TPC’s hydrogen early adopters program introduces major new element to Canada’s flagship business assistance program

Technology Partnerships Canada (TPC) is launching a new targeted business assistance program as part of the federal government’s $215-million investment in the hydrogen economy. The h2 Early Adopters (h2EA) program marks the first time TPC has introduced a new program since its inception in 1996. Unlike its central program for pre-competitive business R&D projects, the h2EA program is offering to pay half of a project’s costs — up to 75% in “exceptional circumstances” — and does not require repayment by its recipients.

The h2EA program will provide $50 million over five years — with the clock ticking as of April 1/03 — to support a select number of large integrated projects for the demonstration of technologies for the distribution, storage and production of hydrogen.Since this marks a significant departure from TPC’s regular way of providing assistance, officials stress that the two programs are very separate.

“This is the first time we have made these kinds of contributions,” says TPC executive director Jeff Parker. “There will be a firewall between this program and the typical TPC investment activity. We can’t have confusion and companies flowing back and forth between the two.”

While the level of project assistance for h2EA is higher than TPC’s traditional R&D technologies program, it still falls short of the 80% grant support for projects provided by the US Department of Energy. With that in mind, the federal government’s stacking provisions apply to h2EA. That would allow project backers to receive a total of 75% of project costs.

The h2EA program comprises the bulk of funding allocated to early adoption, with an additional $10 million directed through TPC to the Canadian Transportation Fuel Cell Alliance (CTFCA) program at Natural Resources Canada (NRCan). TPC is also reallocating $50 million from its traditional R&D program to focus on hydrogen technologies. The special operating agency of Industry Canada is therefore responsible for $110 million of the total federal commitment.

h2EA will provide non-repayable contributions of up to $40 million per project and $20 million per recipient for consortia projects involving multiple firms and research institutions. The intent is to support large demonstration projects built around the themes of the Hydrogen Village and Hydrogen Highway and support the establishment of a hydrogen industry. That includes developing of clusters and supplier and support services industries around an existing hydrogen technology base.

Authority for the h2EA program falls to Kathryn Bruce, who holds TPC’s recently created position of DG portfolio affairs. Bruce is also responsible for the management of the agency’s investment portfolio, which now exceeds $1 billion. She says TPC was chosen for a leadership role in the government’s investment in the hydrogen economy because of the expertise it has developed working with Canada’s tech- nology-intensive companies.

“We have the structure in place to deal with getting these demonstration programs up and running,” says Bruce. “TPC has also dealt with all the Industry Canada portfolio members. We want to see contributions from all members and people working together.”

The village and highway concepts were developed to promote the integrative objective of h2EA, to use existing technologies and systems to showcase relevant hydrogen infrastructure for the benefit of stakeholders, potential investors and the public. Two Hydrogen Highways are currently being planned. One is in Ontario, in particular the 900km corridor between Windsor and Montreal. The second is in the Lower Mainland of British Columbia running between the US border and Whistler, the site of the 2010 Winter Olympics.

But Bruce says h2EA projects can extend the Village and Corridor themes to embrace other aspects of the economy. She notes that the Village concept could be used to establish clusters of homes powered by hydrogen, overhaul factories and the vehicles that operate on the premises, or even produce hydrogen fishing fleets or golf courses.

“We’re entertaining any expressions of interest at this time,” she says. “There is also a social aspect to this. The objective is to be a showcase, hands-on. We need broad consensus to be very comfortable using these technologies.”

The Hydrogen Village concept is conceived as nodes along hydrogen highways, providing the necessary supplies, support services and hydrogen production required by hydrogen vehicles.

For the $50 million in funding directed toward hydrogen R&D through TPC’s traditional assistance program, it’s business as usual. The reallocation will have the effect of boosting Industry Canada’s support for hydrogen activity at the R&D level, a key proposal of the Canadian Fuel Cell Commercialization Roadmap.

“We are very well placed because of the due diligence of the TPC program,” says Bruce. “All the terms and conditions are unchanged from the regular program. It will all be WTO (World Trade Organization) compliant, pre-competitive R&D.”

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