Analysis of Queensland’s relevance to national energy policy has not been hard to find in recent weeks. The Federal election result has fueled debate as to where the Sunshine State sits in the transition to renewable energy. This debate has taken place despite the state having a lofty renewable energy target of 50 per cent by 2030 and a detailed Hydrogen Industry Strategy. This latter document, released two weeks ago, signals Queensland’s intent to ‘position itself as a significant hydrogen trading partner with our international neighbours’[i]. Of these international neighbours, one is given particular attention: Japan.
So why is Japan targeted and what opportunities potentially lay ahead? We take a closer look.
Queensland’s Hydrogen Industry Strategy
It is a long-standing joke that hydrogen is the “fuel of the future … and always will be”. In recent times, this scepticism has been challenged as countries look for new, cleaner energy alternatives to combat climate change. Hydrogen has emerged as a viable option due to it being a powerful source of energy capable of being used in fuel cells and for long-term storage, which can help overcome the intermittency challenges of solar and wind energy.
Queensland’s Hydrogen Industry Strategy seeks to capitalise on these attributes, investing $19 million to support the development of hydrogen export facilities in Gladstone. The document highlights the growing race between countries to develop hydrogen technology, such as Germany’s world first hydrogen-powered trains and Norway’s decision to build two hydrogen-fueled sea vessels.
It is throughout Asia though where these efforts are particularly intense with China, Japan, Singapore and South Korea all laying out roadmaps for long-term investment in hydrogen. Because of Queensland’s close proximity to the continent alongside its vast renewable energy potential, it feels it has a ‘unique competitive advantage’ when it comes to exporting hydrogen.[ii]
The type of hydrogen that Queensland is looking to export is known as “green” hydrogen. This refers to hydrogen produced from renewable energy and considered carbon-neutral. It can be contrasted against “brown” hydrogen (produced from coal) and “blue” hydrogen (produced from gas). While green hydrogen may be best for the environment, it is also the most expensive to produce. Promisingly, a scientific project in March this year saw Queensland – for the first time – successfully export green hydrogen to Japan, hopefully paving the way for commercial exports in the future.
This project represents a string of recent, positive developments between Queensland and Japan in the area of hydrogen. Only last week, Queensland’s Minister for State Development, Manufacturing, Infrastructure and Planning, Cameron Dick, was in Tokyo to attend the World Hydrogen Technologies Convention where he laid out why Queensland should be the hydrogen exporter of choice. The meeting resulted in Queensland re-signing a Memorandum of Understanding on Comprehensive Strategic Partnership with Japan’s largest resources investment body, JOGMEC, which aims to ‘jointly support renewable hydrogen opportunities’.[iii] Mr. Dick also signed a Statement of Intent with Tokyo University to undertake research in renewable hydrogen laying down a foundation for future joint projects.
Why the interest in Japan?
Japan’s reputation as technologically advanced has obscured the immense problems the country faces in the area of energy security. As a country with few natural resources, it relies heavily on imports to ensure it has adequate energy supply. Recent figures state that Japan imports around 94 per cent of its energy needs.[iv] This dependence on overseas market was exacerbated following the Fukushima Daiichi nuclear accident in 2011 and the loss of public confidence in domestic nuclear energy. An opinion poll by the Asahi Shimbun in February 2018 found 61 percent of people oppose restarting idle nuclear reactors.[v] This public opposition has complicated government efforts to improve energy self-sufficiency in Japan, which is the second lowest of all OECD countries.[vi] The government still uses nuclear energy and has shown an ability to maintain popular support while doing so, however is looking for alternatives to improve domestic supply. One option, investing in new coal-fired powered units, has proven a risky prospect with multiple projects being discontinued before they begun.[vii] Another energy option is hydrogen.
In December 2017, Japan’s government published its Basic Hydrogen Strategy and laid out a vision for Japan to become a ‘hydrogen-based society’ by 2050.[viii] This was backed by a Strategic Energy Plan in July 2018, which re-emphasised the goal of creating a hydrogen society.[ix] These documents noted hydrogen’s capacity for long-term storage of energy, which can improve self-sufficiency and therefore reduce Japan’s structural vulnerability to changes in the international energy market. It is also a clean alternative that can accelerate Japan’s transition to a low-carbon future in line with its commitments under the Paris Agreement. The Basic Hydrogen Strategy identifies the 2020 Tokyo Olympic Games as a ‘good opportunity’ for Japan to demonstrate its vision for a hydrogen-based society and ‘further accelerate innovation for its world-leading hydrogen and fuel cell technologies’.[x]
Lighting a torch for hydrogen
The Japan Times reports that the upcoming Olympic Games will be 100 per cent powered by renewable energy.[xi] This will include not only the stadiums and supporting facilities but also the international broadcasting centre and major press area. Significantly, the Olympic and Paralympic villages will run off hydrogen fuel, hydrogen fuel cell buses will be deployed for public transportation and the Olympic torch and cauldrons will be ignited using hydrogen energy.[xii] If this does occur, it will not be the first time Japan has used the Olympics to achieve a technological milestone. The 1964 Tokyo Olympic Games introduced the world to the bullet train; Japan has remained a pioneer in innovative transport ever since. It is very possible then that Japan’s investment in a renewable-powered Olympics will lay the foundation for a green economy and may even ‘kick off a global race for clean energy’.[xiii] Given these possibilities, it should come as no surprise that Japan has chosen green hydrogen to be the lead topic at its G20 Energy Meeting this week and has invited the International Energy Agency to present a new report arguing for increased investment in hydrogen technology.[xiv]
What does this all mean for Queensland?
