I think they're great buses to drive."

 

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Electric Cars Have Hit an Inflection Point

U.S. EV Manufacturing Expansion accelerates decarbonization as Ford and SK Innovation invest in lithium-ion batteries and truck assembly in Tennessee and Kentucky, building new factories, jobs, and supply chain infrastructure in right-to-work states.

 

Key Points

A rapid scale-up of U.S. electric vehicle production, battery plants, and assembly lines fueled by major investments.

✅ Ford and SK build battery and truck plants by 2025

✅ $11.4B investment, 11,000 jobs in TN and KY

✅ Right-to-work context reshapes union dynamics

 

One theme of this newsletter is that the world’s physical infrastructure will have to massively change if we want to decarbonize the economy by 2050, which the United Nations has said is necessary to avoid the worst effects of the climate crisis. This won’t be as simple as passing a carbon tax or a clean-electricity mandate: Wires will have to be strung as the power grid expands; solar farms will have to be erected; industries will have to be remade. And although that kind of change can be orchestrated only by the government (hence the importance of the infrastructure bills in Congress), consumers and companies will ultimately do most of the work to make it happen.

Take electric cars, for instance. An electric car is an expensive, highly specialized piece of technology, but building one takes even more expensive, specialized technology—tools that tend to be custom-made, large and heavy, and spread across a factory or the world. And if you want those tools to produce a car in a few years, you have to start planning now, as the EV timeline accelerates ahead.

That’s exactly what Ford is doing: Last night, the automaker and SK Innovation, a South Korean battery manufacturer, announced that they were spending $11.4 billion to build two new multi-factory centers in Tennessee and Kentucky that are scheduled to begin production in 2025. The facilities, which will hire a combined 11,000 employees, will manufacture EV batteries and assemble electric F-series pickup trucks. While Ford already has several factories in Kentucky, this will be its first plant in Tennessee in six decades. The 3,600-acre Tennessee facility, located an hour outside Memphis, will be Ford’s largest campus ever—and its first new American vehicle-assembly plant in decades.

The politics of this announcement are worth dwelling on. Ford and SK Innovation were lured to Tennessee with $500 million in incentives; Kentucky gave them $300 million and more than 1,500 acres of free land. Ford’s workers in Detroit have historically been unionized—and, indeed, a source of power in the national labor movement. But with these new factories, Ford is edging into a more anti-union environment: Both Tennessee and Kentucky are right-to-work states, meaning that local laws prevent unions from requiring that only unionized employees work in a certain facility. In an interview, Jim Farley, Ford’s CEO, played coy about whether either factory will be unionized. (Last week, the company announced that it was investing $250 million, a comparative pittance, to expand EV production at its unionized Michigan facilities.)

That news might depress those on the left who hope that old-school unions, such as the United Auto Workers, can enjoy the benefits of electrification. But you can see the outline of a potential political bargain here. Climate-concerned Democrats get to see EV production expand in the U.S., creating opportunities for Canada to capitalize as supply chains shift, while climate-wary Republicans get to add jobs in their home states. (And unions get shafted.) Whether that bargain can successfully grow support for more federal climate policy, further accelerating the financial-political-technological feedback loop that I’ve dubbed “the green vortex,” remains to be seen.

Read: How the U.S. made progress on climate change without ever passing a bill

More important than the announcement is what it portends. In the past, environmentalists have complained that even when the law has required that automakers make climate-friendly cars, they haven’t treated them as a major product. It’s easy to tune out climate-friendly announcements as so much corporate greenwashing, amid recurring EV hype, but Ford’s two new factories represent real money: The automaker’s share of the investment exceeds its 2019 annual earnings. This investment is sufficiently large that Ford will treat EVs as a serious business line.

And if you look around globally, you’ll see that Ford isn’t alone. EVs are no longer the neglected stepchild of the global car industry. Here are some recent headlines:

Nine percent of new cars sold globally this year will be EVs or plug-in hybrids, according to S&P Global. That’s up from 3 percent two years ago, a staggering, iPhone-like rise.

GM, Ford, Volkswagen, Toyota, BMW, and the parent company of Fiat-Chrysler have all pledged that by 2030, at least 40 percent of their new cars worldwide will run on a non-gasoline source, and there is scope for Canada-U.S. collaboration as companies turn to electric cars. A few years ago, the standard forecast was that half of new cars sold in the U.S. would be electric by 2050. That timeline has moved up significantly not only in America, but around the world. (In fact, counter to its high-tech self-image, America is the laggard in this global transition. The two largest markets for EVs worldwide are China and the European Union.)

More remarkably (and importantly), automakers are spending like they actually believe that goal: The auto industry as a whole will pump more than $500 billion into EV investment by 2030, and new assembly deals are putting Canada in the race. Ford’s investment in these two plants represents less than a third of its planned total $30 billion investment in EV production by 2025, and that’s relatively small compared with its peers’. Volkswagen has announced more than $60 billion in investment. Honda has committed $46 billion.

Norway could phase out gas cars ahead of schedule. The country has one of the world’s most robust pro-EV policies, and it is still outperforming its own mandates. In the most recent accounting period, eight out of 10 cars had some sort of electric drivetrain. If the current trend holds, Norway would sell its last gas car in April of next year—and while I doubt the demise will be that steep, consumer preferences are running well ahead of its schedule to ban new gas-car sales by 2025.

 

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Spread of Electric Cars Sparks Fights for Control Over Charging

Utility-Controlled EV Charging shapes who builds charging stations as utilities, regulators, and private networks compete over infrastructure, grid upgrades, and pricing, impacting ratepayers, competition, and EV adoption across states seeking cleaner transport.

