September 11, 2020

Featuring in Smart Energy Council's Smart Energy Magazine

Thanks to the Smart Energy Council for the opportunity to be featured in this month's edition of Smart Energy Magazine.

Check out my piece below and magazine in full here.

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HYDROGEN IS THE BUZZ WORD of the moment in Australian energy circles and our governments have got the fever too. After some false starts, the stars are finally aligning for the world’s most abundant molecule and hydrogen is being primed to take off worldwide with Australia at the heart of its ascent.

Today, every Australian state and territory has a hydrogen strategy in place (Northern Territory, Queensland, South Australia, Tasmania and Western Australia), is in the process of developing one (New South Wales and Victoria) or is indicating hydrogen will feature as part of its broader energy strategy (Australian Capital Territory). Combined with the national strategy released last year and our governments are truly united in their commitment; a very rare sight to see.

On the industry side, we’ve hit a total of 36 hydrogen projects across Australia to date, both capital and feasibility, with a combined proposed investment of over$36 billion. These projects span the entire hydrogen value chain, from mobility to gas network injection,however it’s export that takes the prize with a third of all projects ultimately targeting overseas supply of hydrogen or its carriers.

Witnessing this staggering momentum over a relatively short period of time has been impressive, but also quite thrilling as we see Australia realise its renewable energy superpower status, in this instance through the imminent mass scale production and movement of hydrogen across the country and around the world.

My own journey in the hydrogen sector commenced in a much more subdued period. While working for Toyota,one of the lead proponents of hydrogen, we decided in 2015 that it was an opportune time to start talking about hydrogen mobility with Australian governments.

We imported a single fuel cell car, the Mirai, from Japan to showcase the technology with decision-makers and talk up its potential to decarbonise our transport sector. That first car to roll off the boat in Melbourne made only a fleeting visit to Australia before returning to Japan. In the space of a couple of weeks we displayed it along the east coast in the hope of generating some excitement for hydrogen and its benefits for our country.

Not only was it a challenging task creating buzz with the uninitiated five years ago – most were unaware hydrogen could be used as a transport fuel – we also had to reach as many stakeholders as possible with only three-quarters of a tank of fuel and nowhere to refill.Every gram of hydrogen was therefore precious, and we carefully planned every kilometre we drove.

We did pull it off without any breakdowns, in part due to the assistance of a car carrier to get us from city to city of course, and included a visit to Canberra with a highlight being taking the Minister for Environment atthe time, Greg Hunt for the first spin around parliament house in a hydrogen car.

Senator Kim Carr, who also took a drive that day,commented that hydrogen could be the key to resurrecting Australia’s local car manufacturing industry.

Five years later and I don’t believe anyone could have predicted how rapidly the hydrogen landscape would change. The unprecedented levels of interest from governments and industry, and the general momentum and excitement building backed by some of the country’s pre-eminent faces such as the Chief Scientist, Dr Alan Finkel has led to a shift from ‘hydrogen hype’ to actual projects on the ground.

To focus on mobility for a moment, when you look at refuelling stations, by the end of 2020 that first Mirai shipped from Japan would have five locations to refuel across Australia with a further 22 stations in the pipeline,including the recent announcement from Infinite Blue Energy for 17 stations along the east coast.

Senator Carr was also quite fortuitous with his comments in 2015 with hydrogen in fact spurring a potential reboot of car making in Australia. Automotive startup, H2X recently announced their fuel cell SUV will be produced in Port Kembla, NSW from 2022 creating around 5,000 jobs.

When we consider what has shifted over the past five years in the hydrogen landscape it’s clear that Australia’s great hydrogen hope has been driven almost in full by factors beyond our shores. Developments in the international hydrogen scene have been the number one catalyst for driving the activity we are seeing in our local hydrogen sector today.

Japan and Korea have been the key instigators of this hydrogen wave but are quickly being followed by others.Both countries are targeting hundreds of thousands of tonnes of hydrogen imports by 2030 with Japan even dedicating its Olympics to hydrogen. Unfortunately, we will need to wait another year to see the hydrogen flame in action, but it should be quite the site along with hundreds of cars and buses powered by hydrogen.

Back to Australia and today we can comfortably wave the flag for green hydrogen leadership. Consultancy group Wood Mackenzie estimated in March that the pipeline of global electrolyser capacity was 8.2 gigawatts. As of July 2020, Australia’s announced electrolyser capacity was around 5 gigawatts meaning we represent a sizeable portion of hydrogen activity and are clearly in a lead position to capture the global opportunity.

Australia’s current electrolyser leadership may soon pale in comparison to Europe however which is targeting a sizeable 40 gigawatts of electrolysis by 2030. Their recently released hydrogen strategy is aimed at creating the world’s leading hydrogen market, in part through a rapid scale-up of green hydrogen production.

This point forward will therefore be critical for Australia. As federal and state governments come to the end of stage one of their funding programs, they must be reminded that multi-decade commitments will be needed to progressively scale Australia’s hydrogen footprint to reach our major global player ambitions.

Continued financial support and measures to create a domestic market for hydrogen will be essential. Establishing targets and long-term policy signals, demand creation measures, mechanisms to mitigate investment risk and the removal of regulatory barriers will all require equal attention.

Each of these aspects must be treated as a priority if we are to reach Minister Taylor’s hydrogen economic stretch target of under $2 per kilogram (a number we far exceed today) and move the needle towards competitiveness.

And competition is already emerging, and it will be fierce. The latest major hydrogen project will see a $5 billion green hydrogen facility builtin Saudi Arabia. Targeting 650 tonnes of hydrogen per day, the project will export ammonia to global markets by 2025. This facility will be in direct competition with two of our biggest export projects – Western Australia’s Asian Renewable Energy Hub and the H2-Hub in Queensland, which are targeting approximately one gigawatt and three gigawatts of electrolysis respectively.

With projects of this magnitude on the cards as well as many more smaller scale demonstrations underway, it truly is an incredible time for hydrogen in Australia. As with any new technology however, there are headwinds on the horizon. Government and industry have so far demonstrated they are up to the challenge with some unmatched levels of collaboration seen to date, but this united approach must continue.

As the world turns to cleaner energy, the rewards from going hydrogen could be substantial and if we get it right, Australia is poised to be a sizeable beneficiary.

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