Given the excitement that lays ahead, it might be deflating to conclude that Queensland’s role at the Tokyo Olympics is likely to be simply that of an observer. This is because large-scale exports of green hydrogen remain not commercially feasible and will be this way for a while to come yet.[xv] The better news is that these costs are coming down and fast, largely thanks to worldwide government policies to decarbonise and invest in cleaner alternatives. Thus, if an event as momentous as the Olympics can successfully showcase the potential of hydrogen energy, what better way to trigger investment?
Queensland’s continued development of its hydrogen strategy also gives it leverage back home as a ‘state leader’ on hydrogen. It can capitalise on the momentum created through the Federal Government’s commitment to underwrite hydrogen generation as well as Australia’s National Hydrogen Strategy to be released later this year. This document will lay out how Australia can become a ‘major global player’ in hydrogen by 2030.[xvi] The Chief Scientist preparing this strategy, Alan Finkel, has endorsed accelerating investment in hydrogen technology due to ‘Japan’s commitment to be a large-scale enduring customer’.[xvii] It appears then that Queensland is already one step ahead.
Ultimately, the prospect of a hydrogen society might be less fanciful than people think. It is worth remembering that high-speed travel was viewed as equally futuristic until Japan took the plunge with its first bullet train. If hydrogen really is the future, now is a good time to start planning for it.
[i] Queensland Government, Queensland Hydrogen Industry Strategy, May 2019, http://www.dsdmip.qld.gov.au/resources/strategy/queensland-hydrogen-strategy.pdf.
[ii] Ibid, page 1.
[iii] Queensland Government, Minister outlines Queensland’s hydrogen plan to Japanese industry leaders, Media Release, 4 June 2019.
[iv] Queensland Hydrogen Industry Strategy, page 11.
[v] Asahi Shimbun, Koizumi says Japan must say ‘no’ to nuclear energy, 17 January 2019, http://www.asahi.com/ajw/articles/AJ201901170010.html.
[vi] Government of Japan, Basic Hydrogen Strategy, December 2017, https://www.meti.go.jp/english/press/2017/pdf/1226_003b.pdf, page 8.
[vii] Yuka Obayashi, Japanese utilities turn away from coal plans amid green energy boom, 29 April 2019, https://www.reuters.com/article/japan-coal/japanese-utilities-turn-away-from-coal-plans-amid-green-energy-boom-idUSL3N2280MH.
[viii] Basic Hydrogen Strategy, page 5.
[ix] Government of Japan, Strategic Energy Plan, July 2018, https://www.meti.go.jp/english/press/2018/pdf/0703_002c.pdf, page 29.
[x] Basic Hydrogen Strategy, page 5.
[xi] Japan Times, 2020 Tokyo Games to be fully powered by renewable energy, organisers say, June 2018, https://www.japantimes.co.jp/news/2018/06/22/national/2020-tokyo-games-fully-powered-renewable-energy-organizers-say/#.XPn-iRYzaUn.
[xii] Basic Hydrogen Strategy, page 5; FuelCellsWorks, Tokyo Olympics Games to Use Hydrogen Fuel to Light Cauldrons, Torch During Relay, January 2019, https://fuelcellsworks.com/news/tokyo-olympic-games-to-use-hydrogen-fuel-to-light-cauldronstorch-during-rel/; NPR, Japan is betting big on the future of hydrogen cars, March 2019, https://www.npr.org/2019/03/18/700877189/japan-is-betting-big-on-the-future-of-hydrogen-cars.
[xiii] Niki Alsford, How Japan’s renewables-powered Olympics could kick off a global race for clean energy, May 2019, https://theconversation.com/how-japans-renewables-powered-olympics-could-kick-off-a-global-race-for-clean-energy-115997.
[xiv] Faith Birol, How hydrogen can offer a clean energy future, 4 June 2019, https://www.ft.com/content/8d0b818c-81f6-11e9-a7f0-77d3101896ec.
[xv] Justine Lovell, Green hydrogen: is it still in the pipeline?, August 2018, https://www.energycouncil.com.au/analysis/green-hydrogen-is-it-still-in-the-pipeline/.
[xvi] COAG Energy Council, National Hydrogen Strategy – Discussion Paper, March 2019, https://consult.industry.gov.au/national-hydrogen-strategy-taskforce/national-hydrogen-strategy-request-for-input/supporting_documents/nationalhydrogenstrategyrequestforinputdiscussionpaper.pdf.
[xvii] Hydrogen Strategy Group, Hydrogen for Australia’s Future, August 2018.
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