Australia can become a major renewable energy exporter while helping energy deficient countries in Asia to reduce their use of fossil fuels, writes Amar Rathore.
Australia has a natural advantage to become a major renewable energy exporter to the Asia-Pacific region. Generating emission-free electricity from gigawatt-size solar farms located in Northern Australia offers a huge export opportunity. Renewable energy can be exported by producing hydrogen from renewable electricity and shipping liquified hydrogen to international customers and using sub-sea electrical cables to supply renewable electricity to our neighbours in Asia.
The main downside of hydrogen is inefficiency, as energy used in hydrogen production and liquification only leaves a small amount of final energy.
High voltage direct current (HVDC) interconnectors can carry large amounts of electricity over longer distances with low electricity losses. Technological advances in HVDC transmission and falling renewable energy costs make an Australia-Asia electricity grid interconnection a real possibility in the coming decades.
The vast deserts of the Northern Territory and Western Australia have the world’s best solar radiance. For each megawatt of installed solar capacity in these regions an extra 15% energy can be generated as compared with southern states.
According to a recent report by The Australia Institute, we are the world’s third-largest exporter of CO2 in fossil fuels. Coal exports are Australia’s second-largest source of revenue. However, the future of coal exports looks bleak, with some of Australia’s biggest customers – Japan, China and India – shifting away from importing coal for electricity generation. The commitment to the Paris Agreement and other policy developments internationally point to a falling future demand for coal.
There is far too much optimism in Australia about the long-term future of coal exports, but we must take urgent steps to replace Australia’s existing fossil fuel export industries with exports of renewable hydrogen and electricity exports to Asia via sub-sea HVDC cables. Australia needs to grab the renewable energy export opportunity now. This is a once-in-a-lifetime opportunity for Australia, with the best renewable energy resource in the developed world, to expand its energy generation for export and help other nations to reduce their emissions.
Connecting to Asian grids
The idea of a regional and global electricity grid has been around for a while but not much progress has been made due to a lack of political imperative and high start-up costs.
Japan has a plan for grid interconnection with neighbouring countries and Softbank CEO Masayoshi Son has announced his vision of creating an Asia Super Grid. This super grid could see the electricity networks of Japan, South Korea, China, India and Russia linked via Mongolia, allowing Asian countries to tap into Mongolia’s vast solar and wind resources. However, this plan would require Japan to have friendly relations with the countries involved, which might be politically implausible. There is an opportunity for Australia to engage with Japan about a North Australian grid connecting with the Asia Super Grid or directly to the Japanese grid.
Connecting Northern Australia to the Asia Super Grid or directly to Japan will create significant export and job opportunities. The longest sub-sea HVDC cable currently under construction is the 1,500 km long EuroAsia Interconnector, which will connect the grids of Israel, Cyprus and Greece.
Exporting clean renewable electricity
There have been several recent announcements about producing renewable hydrogen in West Australia’s Pilbara region for export to Japan and South Korea. Reports about a 10GW solar project in the Northern Territory to export electricity to Singapore via sub-sea HVDC cable shows there is an enormous potential for Australia to supply clean renewable electricity to our neighbours.
Grid integration between Northern Australia and countries in Asia with a sub-sea HVDC interconnector will open up a great export opportunity for Australia. A sub-sea HVDC cable at 800 kilovolts will have around 3% loss per 1,000km, so a 6,000km cable will have less than 20% electrical losses, which clearly shows that transport of electricity using HVDC is much more efficient as compared to hydrogen.
Grid connections over larger geographic areas have many other advantages. Interconnected countries can benefit from different time zones and export power to their neighbours while their own demand is low at night and generation from wind farms is high. Similarly, connecting across northern and southern hemispheres can help to balance the seasonal differences in demand.
Exporting renewable hydrogen
Japan and South Korea meet their energy requirements by importing fossil fuels. Both Japan and South Korea are looking to import renewable hydrogen. The renewable electricity generated by solar farms in Northern Australia can be used to produce renewable hydrogen to meet the growing demand from Japan and South Korea. According to a 2018 report from Chief Scientist Dr Alan Finkel, Australia’s hydrogen annual exports could reach $1.7 billion by 2030.
Hydrogen does not exist on Earth as a gas; it is created from other compounds. Two of the most common methods used to produce hydrogen are electrolysis using renewable energy, which has no emissions but is inefficient, expensive and requires significant amounts of clean water, and steam reforming, where hydrogen is separated from carbon atoms in methane. As methane is sourced from fossil fuels, the process results in greenhouse gas emissions.
Renewable hydrogen can be used for heating applications, hydrogen fuel-cell powered vehicles and providing energy storage, fast ramping load/generation and frequency control in a 100% renewable grid.
A shift from high-emission petrol and diesel vehicles to battery electric vehicles charged with renewable electricity is necessary. A move to renewable hydrogen powered fuel cell vehicles looks attractive, but hydrogen fuel cell vehicles are much less efficient as compared to battery electric vehicles.
Whilst exporting hydrogen to Japan and South Korea will be useful for Australia’s economy, domestic use of hydrogen makes little sense as it will result in inefficient use of renewable electricity. Hydrogen produced from 100kWh renewable electricity after liquification and transportation and used in a fuel cell to generate electricity will only create 20-25kWh of electricity. Exporting renewable electricity using HVDC sub-sea interconnectors with much lower loss is a much better option.
Over the horizon
Australia has the world’s best solar and wind resource. Exporting renewable electricity to neighbouring countries using HVDC power lines laid under the oceans is a real possibility. Exporting renewable electricity using HVDC has clear advantages over hydrogen export.
There is an urgent need for Australia to move away from its reliance on exporting fossil fuels and look for new export streams including renewable energy. Our export market for fossil fuels will end, with the rapidly rising electricity demand in Asia but growing resistance to coal, and international pressures to meet the Paris Agreement.
Australia can become a major renewable energy exporting country while helping energy deficient countries in Asia to reduce their use of fossil fuels. Australia has all the ingredients to become a renewable energy superpower. Large arrays of PV panels spread across vast areas in the Northern Territory and Western Australia can generate tens and hundreds of terawatt hours of renewable electricity. Exporting electricity via sub-sea HVDC cables to Indonesia, Singapore, Japan and South Korea can be worth billions in export dollars.
Amar Rathore is a senior associate at the Market Advisory Group and a member of the EcoGeneration editorial board.