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Australia is emerging as a front-runner among nations vying to become hydrogen-exporting powerhouses amid fresh projections showing demand for the fuel could increase six-fold by 2050.
As governments around the world seek to scale up their emerging hydrogen industries, global resources consultancy Wood Mackenzie has identified Australia as one of the best-placed countries to tap the potential boom in the global market, backing up the federal government’s focus on the fuel as part of its push to reach net zero greenhouse gas emissions.
Consultants Wood Mackenzie has identified Australia as one of the best-placed countries to tap the potential boom in the global market.CREDIT:BLOOMBERG
“Australia, in particular, stands out from the crowd in its track record of exporting a diverse set of natural resources and minerals, sheer physical scale, solar and wind resources and substantial potential for large-scale CCS,” Wood Mackenzie research director Prakash Sharma said.
The federal Coalition this week announced a policy to reach net zero emissions by 2050, a target requiring the country to reduce or offset all greenhouse gases. Under the policy, 40 per cent of Australia’s emissions reduction will come from lower-emissions technologies, such as hydrogen, becoming cheap enough to compete with carbon-intensive industries.
So-called “blue hydrogen” – hydrogen generated with fossil fuels, combined with carbon-capture and storage to sequester the emissions before they are released into the atmosphere – is at least three times cheaper to produce than green hydrogen, which is produced with renewable electricity.
Blue hydrogen is expected to be overtaken in the future by green when production costs fall, and Australia’s abundant solar resources and proximity to Asian markets offer growth potential.
“Australia and the Middle East sit in the top echelons for solar irradiance and offer massive green hydrogen potential,” Wood Mackenzie said.
“For supply to Northeast Asia, for instance, suppliers in Australia would appear to be ahead of the pack.”
Federal Energy and Emissions Reduction Minister Angus Taylor said the industry’s potential “cannot be ignored” and argued Australia can attract $70 billion of investments over the next decade.
More than 150 million tonnes of hydrogen would be traded on the seaborne market by 2050, Wood Mackenzie said.
Hydrogen production that doesn’t generate greenhouse emissions has gained enormous international attention for its potential future applications as a zero-emissions energy source.
However, it remains nascent technology with significant questions surrounding its ability to be cost-competitive at scale.
The government’s policy released on Tuesday sets out “stretch goals” to benchmark how much cheaper zero-emissions fuels such as clean hydrogen must become before they are cost-competitive with existing fuel sources for vehicles, power generation and a range of industrial processes.
The vast majority of hydrogen currently in use powers manufacturing. It is so-called grey hydrogen, which is powered by fossil fuels and release emissions into the atmosphere.
The 100 million tonnes of hydrogen produced globally each year are used mostly in carbon-intensive industrial processes, such as fertiliser manufacturing, refining and chemicals.
The federal government has pledged more than $1 billion for hydrogen development and the NSW government last month announced up to $3 billion in grants and other incentives for producers in that state.
Australia has signed agreements with Japan, Korea, Germany and Singapore to investigate hydrogen supply chains to provide those countries with clean fuel, and the Asian Renewable Energy Hub is developing plans for a whopping 26 gigawatt green hydrogen export project in the Pilbara.
The Clean Energy Finance Corporation has a $300 million fund for hydrogen projects – including those powered by fossil fuels, and the Australian Renewable Energy Agency has $70 million available for green hydrogen projects.
Hydrogen
Hydrogen is a rare element which means it needs to be manufactured. The energy and materials can be provided by either renewable power and water, or coal and gas.
There are three methods to extract hydrogen. One is electrolysis that uses electricity to ‘split’ water, which can be powered by renewables in an emissions-free process and is known as green hydrogen.
Thermochemical reactions drive the other two methods. One uses gas and the other uses coal or gas, and for either to be a clean energy source they require carbon capture and storage to stop the emissions from the fossil fuels entering the atmosphere. These are known as blue hydrogen.
The federal government’s low emissions investment road map is “technology neutral” which means public funding is available to green and blue hydrogen. For fossil fuel production to be ‘clean’, carbon capture has to be tacked on to capture the emissions.
