Clean Energy

The Importance of Hydrogen to Australia’s Energy Transition

There are two key reasons why hydrogen, more than any other form of energy storage, is vital for Australia’s shift from coal to renewable energy.

The first is on the plus side of the equation. As we add more renewable power, we create a need for more resilience to firm up generation in the grid. Renewables may be far cheaper and environmentally sustainable than coal and LNG, but they are also far more intermittent and unreliable. Hydrogen is probably the leading candidate as a form of chemical storage to provide this resilience. While pumped hydro can also firm up the grid, it is not transportable. Lithium battery technology (to date), has limits in terms of length of duration and its impact on the environment. Hydrogen, however, can be compressed and containerized, for long-haul trucking, shipping and ultimately even aviation, it has significant advantages.

There is another key reason why hydrogen is key to Australia’s energy transition, which tends to get less attention, but from a social point of view is perhaps even more compelling. Coal is NSW largest export by value by far. In 2015-16 it was $13.2 billion, larger than education and tourism services combined. NSW produced 246.8 million tonnes of coal over the same period. On the minus side of the equation – what happens as demand for coal declines, probably dramatically, over the next decade.

Victoria has shown remarkable foresight in its large scale Hydrogen Energy Supply Chain project, for gasification of brown coal from Latrobe Valley to produce hydrogen to be liquefied and shipped out of Port of Hastings to Kobe Japan. Of course, this new lease of life for Latrobe relies on the success of sequestration of the carbon produced in Bass Strait.

For NSW, given its geology, the opportunities for carbon sequestration are less clear. But, even if there is less NSW can do on the resources side – hydrogen still offers a path forward for the existing coal supply infrastructure. The rail, port and other associated infrastructure that depends on coal needs to diversify into future fuels – and the best candidate for that is hydrogen. Unlike, fossil fuels, hydrogen can be produced anywhere that there is cheap energy and feedstock – with recycled waste water as typically the lowest cost feedstock. Our manufacturing has generally co-located with coal ports as transport and energy costs were low. That means that transmission of low cost renewable energy via existing transmission infrastructure is achievable, and recycling of industrial waste water is already in place.

If Australia is not only to make the most of the opportunity presented by our clean energy transition, but also minimize the social and economic costs to existing communities and infrastructure, we must plan a transition. In that plan, hydrogen has a critical role to play.

The stone age did not end because we ran out of stones

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