Green Energy: ARENA boss charts path to reduce green hydrogen costs

• ARENA boss sees commercial green hydrogen industry emerging by the end of the decade
• Blackstone adds green hydrogen to mix at Ta Khoa “green nickel” project

The head of the Australian Renewable Energy Agency is confident the cost of large-scale delivering green hydrogen projects in Australia will come down to competitive levels.

ARENA chief Darren Miller told delegates at the Energy and Mines Australia Virtual Summit how the renewable energy funding body sees the cost of green hydrogen potentially falling from $6-9/kg to $2/kg over time.

This would improve the economic case for large-scale electrolyser-produced green hydrogen in Australia.

“Where are we today? We think we’re around the $6-9/kg range, using some very rough rules of thumb of $2-3 million per mega watt for electrolysis, an electricity price of around $45-55/mwh translated from an average capex of about $1.5m per mega watt,” he said.

“At these kind of levels we can quite easily prove that we can produce hydrogen in the range of $6-9/kg, which is around 3-4, perhaps 5 times out of the money from that $2/kg target we’re looking for.

“Two key things have to happen to get us to that target. Firstly, we need to decrease the cost of that electrolyser from that $2-3m/mw down to $0.5m/mw.

“Secondly, we need to halve the cost of renewable wind and solar generation from today’s level.”

Miller, whose agency is funding a number of hydrogen related initiatives including Horizon Power’s Denham demonstration project in WA, pointed out that Australia’s abundant solar and wind resources gave it a leg up.

“Suffice to say I think we can see an opportunity for hydrogen to follow the same cost trajectory solar, wind and lithium-ion batteries have followed over the last decade,” he said.

“We’re pretty confident that as the industry scales up and as the world is focused on producing renewable hydrogen through electrolysis that these cost reductions are not only possible but actually desirable, achievable.”

Sliding costs for renewables a roadmap

While Government support is critical to get the sector up and running, industry supporters frequently point to sliding costs for other renewable technologies as a roadmap to a commercially viable hydrogen economy in the future.

Miller believes the industry could be mature enough to reduce its reliance on Government funding by the end of the decade.

But he noted there was a long way to go before multi-giga watt developments were on the way.

“As this scales up ARENA’s grant funding will be a lower share of these projects and these projects will near commercialisation,” he said.

“Hopefully by 2025 or 2030, in that range of time, we would see very large-scale projects coming to fruition with very limited government funding.”

Until then, he said ARENA and the Clean Energy Finance Corporation will play a big role in getting pilot-scale projects up and running.

Blackstone latest miner to add ‘green hydrogen’ to processing mix

Everybody seems to be looking for a path into green hydrogen these days, with Blackstone Minerals (ASX: BSX) the latest to brandish its credentials.

It has launched a “green hydrogen study” at its Ta Khoa nickel sulphide mine in Vietnam. Join the queue.

The “green nickel” developer is currently progressing a pre-feasibility study after a scoping study last year which saw the mine producing 12,700tpa of nickel over an 8.5 year mine life in the form of value-added downstream nickel products for the battery industry.

Included in its extensive processing method is the use of oxygen, which would be produced via a conventional cryogenic oxygen plant with nitrogen by-products.

Instead Blackstone wants to see if it can deliver the same product through electrolysis, also producing hydrogen for use in hydrogen fuel cells.

According to the company this could enable it to eventually use its own hydrogen as fuel for its concentrate haulage fleet, and mining fleet as that technology becomes available. If the numbers stack up, Blackstone also believes it may be able to sell additional hydrogen to third parties to offset project costs.

Blackstone managing director Scott Williamson said: “The decision to commence a Green Hydrogen Study reflects Blackstone’s commitment to minimising its carbon footprint and producing downstream nickel products with the highest ESG credentials.”