Aug 16, 2021
– Over 40 hydrogen projects have been announced in Australia with a potential capacity of 7.0 MT H2/year by 2030, representing a third of total announced capacity.
– Australia has plans to build two of the largest green hydrogen projects in the world
– Japan aims to become a ‘hydrogen society by 2050, Australia well positioned to supply growing hydrogen demand
The interest in hydrogen as a future clean energy feedstock and carrier is snowballing as governments around the world are planning their deep decarbonization goals and strategies. As a result, the global demand for hydrogen is rising. The future growth in demand can be even more promising considering the downstream applications in power, industrial, and transport (including marine) sectors.
Australia has established itself as a top exporter of key commodities such as coal, iron ore, and natural gas to the major economies of the region – China, Japan, South Korea, and India. It is also among the few countries that are uniquely placed to produce hydrogen at scale. In addition, Australia’s sizeable brown coal (lignite) reserves with carbon content as high as 60-70% could provide low-cost clean Hydrogen from coal gasification with carbon capture and sequestration (CCS) which can help kick-start the hydrogen export industry. Platts Australia Hydrogen price assessments for Victoria for lignite gasification with CCS were in the range of A$ 0.77-3.48/Kg for both with/without CAPEX considerations on Aug. 16. Although there are concerns around how clean such hydrogen can really be, given incremental energy needs/emission and upstream supply releases. Large-scale investments in clean technologies producing green hydrogen may follow as they mature and become economical over time.Platts Hydrogen Production Asset Database has seen around 7.0 MT H2/year of announced hydrogen capacity from renewables by 2030 (refer to Fig. 1), catering to the demand primarily from power, industrial, chemicals, and mobility sectors1 (refer to Fig. 2).
In addition to domestic consumption, there appears to be a significant potential demand for hydrogen as a fuel source from Japan which Australian hydrogen producers can target. Japan intends to cut its GHG emissions by 46% from 2013 levels and aims to achieve carbon neutrality by becoming a ‘hydrogen society’ by 2050, an upgrade from its initial targets in the Basic Hydrogen Strategy by the Ministry of Economy, Trade and Industry (METI), Japan. Over the next decade, the Government of Japan has committed a US$19.2bn (¥2 trillion) fund to develop green technologies, including hydrogen, storage batteries, and carbon recycling2. Currently, Japan has more than 4400 FCEVs on the road, and the plan is to increase the number to more than 811,000 by 2030i. Japan is planning hydrogen power generation using international hydrogen supply chains, leading to annual hydrogen procurement of around 300,000 tons (amounting to 1 GW in power generation capacity). METI in long-term plans to generate 15-30 GW of power through hydrogen with the annual procurement of 5-10 million tons of H2. Given Japan’s limited domestic H2 production capacity, Australia can target this huge H2 demand. It has a clear advantage over other H2 producers around the world in terms of the availability of low-cost clean hydrogen combined with its proximity to Japan.
Fig. 1 – Announced renewable H2 projects in Australia.
Fig. 2 – H2 end-use sectors in Australia
In past years, Australia has positioned itself as a developing hydrogen industry in the region through clean energy investments, research studies, and demonstration projects.
The Hydrogen Energy Supply Chain (HESC) project is one such pilot project that will demonstrate liquid hydrogen (LH2, H2 cooled to –253°C) transportation from Latrobe Valley in Victoria to Kobe City, Japan (planned for the year 2021). The LH2 will be transported using the world’s first LH2 carrier, Suiso Frontier, which will house a 1250 m3 vacuum-insulated double-shell-structure LH2 storage tank. The learning from this project in liquefaction, storage, and transportation will play a critical role in establishing an end-to-end supply chain between both countries.
In addition to LH2, the other viable technological options for H2 storage and transportation Include organic hydrides such as methylcyclohexane (MCH) and green liquid ammonia. Transporting liquid ammonia has an edge over the LH2 and MCH, it has higher energy density (11500 MJ/m3) than LH2 (8491 MJ/m3) on a volumetric basis combined with suitable temperature requirements, and it can carry around 17% of hydrogen by wt. compared to only 6% in case of MCH. Furthermore, ammonia has mature production technology, infrastructure, and shipping experience of many decades. For now, there are no large-scale renewable ammonia plants in Australia. Still, the country holds an edge as a likely hub of clean ammonia production, based on renewable energy potential and proximity to an end-user market in east-Asia.