INSIGHT

Targeting net zero: hydrogen technologies timeline in Australia

By Kate Axup, Luisa Colosimo
Climate Change Energy Renewables Resources

How Australia is accelerating investment in hydrogen

Hailed as the 'hero' fuel by Australia's Chief Scientist Dr Alan Finkel1, hydrogen offers Australia a low-emissions, clean, storable energy solution for our future domestic energy needs. Hydrogen also presents a major export opportunity, as nearby countries like Japan, Korea and Singapore intend to rely on imported hydrogen to decarbonise their economies.

The Federal Government is making a concerted effort to restimulate the domestic economy and encourage private investment in a number of sectors – including in new hydrogen technologies. The long-term goal is to create a competitive and leading hydrogen industry, with the government setting an economic 'stretch' goal of 'H2 under 2' (ie hydrogen production under $2 per kilogram).

By 2050, it is anticipated that a hydrogen industry could create around 7,600 new jobs and billions of dollars in economic growth2. To achieve these ambitions, and position Australia as a global hydrogen player, the following initiatives have been put in place at Federal level recently. With strong policy and financial support at a Federal level, not to mention a suite of funding and policy initiatives at a state and territory level across Australia, investors can proceed with more certainty as Australia pushes towards the development of an innovative and competitive hydrogen industry.

May 2020: Hydrogen identified as a priority technology for investment in Australia's Technology Investment Roadmap Discussion Paper 

The discussion paper notes that, in the short term, hydrogen expertise and technical leadership is required to accelerate the industry and, in the medium term, scaling the production of hydrogen technologies will be important to drive costs down and ensure the industry is competitive. The discussion paper also confirms the Federal Government's commitment to working towards the 'H2 under 2' goals of producing hydrogen at below $2 a kilogram (the point at which large-scale deployment of hydrogen will be considered competitive with alternative fuels in our economy).

For more information on the Technology Investment Roadmap Discussion Paper and ARENA and CEFC funding, read our insight on the paper and its impact on public funding.
 
Interested stakeholders should provide feedback on the Technology Investment Roadmap Discussion Paper by 21 June 2020. It is expected that the feedback on the discussion paper will inform the Low Emissions Technology Statement to be published by the Federal Government later this year.
 

May 2020: To 'support the growth of a clean, innovative, safe and competitive Australian hydrogen industry3, CEFC launches a $300 million Advancing Hydrogen Fund 

The Clean Energy Finance Corporation (the CEFC) will prioritise projects that: 
  • promote the objectives of Australia's National Hydrogen Strategy, 
  • focus on hydrogen production, the development of export and domestic hydrogen supply chains (including export infrastructure);
  • the establishment of hydrogen hubs and other projects that will help promote domestic hydrogen demand; and
  • are included in the ARENA Renewable Hydrogen Deployment Funding Round.
The CEFC's funds will be given to eligible larger-scale commercial projects which require typically more than $10 million or more of CEFC capital, which may also be financed in partnership with other co-financiers or equity partners.
 

April 2020: To accelerate hydrogen electrolyser technology in Australia, ARENA released a $70 million Renewable Hydrogen Deployment Funding Round

The Australian Renewable Energy Agency (ARENA) is looking in particular to fund projects that:
  • are aligned with Australia's National Hydrogen Strategy; 
  • involve feasibility studies into the development of 100+ MW electrolysers; and/or
  • involve commercial-scale deployment of 10+ MW electrolyser technologies to drive the commercialisation of key electrolyser component technologies, which in turn will reduce the costs of producing green hydrogen.
To date, ARENA has contributed more than $55 million towards pre-commercial renewable hydrogen projects.

Expressions of interest for the Renewable Hydrogen Deployment Funding Round closed on 26 May 2020. In terms of next steps, ARENA will invite shortlisted projects to provide a full application, with the aim to award funds before the end of 2020.
 

November 2019: Australia releases its National Hydrogen Strategy to position the country as a major global player in the hydrogen industry by 20304.

The strategy developed by the hydrogen working group of the COAG Energy Council led by Dr Alan Finkel, identifies 57 nationally coordinated government actions to be taken by the Federal Government, states and territories, with support from the private sector and research community. These actions focus on supporting the research and development of hydrogen production technologies, developing a responsive regulatory framework, encouraging international engagement and ensuring community confidence.

The strategy articulates 15 measures of success to track the nation's progress, which include5:

  • Australia being in the top three hydrogen exporters to Asian markets;
  • Australia holding an excellent hydrogen-related safety track record;
  • hydrogen providing economic benefits and jobs to Australians; and
  • Australia having a robust, internationally accepted certification scheme in place.
Developing hydrogen hubs is key

The strategy recognises that a key element to realising these goals will be to create 'hydrogen hubs', where hydrogen infrastructure development will be concentrated and economies of scale can be realised. Examples of the existing hydrogen hub projects being developed in Australia include:

  • the Asian Renewable Energy Hub in the Pilbara region of Western Australia, which will involve (amongst other things) the generation of 12GW of green hydrogen production;
  • ATCO's Clean Energy Innovation Hub in Western Australia, which is a $3.3million research and development facility and includes a demonstration project that integrates green hydrogen production, fuel cell technology and renewable energy to create a microgrid setup;
  • the H2-Hub project in Gladstone, Queensland, which is a proposed multi-billion dollar complex for the production of green hydrogen and ammonia at an industrial scale;
  • ENGIE and YARA's feasibility study into the development of a green hydrogen plant to be integrated with YARA's existing ammonia plant in the Pilbara;
  • Jemena's Western Sydney Green Gas Project, which is a $15 million trial involving the conversion of solar and wind power into hydrogen gas using electrolyser technology; and
  • Australian Gas Network's Hydrogen Park in South Australia involving the production of green hydrogen using water, renewable electricity and electrolyser technology.

Watch this space

Other initiatives which are still at an early stage, but are worth watching:

  • The Federal Government has launched a consultation survey in relation to the development of a hydrogen certification scheme (to track the underlying source of hydrogen), and are seeking industry views by 22 June.
  • The Australian Greens party has introduced the Coronavirus Economic Support and Recovery (No-one Left Behind) Bill 2020, which purports to establish a Coronavirus Economic Support and Recovery Fund that would see $2 billion provided to ARENA and $6 billion towards setting up an electricity transmission fund to support the construction of new electricity transmission infrastructure in Australia. The explanatory materials suggest that some of this money could be put towards hydrogen related investment projects.

Footnotes

  1. Dr Alan Finkel's address to the National Press Club in Canberra on 12 February 2020.

  2. Australia's National Hydrogen Strategy, page 17.

  3. Section 14(5) of the Clean Energy Finance Corporation Investment Mandate Direction 2020.

  4. Australia's National Hydrogen Strategy, 71.

  5. Australia's National Hydrogen Strategy, pages 70-72.