Proponents of renewable energy and some business leaders have raised concerns that financial support for hydrogen production powered by fossil fuels could artificially prolong the operation of the nation’s ageing fleet of coal-fired power stations, or create demand for gas which would be better directed to wind and solar projects.
www.theage.com.au
As governments around the world seek to scale up their emerging hydrogen industries, global resources consultancy Wood Mackenzie has identified Australia as one of the best-placed countries to tap the potential boom in the global market, backing up the federal government’s focus on the fuel as part of its push to reach net zero greenhouse gas emissions.
Consultants Wood Mackenzie has identified Australia as one of the best-placed countries to tap the potential boom in the global market.CREDIT:BLOOMBERG
“Australia, in particular, stands out from the crowd in its track record of exporting a diverse set of natural resources and minerals, sheer physical scale, solar and wind resources and substantial potential for large-scale CCS,” Wood Mackenzie research director Prakash Sharma said.
The federal Coalition this week announced a policy to reach net zero emissions by 2050, a target requiring the country to reduce or offset all greenhouse gases. Under the policy, 40 per cent of Australia’s emissions reduction will come from lower-emissions technologies, such as hydrogen, becoming cheap enough to compete with carbon-intensive industries.
So-called “blue hydrogen” – hydrogen generated with fossil fuels, combined with carbon-capture and storage to sequester the emissions before they are released into the atmosphere – is at least three times cheaper to produce than green hydrogen, which is produced with renewable electricity.
Blue hydrogen is expected to be overtaken in the future by green when production costs fall, and Australia’s abundant solar resources and proximity to Asian markets offer growth potential.
“Australia and the Middle East sit in the top echelons for solar irradiance and offer massive green hydrogen potential,” Wood Mackenzie said.
“For supply to Northeast Asia, for instance, suppliers in Australia would appear to be ahead of the pack.”
Federal Energy and Emissions Reduction Minister Angus Taylor said the industry’s potential “cannot be ignored” and argued Australia can attract $70 billion of investments over the next decade.
More than 150 million tonnes of hydrogen would be traded on the seaborne market by 2050, Wood Mackenzie said.
Hydrogen production that doesn’t generate greenhouse emissions has gained enormous international attention for its potential future applications as a zero-emissions energy source.
However, it remains nascent technology with significant questions surrounding its ability to be cost-competitive at scale.
The government’s policy released on Tuesday sets out “stretch goals” to benchmark how much cheaper zero-emissions fuels such as clean hydrogen must become before they are cost-competitive with existing fuel sources for vehicles, power generation and a range of industrial processes.
The vast majority of hydrogen currently in use powers manufacturing. It is so-called grey hydrogen, which is powered by fossil fuels and release emissions into the atmosphere.
The 100 million tonnes of hydrogen produced globally each year are used mostly in carbon-intensive industrial processes, such as fertiliser manufacturing, refining and chemicals.
The federal government has pledged more than $1 billion for hydrogen development and the NSW government last month announced up to $3 billion in grants and other incentives for producers in that state.
Australia has signed agreements with Japan, Korea, Germany and Singapore to investigate hydrogen supply chains to provide those countries with clean fuel, and the Asian Renewable Energy Hub is developing plans for a whopping 26 gigawatt green hydrogen export project in the Pilbara.
The Clean Energy Finance Corporation has a $300 million fund for hydrogen projects – including those powered by fossil fuels, and the Australian Renewable Energy Agency has $70 million available for green hydrogen projects.
Hydrogen
Hydrogen is a rare element which means it needs to be manufactured. The energy and materials can be provided by either renewable power and water, or coal and gas.
There are three methods to extract hydrogen. One is electrolysis that uses electricity to ‘split’ water, which can be powered by renewables in an emissions-free process and is known as green hydrogen.
Thermochemical reactions drive the other two methods. One uses gas and the other uses coal or gas, and for either to be a clean energy source they require carbon capture and storage to stop the emissions from the fossil fuels entering the atmosphere. These are known as blue hydrogen.
The federal government’s low emissions investment road map is “technology neutral” which means public funding is available to green and blue hydrogen. For fossil fuel production to be ‘clean’, carbon capture has to be tacked on to capture the emissions.
Proponents of renewable energy and some business leaders have raised concerns that financial support for hydrogen production powered by fossil fuels could artificially prolong the operation of the nation’s ageing fleet of coal-fired power stations, or create demand for gas which would be better directed to wind and solar projects.
Australia tops list of nations poised to tap hydrogen boom
Australia has a potential strategic advantage for hydrogen exports as world markets go green in the push to net zero emissions.
