A home-grown green hydrogen industry is top of Australia’s wish list in pursuit of net zero by 2050.
Yet the stretch goal of $2 per kilogram for hydrogen production remains elusive. Despite the Morrison Government sinking more than a billion dollars into the clean hydrogen industry, competitive hydrogen still seems a long way off.*
Lachy Hayes, Partner at PwC Australia, explains why there’s more to the story than reaching some distant finish line. As an expert in integrated infrastructure and environmental transactions, he believes success is closer than we think.
He regards the development of a sustainable green hydrogen industry as a journey, with achievable milestones.
'There are points at which certain applications become viable – different applications at different points. This is a more realistic way of looking at it, and some points have already been reached,' he says.
'Hydrogen is already replacing diesel in long haul transport, and starting to look economically viable. Wastewater treatment plants are separating oxygen from hydrogen, integrating oxygen back into the system and selling or deploying hydrogen back into the market. This boosts the circularity of the existing system.'
Successful exporting nations, including Australia, have several things in common, he says, including ample land, less dense populations, and large renewables endowment at low cost.
'The goal for Argentina, Brazil, Chile, China, the Middle East and Australia is to export hydrogen. We’re all on the same journey,' he says.
“Countries like Japan, with the opposite characteristics, aim to import. Our history as Japan’s trading partner, along with our natural advantages, makes us their exporter of choice. It bodes well for our hydrogen future.”
New technology is emerging all the time. For instance, ANU researchers are testing production of hydrogen directly from solar energy, bypassing electrolysers altogether.*
'We really need to commit to these R&D projects,' Lachy Hayes says.
'It’s no good waiting for the perfect tech to come along. We need a really big push to try and commercialise low emissions tech over the next decade, if we want to get it deployed and working towards net zero.
'One tech alone won’t solve this, we have to keep looking at a range of next-gen technology. This will have an incremental impact, increasing our ability to capture carbon or power hard-to-electrify industries. Otherwise, we’re in danger of coming too late to the party.'
The current focus is largely on the supply side, Lachy explains. That is, how and where we produce the hydrogen fuel. What really excites him, however, is how and when we unlock the demand side.
'When business starts demanding the product, it incentivises further investment and deployment, larger-scale production projects, better supply chains and – ultimately – lower cost hydrogen through economies of scale,' he says.
'Hydrogen is, in places, starting to replace diesel. But we have to see quantities of fleet owners in transport, waste and cement industries, for example, ordering hydrogen fuel cell trucks, before we really start to see the ripple effect.'
Lachy believes electrolysers will follow the pricing path of other green technologies like lithium ion batteries, solar PV and wind turbines. Japan as a ready-made importer will also help.
'It’s not always linear, though. External events can disrupt the process. Electrolysers rely on certain minerals, so are sensitive to price fluctuations in the market.'
The world’s largest green hydrogen hub is proposed for WA’s Kalgoorlie, aiming to produce around 3.5 million tons from solar and wind energy.* BP, among others, is planning co-located projects in desert locations close to the WA coast.* This would harness almost 24-hour green power, from solar (during the day) and wind (blowing in at night).
Electrolysers can also be located next to export infrastructure, such as a port. Under the NSW hydrogen strategy, companies can save up to 90% in pole and wire costs, opening the door to new projects.*
Governments can have a catalytic effect on new technologies, Lachy insists.
'Fortunately, federal and state governments have mobilised behind the opportunity, putting the right regulations, funding schemes and incentives in place. Yet more is always needed. If we’re going to hit net zero by 2050, we need to be absolutely serious and focused on the steps to get us there.'