CANADA (From news reports) -- British Columbia's premier says Prince George is one step closer to being a hub of clean power with the announcement of a new hydrogen project at a local pulp mill.

But David Eby also acknowledged the province will have to significantly increase its electricity production if it plans to capitalize on global demand for hydrogen power.

The premier made the comments at the announcement of a new project in Prince George being led by Chilliwack-based Teralta Hydrogen Solutions.

According to Teralta CEO Simon Pickup, the company will take byproduct hydrogen from Chemtrade Logistics' sodium chlorate plant in Prince George and refine them for use as hydrogen power at a nearby pulp and paper mill run by Canfor.

Once finished, Pickup said, the project should reduce the mill's natural gas use by as much as 25 per cent, and showcase "a new model for making hydrogen actually viable for industrial users."

Eby said the project is one of many in the province aimed at reducing reliance on fossil fuels.

"Today is yet another demonstration that resource workers in our province are on the front lines of fighting climate change," Eby said.

"We have seen that right here in Prince George with company's visiting from around the world to court Prince George for hydrogen export."

International interest in region

Eby said his government is projecting the global hydrogen power market will reach $87 billion by 2030 and B.C. is currently home to 19 hydrogen export project proposals.

The hope, he said, is that hydrogen will be a low-emission alternative to fossil fuels in Canada as well as Asia and other international markets.

To that end, B.C. has created a hydrogen strategy and invested $150,000 to help Prince George develop a plan for being a provincial "hydrogen hub."

The city is already home to several projects and proposals, including a hydrogen refuelling station for heavy-duty trucks and a proposed $5-billion hydrogen project from Mitsubishi north of the city, and interest from Australian billionaire Andrew Forrest in a $2-billion hydrogen and ammonia production plant through his company, Fortescue.

Electrical grid challenges

However, there is a challenge for all these projects: They rely on B.C.'s electrical grid for power at a time when the province has already had to import power due to drought while also pushing forward with plans to get more people using electric cars and electric-powered heat pumps.

Eby acknowledged these problems during Tuesday's press conference, saying his government is in talks with Fortescue about the power needed for its proposed project, which would be about 1,000 megawatts, or roughly equivalent to the production capacity of the Site C dam, which is set to come online next year after nearly a decade of construction.

He said he directed B.C. Hydro to create a task force aimed at fast-tracking more power production so the province doesn't have to turn away potential investment and the jobs that could come with them.

"There are huge economic opportunities available to us if we can expand our electrical grid," he said.