New Energy Insights: Bulletin – NSW Hydrogen Hub Initiative
This article is part of our New Energy Insights series from our Energy, Infrastructure and…
In light of its recent commitment to achieve net zero emissions by 2050, Australia aims to grow its domestic hydrogen industry and position itself as a major player in the new global green economy. As the Commonwealth Scientific and Industrial Research Organisation (CSIRO) has noted, if hydrogen can be produced using low or zero emissions, it can unlock deep decarbonization possibilities right across the economy.1
As we have seen in a previous article by us on the topic (link), there have been various Government funding and support incentives available in the hydrogen sector, both at State and Federal levels. The purpose of this article is to explore some of the potential uses and markets for clean hydrogen, both domestically and internationally.2
The role of Hydrogen in Australia’s Plan to Achieve Net Zero by 2050
The Australian Government has committed to net zero emissions by 2050, relying heavily on a ‘technology led approach’. In its Long Term Emissions Reduction Plan3 (the Plan), the Government has set out how it will meet this commitment, with hydrogen featuring heavily in the Plan.
The Plan builds on the existing National Hydrogen Strategy agreed to by the Commonwealth and State Governments in 2019. One of the main aims of that strategy is to build a strong hydrogen export industry in Australia, which is now all the more salient given the fact that Australia’s key trading partners – including Japan, South Korea, the EU and USA – have also made commitments to increase their usage of clean hydrogen.4
The International Energy Agency (IEA) has described in its Future of Hydrogen Report5 how hydrogen is an important resource in the oil refining process, especially in the removal of sulphur. As countries around the world legislate to reduce sulphur content in fuel in order to further reduce emissions, the need for hydrogen will correspondingly increase. The IEA notes that the production of hydrogen for use in refineries contributes to around 20% of total refinery emissions.6 Therefore cleaner production of hydrogen will be an important part of emissions reduction strategies.
Hydrogen-fuelled heavy vehicles have no exhaust emissions and are well placed to help slash carbon emissions. The IEA has noted: “The theoretical potential for future use of hydrogen in road transport is very large. Any road transport mode can technically be powered using hydrogen, either directly using fuel cells or via hydrogen-based fuels in internal combustion engines.”7 Indeed, hydrogen appears to be critical for industries such as aviation and shipping, which will be unable to fully decarbonize without it.8
With the rail, trucking and aviation industry set to be radically altered by hydrogen technology in the coming years, heavy transport will likely experience huge growth as a result. Hydrogen-fueled trains have been used in Germany for over a year and have received glowing praise from local governments. They are quiet, cost-effective and can travel at speeds of up to 140km/h.9
In England, the first hydrogen fuel-cell plane capable of carrying passengers took its maiden flight in 2020, shortly followed by Airbus releasing the details of three hydrogen-fueled concept planes expected to be in service by 2035.10 In Australia, Andrew Forrest has announced all Fortescue trucks will be powered by clean energy before the end of the decade and eventually powered by hydrogen.11
Hydrogen may also be utilised to power public transportation. The NSW State Government intends to shift the state’s 8,000 diesel public buses to zero emissions vehicles by 2030 and is currently trialling electric buses. This reflects the broader shift to green public transport across the country, with Brisbane City Council introducing a fleet of zero emissions buses called the “Green Mobility Megawall”. Currently, these trialled buses are solar powered, however, hydrogen is predicted to be a future consideration.12
It is important to note however that the competitiveness of hydrogen-powered vehicles depends critically the economic viability of fuel cells and on the appropriate infrastructure being available such as easily accessible refuelling stations. Government can play a pivotal role here in stimulating investment and facilitating risk-sharing with the private sector in order to kickstart a hydrogen-powered clean energy future.
Ammonia, a compound of hydrogen and nitrogen, can efficiently transport and store hydrogen at a low cost. Ammonia production requires hydrogen as a feedstock, generally provided in the form of fossil gas. In 2019, ammonia represented nearly 43% of global hydrogen production, with China the largest producer followed by India and Russia.13
Ammonia, as an alternative to direct hydrogen use, does not contain carbon and can be produced from any energy resource. Ammonia storage for hydrogen energy also has a low cost per unit of stored energy. Given that ammonia storage is like that of propane, the infrastructure for ammonia storage has already been developed and ready to use, making supply more efficient and therefore financially attractive. Ammonia is also safer to store given it has a smaller flammable range.
Australia has a huge surplus of wind and solar energy to export. Shipping ammonia is currently the only viable option for Australia to export large quantities of renewable energy around the world.
Ammonia is the second most produced chemical on the plant, with most of the production used in the global agriculture industry. Approximately 88% of ammonia produced annually is consumed in the manufacturing of fertiliser used by farmers to maximise crop growth.14 In 2020, French renewables company Engie and Australian fertiliser producer Yara announced plans for large-scale renewable hydrogen and ammonia development known as the ‘Pilbara Hydrogen Hub.’15
In addition to its role as an energy carrier, ammonia can be directly used as fuel in thermal power generation. Interest in exploring ammonia as a decarbonising fuel has soared because it does not emit carbon dioxide when burned. As we have seen in a previous article (see link), JERA, Japan’s largest power generation company, announced plans in May 2021 to begin using ammonia as a fuel source in a co-firing demonstration project.
The demonstration project is designed to establish ammonia co-firing technology by burning both coal and ammonia at one of its existing large-scale commercial coal-fired power plants. The demonstration project will then be able to evaluate boiler heat absorption and the environmental impact of co-firing, including the impact of exhaust gases.
The trial could have knock-on effects for Australia’s largest wind and solar project, the 26GW Asia Renewable Energy Hub, by generating demand for Australian green energy imports. The Hub is exploring the viability of the green ammonia market, initially as a substitute for coal in power generators such as JERA’s.16
The IEA points out that the building sector accounts for 30% of global final energy usage. Nearly ¾ of this is for heating of buildings and is largely powered by fossil fuels.17 Hydrogen, as a low carbon gas, can theoretically be a cleaner source of heating. There is great potential in using hydrogen as a source of clean energy for heating in order to dramatically reduce emissions, by decarbonising the heating of buildings.
In its Hydrogen Strategy, the UK Government points out that meeting its net-zero targets will require switching to low carbon heating alternatives in order to heat the “30 million residential commercial, industrial and public sector buildings in the UK.”18 Part of its strategy to reduce emissions in this area includes trialling hydrogen as a key component of heating systems. This may include blending hydrogen into natural gas or even the use of 100% hydrogen for heating. However, this would rely on technology still in development such as fuel cells and hydrogen boilers.
The examples discussed in this article are just some of the potential uses hydrogen (and hydrogen products) can have in playing a part in the transition to a truly renewable energy sector. Not only are the sustainability opportunities clear, but so too are the economic opportunities for both Government and the private sector
The Hamilton Locke team advises across the project life cycle – from project development, grid connection, financing, construction, including the buying and selling of development and operating projects.
Matt Baumgurtel leads the Hamilton Locke Energy, Infrastructure and Resources team and specialises in renewable energy including energy storage and green hydrogen projects.
David O’Carroll is a Lawyer in the Hamilton Locke Energy Infrastructure and Resources team and specialises in renewable energy projects including wind and solar.
Chanum Torres is a paralegal in the Hamilton Locke Energy Infrastructure and Resources team and specialises in renewable energy projects including wind and solar.
1CSIRO, National Hydrogen Roadmap: Pathways to an economically sustainable hydrogen industry in Australia (2018) 1.
6Ibid, page 95.
7Ibid, page 130.