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The government makes it sound as if Australia is on the cusp of a hydrogen boom, with legions of companies springing up to take the place of the dying fossil-fuel industry. But a hard look at the status of these projects tells a very different story.

Of the 65 projects under way in Australia, most are years away from starting construction, let alone pumping out electricity. Only five are up and running, and eight should be completed in the next two years.

The five that are operating include two state government and university test sites in the ACT, a clean energy hub backed by energy company ATCO in Western Australia, an Australian-Japanese project exporting hydrogen to Japan from the Latrobe Valley in Victoria, and a solar and hydrogen centre at Griffith University in Queensland.

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And while the government wants to spruik hydrogen as a fresh new industry, there are some familiar faces at the helm.

Andrew “Twiggy” Forrest is one. His Fortescue Metals is replacing its fleet of diesel coaches at its Christmas Creek iron ore mine in the Pilbara with hydrogen fuel-cell-powered coaches.

The project got $2 million from the WA Government but is not due to begin operating until at least next year. It will use electricity supplied by a new solar-gas hybrid project, also under construction.

Fortescue is also working with ATCO Australia on developing a hydrogen refuelling station in Perth. That project got $1 million from the WA Government but is still not up and running. The facilities will have fairly limited use, providing the two companies with an ability to refuel their vehicles with hydrogen.

Gas company APA Group is another big backer of hydrogen technologies. Its renewable methane demonstration project, currently under construction, received $1.1 million from the Australian Renewable Energy Agency. But it’s not due to start until mid-2022.

The other projects under construction include a Jemena “green gas” project in Western Sydney, a Toyota renewable energy hub in Victoria, and a renewable hydrogen project backed by gas company BOC in Queensland.

Tony Wood at the Grattan Institute says while there was a “lot of talk and noise” about hydrogen, most projects in Australia were still in their infancy.

“When you look under the bonnet of these vehicles, there’s not very much there,” he said. “We shouldn’t be pretending that this is at a really highly developed stage.”

Big miners are also getting involved and have been some of the biggest winners of government hydrogen handouts. BHP and Woodside Energy were among seven companies to be shortlisted for government cash as part of the Australian Renewable Energy Agency’s $70 million hydrogen funding round last June.

The aim of the funding is to help fast-track the development of renewable hydrogen.

BHP wants to use the funding to install a hydrogen electrolyser at its Kwinana nickel refinery in WA, and Woodside wants to produce hydrogen in Tasmania for domestic use in the transport sector.

Even if they do get funding, both projects are another year or two away from starting.

Wood says hydrogen has some interesting potential but faces serious economic barriers: “There’s a lot of heat but not a lot of light. The whole hydrogen story is embryonic. It’s wheel-spinning. Everyone is just thrashing around.”

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Peter Fray
Peter Fray
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