Australia’s latent potential as a major producer of exportable renewable energy has been delivered a boost with plans by Labor to invest $1.14 billion in a National Hydrogen Plan, counting on a change in government in the May federal election.

Opposition leader Bill Shorten says the aim is to nurture a new export and energy industry through regulatory changes and investments from the CEFC and ARENA.

Labor’s plan will target research and development, commercialisation, deployment, infrastructure and regulatory reform.

The plan at a glance

As part of the plan, ARENA will be required to direct up to $90 million of its investment budget to support the development and pre-commercial deployment of hydrogen technologies, as well as making hydrogen production, storage and transport a funding priority of the Australian Research Council.

Under the plan $1 billion of CEFC funding will be allocated to support clean hydrogen from Labor’s commitment to double CEFC’s capital by $10 billion, allocate $40 million from the CEFC Clean Energy Innovation Fund to demonstration and development hydrogen technologies, and require ARENA to allocate $10 million of its funding to establish hydrogen refuelling infrastructure across Australia.

Regulatory changes will be designed to support hydrogen use, such as: a Guarantee of Origin scheme to certify carbon neutral hydrogen; having the AEMC examine rule changes to allow for compensation for grid firming by electrolysers; pursuing international export agreements on hydrogen; and work with states to harmonise regulations for hydrogen vehicles.

The plan will also be visible in Australia’s LNG capital, with $3 million set aside to fund a National Hydrogen Innovation Hub in Gladstone, Queensland, to kick-start early commercialisation of hydrogen technologies and provide a hub for ARENA, researchers and other agencies.

It’s all around us

Hydrogen doesn’t usually occur in elemental form on Earth, but there is plenty of it in water and hydrocarbons. Pure hydrogen is a colourless, odourless gas similar to natural gas but without carbon. It can be reticulated into a gas network in the same way natural gas is distributed, either as a blend of hydrogen and methane or by converting networks to pure hydrogen.

“Hydrogen is a path to having a zero-carbon gas network,” says Australian Gas Infrastructure Group (AGIG) CEO Ben Wilson. “You can do all the things you do with natural gas.”

Hydrogen may be colourless and odourless but in the industry parlance it comes in colours used to describe which method was used to free it into its elemental form. Hydrogen produced with electricity is “green hydrogen” (there are blue, black and brown varieties). Green hydrogen is produced using an electrolyser, where electricity is passed through water so that hydrogen is separated from oxygen. During the electrolysing process oxygen is released into the atmosphere, but when the hydrogen is burned for energy it combines once again with oxygen to form water vapour – completing a rather elegant closed cycle.

“Of course, if you use renewable electricity to drive the electrolyser, you’ve got completely zero-carbon hydrogen,” Wilson says.

Electrolyser plants can be switched on and off to make use of surplus energy produced by solar or wind generation whenever it suits – solar in the middle of the day or wind in the middle of the night, for example.

The Australian Gas Infrastructure Group is building Australia’s largest electrolyser, Hydrogen Park SA, in partnership with the South Australian government. “We’ll buy power off the grid at times of the day where the grid is essentially all-renewable,” Wilson says. “We’ll produce hydrogen and put it into the gas network, so effectively … you’re using the gas network as a giant battery.”

Hydrogen produced via the electrolysing process contains about 70% of the energy used to produce it.

Use it at home

This convenient matching of flexible hydrogen production with sources of electricity that are as variable as the weather leads to a politically palatable package, where the finished product can be described as an exportable commodity and another form of energy storage.

You’re taking solar in the middle of the day or wind in the middle of the night to make hydrogen to consume at peak time – early evening or morning.

Hydrogen can make up about 10% of gas in the network without there being any impact on appliances, Wilson says, and in the UK the goal is a 20% blend. “That’s a lot of hydrogen,” he says. “Once you get above that you have to adjust burners.”

There’ll be a point when networks will need to be sectionalised and converted to 100% hydrogen, he says.

But where will the water come from? After all, this is a country prone to drought where the metropolitan water supply networks have occasionally suffered scarily low levels for long periods. Wilson estimates it would take about 3% of the water in South Australia’s network to replace all the natural gas consumption in the state with 100% hydrogen produced using electrolysing powered by renewables.

“It’s measurable, but it’s not going to cause a massive water stress,” he says.

Around the world

Labor’s plan importantly targets the export market, where Australia is already chasing the goal of being the world’s biggest seller by volume of liquefied natural gas. LNG is cleaner than coal, but it hardly qualifies as zero-carbon.

Hydrogen can be condensed to liquid form by freezing it to about -253 degrees Celsius, whereas methane (natural gas) boils at about -160 degrees (so existing LNG tankers won’t be up to the task of shipping liquid hydrogen).

Japan imports most of its energy and has set a long-term target for 20% of total energy imports to be hydrogen. It’s even announced the 2020 Tokyo Olympics to be the “Hydrogen Olympics”. South Korea is also committed to transitioning to clean hydrogen.

In the global hydrogen market, Australia is looking good thanks to low-cost renewable energy and close proximity to Asian markets, which are far costlier to service for other hydrogen producing nations such as Qatar and Norway.

The global market for hydrogen is expected to be worth $215 billion by 2022, according to the International Energy Agency.

ACIL Allen Consulting projects that hydrogen exports could contribute $3.6 billion a year to the economy and generate close to 6,000 jobs by 2030. This is projected to grow to $10 billion of exports a year by 2040, and 16,000 new jobs.

Clean Energy Council CEO Kane Thornton agrees Australia is well placed to take advantage of the growing global demand for clean hydrogen.

“We have a fantastic opportunity to build on the work done by CSIRO and the Australian Renewable Energy Agency recently, on creating hydrogen using renewable energy and converting it to a form where it can be exported. Asian countries such as Japan and South Korea have committed to making hydrogen a huge part of their energy future, giving us a fantastic opportunity to produce and export it to the Asia-Pacific region.”

And on the road

As the world’s petrol-burners are replaced with electric vehicles hydrogen also stands to show its strength in fuel-cell electric vehicles, where tanks can be quickly filled with hydrogen that is used to produce electricity in a fuel cell. The fuel type is expected to best suit heavy haulage, where trucks and trains will gain an efficiency boost from shrugging off the burden of weighty diesel in favour of lightweight hydrogen.

“Hydrogen technology is being embraced around the world – in northern Europe, for example, for domestic and commercial use in gas networks and to fuel passenger and freight trains,” says Energy Networks Australia CEO Andrew Dillon.

“While the potential for export is enormous, one of the most exciting properties of hydrogen is its potential to serve as a large-scale battery, utilising existing gas networks.”

Energy Networks Australia supported the CSIRO on the 2018 National Hydrogen Roadmap and has worked with Chief Scientist Alan Finkel, who is developing a national strategy with the support of the Commonwealth and state governments.

“Our gas network members are undertaking significant hydrogen related projects throughout Australia, trialling hydrogen in gas networks and for use in domestic appliances,” Dillon says.