Hydrogen market expansion

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A new report released by the Australian Renewable Energy Agency (ARENA) suggests that Australia is in a competitive position to take advantage of a growing hydrogen export market, particularly focusing on exports to Asia.

The report, prepared for ARENA by ACIL Allen Consulting, identifies opportunities for Australia to export hydrogen to help meet the potential future global demand.

Over the next decade, Australia could seize on the opportunity to export hydrogen as significant increase in demand for green hydrogen, ARENA Chief Executive Officer Ivor Frischknecht said.

“Hydrogen has long been talked about as a potential energy source. Hydrogen produces no carbon emissions when burned – only water vapour and heat, and produces more energy per kilogram than natural gas,” Mr Frischknecht said.  

Green or clean hydrogen can be produced via electrolysis from renewable electricity, or can be produced using fossil fuels with the emissions then captured and sequestered. Hydrogen could then be exported by liquefying it, or by converting it to a carrier such as ammonia.

“Australia has a golden opportunity to become a major exporter of hydrogen, as other countries look to transition to low carbon energy sources,” Mr Frischknecht said.

“If Australia can tap into our abundant wind and solar resources to produce hydrogen using renewable energy, we could export hydrogen at large scale.”

With the right conditions, Australian hydrogen exports could contribute $1.7 billion per annum to the economy and provide 2,800 jobs by 2030, the report found.

Four countries – Japan, China, the Republic of Korea and Singapore – are identified in the report as prospective markets for Australian hydrogen by 2025.

“While countries like Japan and Korea look to decrease emissions and increase renewable options, they are looking to import hydrogen at large scale but there are as yet no exporters,” Mr Frischknecht said.

According to the report, Australia is in a competitive position in regards to potential exports to Asia due to its location, excellent renewable energy resources, well established energy trading relationships and experience in large scale energy infrastructure construction.

But Australia is not alone, as countries like Norway, the United States and Middle Eastern countries are also likely to scale up their capability to export hydrogen.

“The sector is still in its infancy which places Australia in a prime position to utilise its abundant renewable resources, as well as proven track record of exporting energy and strong relationships with energy importers to become a major player in exporting hydrogen to Asia and around the globe,” Mr Frischknecht said.

A hydrogen export market has also been identified to benefit regional communities as hydrogen production facilities are likely to be located close to the supply of renewable energy, particularly large scale solar farms, the report found.

Exporting renewables, including hydrogen, is one of ARENA’s four investment priorities.

In December, ARENA announced a $20 million funding round into research and development in exporting hydrogen.

ARENA is also one of the leading agencies involved in the Hydrogen Strategy Group.

Dr Alan Finkel AO, the Chief Scientist and Chair of the Hydrogen Strategy Group, has released the Group’s briefing paper, prepared for the COAG Energy Council, Hydrogen for Australia’s Future.

Commenting on the release of the paper, Group member and Energy Networks Australia Chief Executive Officer, Andrew Dillon, said “There’s been a growing focus right across the sector on the significant opportunities hydrogen presents for Australia.”

As the report states, hydrogen can be safely added to natural gas supplies at up to 10 per cent by volume without changes to pipelines, appliances or regulations.

“From a gas distributor’s perspective, hydrogen has potential to support electricity and gas networks by allowing renewable hydrogen to be stored in existing infrastructure and then be used for providing heat or generating electricity,” said Mr Dillon.

“The storage capability of our existing gas networks is enormous, with the equivalent of six billion Tesla Powerwall batteries already in place.

“Over time, the gas networks will be able to deliver 100 per cent hydrogen as a replacement for natural gas for domestic cooking, heating and hot water.”

Mr Dillon said using renewables to generate hydrogen also creates new revenue raising opportunities for solar PV and wind generation.

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