Hydrogenics Corporation, a leading developer and manufacturer of hydrogen generation and fuel cell products, has entered into an agreement with Enbridge Inc. to jointly develop utility scale energy storage in North America.

This relationship also includes an equity investment of CA$5.0 million in Hydrogenics. The collaboration will bring together Hydrogenics’ expertise in water electrolysis with Enbridge’s expertise in the ownership and operation of natural gas pipeline networks and renewable energy generation.

“This clean energy solution establishes a bridge between the electricity and natural gas networks to bring seasonal storage capabilities to electricity networks. It also underscores the importance of pipelines in meeting the objective of increased renewable energy penetration,” said Chuck Szmurlo, Vice President of Alternative & Emerging Technology, Enbridge Inc.

“This is another example of how Enbridge is investing in alternative energy technologies that complement our pipeline businesses while contributing to our growth in renewable and clean energy.”

Hydrogenics Corporation is pioneering “Power-to-Gas” - an innovative way to store and transport large quantities of energy.

By feeding this excess electrical power as hydrogen gas into the natural gas grid, the stored energy is not restricted to the site of generation. Separating generation and utilization offers grid operators more flexibility and thus a higher overall system efficiency.

Daryl Wilson, Hydrogenics President and CEO noted advancing the commercialization of hydrogen energy storage solutions that have GWh (gigawatt-hour) potential for electricity storage has distinct advantages over conventional energy storage methods.

“The hydrogen solution provides unrivaled energy storage capacity and application flexibility to meet the growing need for energy storage by North America’s electricity grid operators,” he said.

The parties will work together to develop utility scale energy storage projects within Enbridge’s North American footprint. Hydrogenics will have the opportunity to participate in up to 50% ownership in a build own operate model for energy storage services.

With ‘Power-to-Gas’, the hydrogen produced during periods of excess renewable generation will be injected into the existing natural gas pipeline network, proportionally increasing the renewable energy content in natural gas pipelines for essentially the operating cost of the electrolyzer.

Small quantities of hydrogen can be manageable in existing natural gas pipeline networks. With the significant scale of the natural gas pipeline network, these same quantities of hydrogen have a very meaningful impact on electricity energy storage potential.

The natural gas pipeline network represents a vast energy storage system which already exists. The utility scale energy storage leverages existing natural gas pipeline and storage assets to enable improved operability for the electrical system.

The economics are further improved by leveraging existing gas generators to bring renewable energy back to the electrical grid where, and when, it is needed most.

The collaboration between Hydrogenics and Enbridge will initially focus on the deployment of utility scale energy storage in Ontario with the opportunity to expand into Enbridge’s operations elsewhere.

Under the agreement, Enbridge Inc. purchased from Hydrogenics 1,082,251 common shares for an aggregate purchase price of CA$5,000,000 (CA $4.62 per share).

The agreement provides, among other things, that Enbridge will have certain participation rights and, subject to certain ownership requirements, will have the right to appoint one non-voting observer to the board of directors of Hydrogenics.