 

Key Points

Utility-controlled EV charging is utilities building charging networks affecting rates, competition and grid costs.

✅ Regulated investment may raise rates before broader savings.

✅ Private firms warn monopolies stifle competition and innovation.

✅ Regulators balance access, equity, and grid upgrade needs.

 

Electric vehicles are widely seen as the automobile industry’s future, but a battle is unfolding in states across America over who should control the charging stations that could gradually replace fuel pumps.

From Exelon Corp. to Southern California Edison, utilities have sought regulatory approval to invest millions of dollars in upgrading their infrastructure as state power grids adapt to increased charging demand, and, in some cases, to own and operate chargers.

The proposals are sparking concerns from consumer advocates about higher electric rates and oil companies about subsidizing rivals. They are also drawing opposition from startups that say the successors to gas stations should be open to private-sector competition, not controlled by monopoly utilities.

That debate is playing out in regulatory commissions throughout the U.S. as states and utilities promote wider adoption of electric vehicles. At stake are charging infrastructure investments expected to total more than $13 billion over the next five years, as an American EV boom accelerates, according to energy consulting firm Wood Mackenzie. That would cover roughly 3.2 million charging outlets.

Calvin Butler Jr., who leads Exelon’s utilities business, said many states have grown more open to the idea of utilities becoming bigger players in charging as electric vehicles have struggled to take off in the U.S., where they make up only around 2% of new car sales.

“When the utilities are engaged, there’s quicker adoption because the infrastructure is there,” he said.

Major auto makers including General Motors Co. and Ford Motor Co. are accelerating production of electric vehicles, and models like Tesla’s Model 3 are shaping utility planning, and a number of states have set ambitious EV goals—most recently California, which aims to ban the sale of new gasoline-powered cars by 2035. But a patchy charging-station network remains a huge impediment to mass EV adoption.

Democratic presidential candidate Joe Biden has called for building more than 500,000 new public charging outlets in a decade as part of his plan to combat climate change, amid Biden’s push to electrify the transportation sector. But exactly how that would happen is unclear. The U.S. currently has fewer than 100,000 public outlets, according to the Energy Department. President Trump, who has weakened federal tailpipe emissions targets, hasn’t put forward an electric-vehicle charging plan, though he backed a 2019 transportation bill that would have provided $1 billion in grants to build alternative fueling infrastructure, including for electric vehicles.

Charging access currently varies widely by state, as does utility involvement, with many utilities bullish course on EV charging to support growth, which can range from providing rebates on home chargers to preparing sites for public charging—and even owning and operating the equipment needed to juice up electric vehicles.

As of September, regulators in 24 states had signed off on roughly $2.6 billion of utility investment in transportation electrification, according to Atlas Public Policy, a Washington, D.C., policy firm. More than half of that spending was authorized in California, where electric vehicle adoption is highest.

Nearly a decade ago, California blocked utilities from owning most charging equipment, citing concerns about potentially stifling competition. But the nation’s most populous state reversed course in 2014, seeking to spur electrification.

Regulators across the country have since been wrestling with similar questions, generating a patchwork of rules.

Maryland regulators signed off last year on a pilot program allowing subsidiaries of Exelon and FirstEnergy Corp. to own and operate public charging stations on government property, provided that the drivers who use them cover at least some of the costs.

Months later, the District of Columbia rejected an Exelon subsidiary’s request to own public chargers, saying independent charging companies had it covered.

Some charging firms argue utilities shouldn’t be given monopolies on car charging, though they might need to play a role in connecting rural customers and building stations where they would otherwise be uneconomical.

“Maybe the utility should be the supplier of last resort,” said Cathy Zoi, chief executive of charging network EVgo Services LLC, which operates more than 800 charging stations in 34 states.

Utility charging investments generally are expected to raise customers’ electricity bills, at least initially. California recently approved the largest charging program by a single utility to date: a $436 million initiative by Southern California Edison, an arm of Edison International, as the state also explores grid stability opportunities from EVs. The company said it expects the program to increase the average residential customer’s bill by around 50 cents a month.

But utilities and other advocates of electrification point to studies indicating greater EV adoption could help reduce electricity rates over time, by giving utilities more revenue to help cover system upgrades.

Proponents of having utilities build charging networks also argue that they have the scale to do so more quickly, which would lead to faster EV adoption and environmental improvements such as lower greenhouse gas emissions and cleaner air. While the investments most directly help EV owners, “they accrue immediate benefits for everyone,” said Jill Anderson, a Southern California Edison senior vice president.

Some consumer advocates are wary of approving extensive utility investment in charging, citing the cost to ratepayers.

“It’s like, ‘Pay me now, and maybe someday your rates will be less,’” said Stefanie Brand, who advocates on behalf of ratepayers for the state of New Jersey, where regulators have yet to sign off on any utility proposals to invest in electric vehicle charging. “I don’t think it makes sense to build it hoping that they will come.”

Groups representing oil-and-gas companies, which stand to lose market share as people embrace electric vehicles, also have criticized utility charging proposals.

“These utilities should not be able to use their monopoly power to use all of their customers’ resources to build investments that definitely won’t benefit everybody, and may or may not be economical at this point,” said Derrick Morgan, who leads federal and regulatory affairs at the American Fuel & Petrochemical Manufacturers, a trade organization.

Utility executives said their companies have long been used to further government policy objectives deemed to be in the public interest, drawing on lessons from 2021 to guide next steps, such as improving energy efficiency.

“This isn’t just about letting market forces work,” said Mike Calviou, senior vice president for strategy and regulation at National Grid PLC’s U.S. division.

 

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