Prior to May’s “climate change election”, Australians heard quite a bit about hydrogen. Chief Scientist Alan Finkel argued that the continent, with our immense wind and solar resources, was perfectly placed to develop the fuel as a low-emission replacement for fossil fuel exports. Former opposition leader Bill Shorten even pledged a $1 billion hydrogen plant in Gladstone to help kick-start the industry.
Now, a Bloomberg New Energy Finance (BNEF) report finds that the global cost of “green hydrogen” — fuel cells created from renewables via electrolysis — could fall by almost 80% by 2030, a global analysis that follows similar predictions this year.
But even if hydrogen follows a similar price trajectory to wind and solar, could it become the next great Australian gold rush? Crikey examines whether hydrogen has a role in decarbonising Australia and the practical future for this very early-stage miracle fuel*.
Can Australia use hydrogen for anything?
For everyone without a casual background in electrochemistry, hydrogen fuel can be created in one of two ways: by turning natural gas into hydrogen and carbon dioxide; or through electrolysis, which splits hydrogen and oxygen in water using electricity.
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Like gas, hydrogen can then be burnt directly — its weight-explosiveness ratio has made it particularly popular over at NASA — or turned back into electricity.
The challenge for any significant domestic application, according to Tristan Edis, Green Energy Market’s director for analysis and advisory, is that both of those functions are still wildly expensive, and unlikely to become cost-competitive in a continent as rich in solar, wind and hydro as Australia.
Even going by BNEF’s most optimistic outlook for 2030, all we get is price parity with Australia’s most expensive power source — liquified natural gas — without any of the required transport, shipping or conversion infrastructure. Electric cars — at least in the countries that have them — have easily won out over hydrogen counterparts, and ditto batteries for short-term storage.
This effectively leaves hydrogen with two major possible domestic applications: long-distance transport where battery technology cannot compete, such as freight trucking and shipping; and industrial heat processes (e.g. steelmaking or cement mixing).
“Hydrogen is very much an application where it’s kind of filling in the remaining gaps that we can’t pull off through a combination of wind, solar, pumped hydro and batteries,” Edis says. “What’s leftover for decarbonisation, that’s where hydrogen might get an opportunity to play.
“And that’s really long-distance transport and industrial heat processes. They’re very significant sources of emissions on a global level, but really the market within Australia itself … it’s a long way away, and we’ve got a lot of other things we’ve got to do before hydrogen gets its time in the sun.”
Where is the Australian industry headed?
This doesn’t mean that hydrogen has no immediate role to play in Australia.
The Australian Renewable Energy Agency (ARENA) — the historic driver of new clean technologies, which this week invested in a solar-hydrogen plant in Queensland — would likely be the best bet (although the Coalition’s win in May means both ARENA and its larger sister-corporation the CEFC are being starved of funding).
The best bet for a domestic hydrogen industry currently lies in exports. The vast majority of our 15 existing hydrogen projects and concurrent state schemes are aimed towards our higher-density neighbours looking to decarbonise — notably a recent expansion to Western Australia’s supermassive solar-wind project, the Asian Renewable Energy Hub.
The International Energy Agency even believes it would be cheaper for Japan, which has next to no room for renewables and investing heavily in hydrogen, to import clean fuel from Australia than to produce it onshore by 2030.
The country already has agreements with some Queensland and Victorian plants but, as the federal-state expansion of Loy Yang coal power station showed last year, some of this is sourced directly from coal.
And therein lies the danger of pushing hydrogen in Australia: it can be co-opted by both coal advocates looking to prolong a dying industry or gas groups like the Australian Pipelines and Gas Association, which boasts that “hydrogen can be mixed with natural gas in our distribution networks to lower emissions”.
According to ARENA, which is currently undertaking a trial of this hydrogen-gas mix in NSW, it is only considered safe if it includes 10% hydrogen.
“The gas industry is promoting a bunch of bullshit about hydrogen … trying to present the picture that gas pipelines, in particular, have a future when they really don’t,” Edis says. “And that is distorting the picture somewhat in Australia.”
“Households are not going to be putting hydrogen through a gas cooktop,” he says. “They’re going to replace it with an induction cooktop because it’s just way cheaper and ready to deploy today.”
With emissions still rising in Australia and a 100% renewable-powered grid a far-flung but distinct possibility, Australia can undoubtedly play a role in hydrogen, but should maybe get back to basic decarbonisation before filling in the cracks.
*Please note that the willpower needed to not ask “is hydrogen just a bunch of hot air?” could probably power a few Hindenburgs.
Will there be an opening for hydrogen in Australia’s energy future? Will fossil fuel interests derail meaningful change? Let us know your thoughts at firstname.lastname@example.org. Please include your full name for publication.