Interstate rivals loom to WA hydrogen

Western Australia will be battling with other states to build a hydrogen industry, and won’t be able to rely on its traditional advantages, a senior state bureaucrat has said.

The federal government has promised cash for five hydrogen hubs across the country, with $275 million announced in April.

The Pilbara and the Mid West will be top targets for the WA government seeking to secure a portion of the funding, Department of Jobs Tourism Science and Innovation deputy director general Chris Clark said.

But other states will be pitching locations such as the Hunter Valley in New South Wales, a coal exporting region.

“We’re in a battle with the other states,” Mr Clark told the Australian Petroleum Production and Exploration Association conference today.

“Hydrogen has excited an interest (not seen) in quite a while.”

He warned WA would not necessarily have the competitive advantages it holds in existing resources export industries.

“Hydrogen is a more level playing field,” Mr Clark said.

“Something tells you having each of the states cannibalize each other is not a (good) outcome.

“A national strategy might be a good thing, but it definitely (would) be a question of which states do better and which states miss out.

“When you talk to these (project) proponents, different state governments put different things on the table… it’s a very competitive space.

“It requires governments to be quite clear on the outcomes they want to achieve.”

A case in point will be Woodside Petroleum’s planned Bell Bay green ammonia development in Tasmania.

The company is studying a potential 250 megawatt plant with Japanese partners.

Woodside vice president of technology Jason Crusan told the conference Tasmania was an advantaged location for green hydrogen production.

The island state has large scale hydropower and wind, with nearby port infrastructure.

While WA has a large land mass ready for renewables, it was not all connected by transmission wires, he said.

But he said Woodside was hoping to announce potential projects in WA.

The state government’s Mr Clark said WA would be using whatever advantage it had to attract hydrogen investment.

The government believed there were fewer regulatory barriers to the industry than initially expected, and was working through a process for legislation to resolve those hurdles.

The Department of Jobs, Science, Tourism and Innovation has already run an expressions of interest process for a green hydrogen development at Oakajee, first revealed by Business News last year.

Mr Clark said the government was studying what infrastructure it would need to provide and working on aggregating potential domestic demand sources around Geraldton.

One big benefit for WA was the local mining industry, which was seeking to decarbonise quickly and would become a demand source.

”Just to decarbonise the mining sector provides such an opportunity for hydrogen, you can do it at scale without exporting,” he said.

Hydrogen was not a finite resource like gas, and so could be produced anywhere.

The government would be focussed on making WA as attractive as possible.

“I see oil and gas transitioning through blue hydrogen (made from natural gas)… ultimately to green hydrogen,” Mr Clark said.

“It’s part of the journey I think.

“The LNG sector has experience working with gas, the skill sets are the same.”

Future Energy Exports Cooperative Research Centre chief executive Eric May said take up of hydrogen still had big challenges in cost, scale and social license.

Even the federal government’s $2 per kilogram target for hydrogen would result in a product priced at the equivalent of $16 per gigajoule for gas.

Rolling out 50 gigawatts to 100 gigawatts of renewable capacity to power electrolysers to produce green hydrogen in WA, as some had proposed, would also be tough, Professor May said.

The national renewable installation rate was only 3 gigawatts to 4 gigawatts a year, he said.

“We’ve all experienced the mining boom and what that did to labour supply,” Professor May said.

Land use issues would be a further hurdle.

“We need desalination for renewable hydrogen,” he said.

“It doesn’t take much imagination to see you could run into problems with the community too.”