HYDROGEN HIGHLIGHTS THE CLEAN ENERGY FINANCE CORPORATION has earmarked $300 million for hydrogen projects through its Advancing Hydrogen Fund and will work alongside ARENA in supporting eligible projects through its $70 million Renewable Hydrogen Deployment Funding Round announced in mid-April to fast-track the technical and commercial viability of large-scale hydrogen production using electrolysis. Applications using electrolysers sized 10MW or larger will be preferred. Two or more hydrogen projects will be supported, with the aim of starting construction as early as 2021 in the program that could result in some of the world’s largest renewable hydrogen deployments to date. As well as investing $70 million into a new funding round, ARENA has in recent months announced support for Yara Fertilisers, Dyno Nobel and Queensland Nitrates in their quest to explore the use of renewable hydrogen to produce ammonia at their large, regional facilities. The federal government has selected hydrogen as a priority in the Technology Investment Roadmap, with the first economic goal of ‘H2 under $2’. If hydrogen can be produced at scale for $2 per kilogram or less, it would be cost competitive with natural gas and other alternatives in the energy grid. Reason to cheer if it were not for the federal government’s stated support for hydrogen generated not just from renewables but also coal and gas using carbon capture and storage technology. In what is described as a “cautiously optimistic” scenario, the National Hydrogen Strategy forecasts that Australia’s hydrogen industry could generate 7,600 jobs and $11 billion in additional GDP by 2050.
“At a time when there is much attention on investment and employment opportunities to help reinvigorate our economy, it is clear that hydrogen has an important role to play.” Ian Learmonth, CEFC A LARGE HYDROGEN ELECTROLYSER ALONGSIDE THE STANWELL CORPORATION POWER STATION in Rockhampton Is one step closer to reality, having attracted ARENA funding. The study will explore whether it is technically and economically feasible for Stanwell to produce hydrogen at scale using a 10MW or larger electrolyser. Electricity will be supplied by renewables through a power purchase agreement or large-scale generation certificates from renewable energy sources. A range of commercial pathways for renewable hydrogen will be assessed, including liquid ammonia, compressing the hydrogen for sale as a gas, and use in a gas turbine or fuel cell to generate electricity. The electrolyser could improve system security by participating in Frequency Control Ancillary Services markets or providing Fast Frequency Response to the grid.
DEMAND FOR HYDROGEN exported from Australia is estimated to be in excess of three million tonnes each year by 2040, delivering around $10 billion per annum to the economy. BloombergNEF however asserts Australia would benefit more by using hydrogen within the country to produce green steel, fertilisers and alumina for export rather than becoming a hydrogen exporting superpower. The report found the falling cost of making hydrogen from wind and solar power offers a promising route to cutting emissions in fossil fueldependent sectors of the economy such as steel, shipping and cement. It found clean hydrogen could be deployed for decades and cut up to 34 per cent of global greenhouse gas emissions from fossil fuels and industry, at a manageable cost, provided policies were enacted to facilitate the technology and drive down costs. BNEF found that renewable hydrogen could be produced for $A1.30 to $A2.60 a kilogram in most parts of the world before 2050; however Australia, capitalising on abundant solar resources, could potentially see delivered costs 20-25 per cent lower.
INDUSTRY ANALYST McKINSEY foresees the “decade of hydrogen” and a halving of production costs by 2030, with renewable hydrogen cost competitive across several sectors including commercial vehicles, long-range transport, industrial heating, residential heating and cooling.
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“In the years ahead, it will be possible to produce green hydrogen at low cost using wind and solar power, to store it underground for months, and then to pipe it on demand to power everything from ships to steel mills,” said Kobad Bhavnagri who heads up BNEF’s industrial decarbonisation division.
