Getting hydrogen on your own supply

If you Google “technology roadmap”, in the ‘People also ask’ section there’s a question, “What is the purpose of a technology roadmap?”

That seems a good place to start.

It’s described as a “flexible planning technique to support strategic and long-range planning, by matching short-term and long-term goals with specific technology solutions”.

And that’s what the federal government seems to have in mind.

In a self-described punt, the government has bet on hydrogen, batteries, green steel, carbon capture and storage, and soil carbon as the top priority technologies to develop over the next decade in order to drastically reduce Australia’s emissions.

The Federal Energy Minister Angus Taylor filled in some of the gaps from the morning’s media drop in a speech to the National Press Club (NPC) in Canberra on Tuesday.

The plan went down better than the government’s announcement the week before when it told the energy industry to commit to 1000MW of new generation in NSW by the end of April next year or it would build a gas fired plant to do so.

The Tech Roadmap is ambitious in its scope.

Mr Taylor says Australia will avoid 250 million tonnes of emissions by developing the following technologies if it reaches the stretch goals it has outlined by 2040.

  • Hydrogen production under $2 per kilogram, ‘H2 under 2’.
  • Long duration energy storage dispatched at under $100 per megawatt hour, which would enable firmed wind and solar to be delivered at prices around or below today's average wholesale price.
  • CO2 compression, transport and storage at under $20 per tonne.
  • Low emissions steel production at under $900 per tonne, and aluminium under $2700 per tonne.
  • Soil carbon measurement for less than $3 per hectare, per year.

The minister told the NPC “mature technologies” like coal, wind and solar will still play an important role in Australia's energy future.

The government will invest in them “where there's a clear market failure, like a shortage of dispatchable capacity”.

The point was made clear to private investors, the government is watching and ready to intervene if and when it thinks it is necessary.

A hydrogen future

The attention in the new tech proposed has been falling on clean hydrogen generated by electrolysis. If that process is powered by renewables, then it has zero emissions, and this is where the Tech Roadmap seeks to make inroads into lowering Australia’s emissions.

The stretch goal is H2 under $2/kg. At $2/kg clean hydrogen it would be competitive in applications such as producing ammonia as a transport fuel and for firming electricity.

If all goes to plan and Australia successfully develops a booming hydrogen production industry there may be money in it, quite a lot according to some estimates.

An Australian Renewable Energy Agency (ARENA) report claims global demand for hydrogen exported from Australia could exceed three million tonnes a year by 2040, and that could be worth up to $10 billion a year to the economy.

The roadmap views clean hydrogen from off-grid gas, with Carbon Capture and Storage (CCS), and coal gasification with CCS, as potentially the lowest cost clean production methods in the short-term, but notes renewable production methods will come down in cost as clean hydrogen demand grows.

Establishing domestic demand for hydrogen is seen as a path to scaling up the industry and prepare Australia to be a global exporter.

“Using clean hydrogen in heavy vehicles, as industrial feedstocks, blended into gas distribution networks, for export as clean ammonia, and for power generation at remote sites, offer early hydrogen growth opportunities. For example, cost-effectively deploying hydrogen in remote mine sites could avoid expensive supply of diesel and reduce associated emissions.”

Energy storage

The Roadmap sees grid-scale storage as critical to the future grid to firm up wind and solar and provide system security services. The aim is electricity from storage for firming at under $100/MWh.  The report states it has the potential to reduce Australia’s cumulative carbon emissions by over 700Mt CO2 over the next 20 years.

The stretch goal based on an average wholesale electricity price under $70/MWh and competitive with mid-merit gas generation.

Unremarkably it notes the lowest cost storage option will likely be pumped hydro, and points to batteries and solar thermal energy storage becoming increasingly cost competitive, and suitable for locations where pumped hydro is unavailable or where other characteristics are valuable, such as frequency control services.

Carbon capture and storage

The focus here is not on the potential for use with power station emissions but rather on large-scale deployment to underpin new low emissions industries (including hydrogen) and to provide a potential decarbonisation for hard-to-abate industries, such as natural gas processing and cement. 

The Roadmap notes it is better suited, and has greater potential, for processes such as oil and gas extraction, coal gasification or methane reforming for hydrogen production.

The stretch goal of under $20/tonne for CO2 compression, hub transport (within 100KM) and storage would make it competitive in the longer-term with other forms of abatement. The stretch goal does not cover the capture processes, which varies between applications and depends on factors such as CO2 concentration.

It sees the Government’s role as via investment in R&D and demonstration and through targeted incentives for technology adoption. The Roadmap notes the Federal Government has started work on a new method to incentivise adoption through the Emissions Reduction Fund.

“Recommendations of the King Review, such as below-baseline crediting under the Safeguard Mechanism and a technology neutral remit for ARENA and the Clean Energy Finance Corporation (CEFC), will also encourage technology development and adoption in industry”.

ARENA and the CEFC

The government’s statement on technology follows its announced intention to change the remit of the CEFC and ARENA and lift funding by $1.9 billion so they can invest in technologies including carbon capture and storage, hydrogen, soil carbon, and green steel.

It is an extension of a trend that had already commenced with ARENA already making grants to support hydrogen, biofuels and electric vehicle developments, for example. 

Meanwhile the CEFC saw its mandate grow with the announcement of a grid reliability fund to support Australian Government investment in new energy generation, storage and transmission infrastructure, including eligible projects shortlisted under the Underwriting New Generation Investments (UNGI) program.