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.
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 boss@crikey.com.au. Please include your full name for publication.
Every non-CO2 emitting option needs to be looked at. The important thing is transition to a decarbonised economy as quickly as possible.
Hydrogen only makes sense as an export. If you want to move energy in Australia, use high voltage DC. You need to build new infrastructure and surely wires are cheaper than new pipes. Hydrogen is pretty dangerous in cars, more dangerous than self-combusting Tesla batteries. Maybe hydrogen could power trains?
Basically to kick-start hydrogen economy, you need to make it from natural gas initially, but why not just transport and export natural gas, the infrastructure already exists. For new technology to be adopted it typically has to be *much* better than what it displaces, particularly if it involves replacing big lumpy sunk cost investments…
I’m not convinced. I understand hydrogen fuel cells are being rolled out domestically in Japan, and the article fails to even mention the use of hydrogen as a fossil fuel transition in the form of ammonia.
What’s really disappointing is the lack of Australian industry supplying innovative new carbon replacing products for households, as opposed to ‘pie in the sky’ big industry projects. For example, my solar panels & lithium batteries are Chinese; my solar powered reverse osmosis water maker from the USA. And there is a huge unfulfilled household market for low carbon domestic cooking and space heating/cooling for those of us who would like to quit the environmentally and politically dangerous dependence on big energy networks.
This is a disappointing and confusing article from Crikey. The last word sums up the tone of the article, “Hindenburgs”
The Hindenburg alludes to the danger of using hydrogen. In fact hydrogen is safer than the pools of petrol that we drive around with every day. Hydrogen is light, it burns upwards and it does not have a lot of energy released as heat when it burns. Tests show that a hydrogen tank fire in a car is safer than a petrol tank fire.
The author seems to be confused with the technology that he is talking about,
Quote” hydrogen fuel cells 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.”
Fuel cells are not hydrogen. Hydrogen is hydrogen and a fuel cell is a fuel cell. Fuel cells are not created by either gasification or electrolysis – hydrogen is. Hydrogen is stored in a tank. Fuel cells convert the hydrogen into electricity when the hydrogen is released into the cell.
The author also says ”
Electric cars — at least in the countries that have them — have easily won out over hydrogen counterparts, and ditto batteries for short-term storage.”
Yet if you read the linked article about storage it states,
“In the longer term, when the storage needs are discussed in terms of days or weeks, hydrogen based systems offer the cheapest form of storage, apart from biomass, which may have problems for other reasons such as the limited availability of feed-stocks.”
I presume that when we are at 100% renewable energy we will want to have power available for the periods of days when there is lower energy coming into the system than is demanded ?
Hydrogen can be used to store large amounts of “excess” renewable generation (ie when generation is higher than demand).
Batteries are incredibly expensive and only useful as very short term buffers in the system. eg 90 million dollars for the SA battery that has a capacity measured in minutes.
Beyond the dollar cost the environmental impact of other storage technologies, like batteries needs to be factored in. The author does not consider the negative impact on the environment that will result from the massive mining operations that would be required to run a significance percentage of the world’s domestic transport using metal based batteries let a lone using batteries as part of grid storage. The massive demand for the metals would also create such high prices as to render them uneconomic.
It’s also confusing that the article states that “green hydrogen” cost will fall by 80% by 2030 yet it will not be cost competitive with solar, wind ( generation technologies that are linked to the cost of producing hydrogen not storage technologies) and hydro (a storage technology) while at the same time it’s cheaper for Japan to import our hydrogen than to produce it own. As well as the fact that the linked article states hydrogen is the cheapest way to store grid energy for days or weeks.
A confusing poorly written article.
Yes this important matter deserved an expert on the subject. No mention of ammonia as a liquefied form of hydrogen storage and transport allowing a much higher energy density. This is despite the much heralded CSIRO breakthrough last year to easily extract pure hydrogen from the ammonia for final use.
The various non fossil energy storage and transport processes may well succeed fossil fuels in time but time is what we don’t have. We need an all encompassing carbon tax now. This includes an imputed price on fossil energy sourced imports. Just the suggestion could cause Barnaby to explode. Imagine that.
I just imagined Barnaby exploding …. decided to have tomato soup for dinner for some reason.
I agree we need a price on carbon to encourage decarbonisation.
More investment and R&D from government into hydrogen tech would be great too considering we are in a climate crisis.
A great example of hydrogen tech R&D is the device you mentioned that the CSIRO developed to easily convert ammonia into hydrogen thus solving issues around bulk hydrogen transport and storage.
As you say ammonia has a higher energy density than hydrogen. Even pressurised hydrogen has a much higher energy density by weight than lithium batteries. You get 1000 km of range from 8kg of compressed hydrogen in a fuel cell powered EV.
I recently saw a hydrogen product coming to market that gives drones 3 times the flight time of lithium battery powered machines due to the higher energy density (by weight) of hydrogen. The same technology can be used in full size electric aircraft. Pop in one of those devices the CSIRO developed and you have even more energy density by fueling with ammonia.
btw I note the article has been edited since my comment, “hydrogen fuel cells can be created” was change to “hydrogen can be created” however I still see that the author is saying ““green hydrogen” — fuel cells created from renewables via electrolysis – ” Not correct, fuel cells are not “green hydrogen” and are not created via electrolysis !
It’s also weird that the author compared the price prediction of “green hydrogen” in 2030 with LNG but failed to mention that the same report also mentions that the “green hydrogen” price may drop another 43% by 2050 down to 80 cents per kg.
The article also failed to mention the cost of fuel cells is rapidly dropping and is predicted to be down by 95% in 2025 over 2008 according to Toyota (other studies make similar predictions, especially when R&D is pushed).
Hydrogen production is potentially the essential intermittent consumer for wind’s intermittent supply. In the 1970s, hydrogen was found to be difficult or dangerous to pipe, store, compress, liquefy, combust or react with other chemicals. However it remained attractive as a short-term, intermediate storage of energy, better than any storage of electricity. Intermittently topping up a temporary store (such as a gasometer), it could then be used as a steady supply for a downstream process.
Recycling of CO2 into net-zero-emission liquid fuels requires a copious supply of hydrogen in well-established processes, such as the Fischer-Tropsch process currently being used in South Africa. As a supply for aviation fuel, trucking fuel, heating fuel and so on, synthetic fuel can then be quite conventionally piped, stored, compressed, combusted, transported and above all, exported to markets worldwide. Of course, it needs a carbon tax placed on its fossil competition.