Hydrogen a potential energy option

The cost of hydrogen production could be competitive enough for Western Australia to become a exporter in the next decade, while use in applications such as remote area power systems is not far away.

CSIRO director of hydrogen energy systems, Patrick Hartley, told a recent conference the organisation’s modelling suggested hydrogen production costs would halve, from an anticipated $5.30 per kilogram in 2020 to around $2.50 by 2025.

At that level, WA would be a competitive location for producing hydrogen using a combination of renewable generation and electrolysis, he told the Department of Primary Industries and Regional Development’s Renewable Hydrogen Conference

The gas could then be shipped to markets such as Japan, where the stored energy could be used in generators to create power, effectively making it a mechanism to harness Australia’s renewable energy resources for use overseas.

That would have a much lower capital cost and be lower risk than plans to build a high-voltage subsea cable into Indonesia, according to Australian Renewable Energy Agency (Arena) general manager of strategy Tom Campey.

Hydrogen is also one option for large-scale energy storage domestically, with batteries and pumped hydro the two other major alternatives.

Similarly, hydrogen fuel cells are competing with lithium batteries for use in electric vehicles.

Mr Campey said Arena expected global demand for hydrogen in energy could reach about 10,000 petajoules in 2040, or about 83 million tonnes.

He said that level was about 7 per cent of current natural gas demand, although he noted work by energy business Shell had calculated demand of 2,000PJ.

There are alternative methods for hydrogen production that could potentially also work to reduce carbon emissions.

One commonly used method is to extract hydrogen from natural gas, which can reduce emissions if the carbon is captured and stored.

A further alternative is to produce hydrogen from coal, in combination with carbon capture.

But the scale of these projects would be substantial.

Arena's numbers suggested that a hydrogen export industry in Australia could be valued at $1.7 billion by 2030, Mr Campey said.

That would use generation capacity about ten times that of the South West Interconnected System, however.

Numerous local projects are hoping to firm-up a hydrogen industry in WA.

Among them is the Fremantle Wind Farm Cooperative, which has considered using wind power to produce hydrogen to fuel buses.

Last week, Arena announced $22 million of funding for hydrogen projects, including $1.1 million for one in WA at the University of Western Australia.

That project, with a total value of $2.9 million was to further develop production of menthol, which carries hydrogen, from biogas.

"The renewable methanol produced from biomass, when used as a fuel and hydrogen carrier, or Australia’s liquid sunlight, can be exported globally to where cleaner energy is needed to help reduce global greenhouse gas emissions," according to Arena.

"The widespread deployment of this technology will also help significantly boost new manufacturing industry and employment opportunities as well as export of associated technology, expertise and services in Australia."

In July, gas company Atco received $1.5 million from Arena for a solar power project using hydrogen storage in Jandakot.