Renewable hydrogen poised for take-off

Today in Australia

• > 60 renewable hydrogen projects underway • 7 large-scale (GW) production hubs in progress (‘Australia the prospective renewable hydrogen superpower’) • $300m CEFC Advancing Hydrogen Fund – open until exhausted

A glimpse of H2 in 2022

• Electrolyser sales will quadruple to 1.8–2.5GW (458 megawatts in 2021) • China will account for 62-66% of total demand • 22 more countries will adopt hydrogen strategies in 2022 (during 2021 countries with a hydrogen strategy doubled from 13 to 26) Source: BloombergNEF Top 10 Hydrogen Predictions for 2022.

Fossil ‘fools’ generating carbon emissions

COAL 1 tonne of hydrogen generated from coal produces 18.8 tonnes CO2e When burnt directly, coal generates ~11.1 tonnes CO2e FOSSIL GAS 1 tonne of hydrogen generated from gas produces 9.3 tonnes CO2e When burnt directly, gas generates ~6 tonnes CO2e

‘CLEAN HYDROGEN’ WITH CCS 1 tonne

of hydrogen using carbon capture and storage generates around 4.8 tonnes CO2e (depending on feedstock)

1 tonne of hydrogen generated from renewable electricity = zero emissions

Source: Hydrogen Australia (a division of the Smart Energy Council) calculations from various publications

Forecasts

Electrolyser* capacity costs will fall as much as two-thirds from current levels over the next decade

BY 2040 83% fall in electrolyser costs BY 2050 > 90% fall in electrolyser costs

Minimal cost reduction in fossil gas hydrogen with CCS

‘Renewable hydrogen is likely to capture much of the market for hydrogen from 2030 onwards.’

*The key cost component of renewable hydrogen production Source: CSIRO Electrolyser costs and GenCost 2020-21

Global perspective

Hydrogen could cover ~12% of global energy use

by 2050 >30% of hydrogen could be traded across borders by 2050 (more than today’s natural gas share)

By mid-2030, green hydrogen will cost-compete with fossil-fuel hydrogen globally

Source: International Renewable Energy Agency (IRENA): Geopolitics of the Energy Transformation: The Hydrogen Factor

“Hydrogen could prove to be a missing link to a climatesafe energy future… [it is] clearly riding on the renewable energy revolution with green hydrogen emerging as a game changer for achieving climate neutrality without compromising industrial growth and social development. Green hydrogen will bring new and diverse participants to the market, diversify routes and supplies, and shift power from the few to the many.”

– Francesco La Camera, Director-General of IRENA