As hydrogen ramps up around the world, where does Australia stand?

Hydrogen is still in its infancy in Australia but the pace is clearly picking up with state governments, federal government agencies and companies laying out their plans.

And it’s not alone.

Supermajor Shell is continuing its pivot away from oil and gas with the company noting in February that it will increase its spending on low carbon energy – including hydrogen – to about 25 per cent of its overall capital expenditure by 2025.

It is already developing a hydrogen hub in Hamburg, Germany, and it is one of several firms developing a hub in Rotterdam in the Netherlands.

Even the financial sector is getting into the industry with Legal & General Investment Management launching the first pure hydrogen exchanged traded fund in Europe to “offer investors early access to this fast evolving industry”.

Further highlighting this growth, Wood Mackenzie has detailed in its report 2050: The Hydrogen Possibility that the project pipeline has grown nine-fold since October 2019 to a 26 gigawatt major player.

Production costs for green hydrogen, which uses renewable energy to power electrolysers to break down water into oxygen and hydrogen, is also poised to fall with world’s largest electrolyser manufacturer Nel looking to slash the costs of its products by up to 75 per cent.

Australia’s future fuel

Speaking to Stockhead, Real Energy (ASX:RLE) chief executive officer Scott Brown noted that while the hydrogen sector was still at a very early stage, its potential in Australia was immense.

“These are only small steps taken right at the moment, but people can see how hydrogen potentially is going to replace a lot of diesel usage, particularly in transport.”

He believes that trucks and trains represent the “lowest hanging fruit” for hydrogen fuel cells, which use hydrogen to generate electricity that in turn powers the electric engine, to make an impact.

Batteries large enough to provide sufficient range for big vehicles would be heavy, take up space and be expensive. To top it off, the long recharge times for batteries is also a negative for the transport sector.

In contrast, fuel cells can be refuelled just like regular internal combustion engines while hydrogen has a high energy and can be stored as a compressed gas.

Along with the high efficiency of fuel cells, which Brown said could be between 200 to 300 per cent better than more traditional combustion engines, this makes hydrogen fuel cells ideal for replacing diesel.

The long distances for travel within Australia could also allow consumer hydrogen vehicles to catch up with their battery electric counterparts.

“The real problem with an electric car, even with fast charging, is that you do not want to stop more than five minutes on a long trip as it just increases your travel time,” Brown noted.

“That’s a real negative for long distance travel and I suspect that to get really big adoption in Australia, you could have a car with both a hydrogen fuel cell and batteries.

“The electric engine wouldn’t care how you generate the electricity, whether it is from battery or fuel cell. But you would be able to fill up with hydrogen like a normal petrol or diesel vehicle and continue on the trip without too much of a break.”

Brown added that Australian governments were starting to realise that there are clear benefits to developing a hydrogen industry in a country with a lot of natural advantages.

“In places like Japan and South Korea, they’ve got a very dense population, but they don’t have a lot of spare land you can put solar plants in,” he explained.

“We have got a lot of sunshine and resources that could be utilised here.”

He also pointed out that while replacing fossil fuels with hydrogen is still a long time off, it was certainly possible.

“In the east coast, it is a lot cheaper to buy electricity off the grid in the middle of the day when there’s a lot of solar used, it then peaks to two or three times the daytime price between 5-7pm,” Brown said.

“Some people were talking about batteries, but another way you could do is you could generate hydrogen during the day when it is cheap then run fuel cells to generate electricity and pump it back into the grid during peak periods.

“The technology is there, it is just commercial will and that sort of thinking to make it work.”

Recent hydrogen developments

New developments are occurring rapidly in Australia.

Swinburne University of Technology recently received a $10 million funding boost from the Victorian Government’s Higher Education State Investment Fund to build the Victorian Hydrogen Hub to bring researchers, industry partners and businesses together to test, trial and demonstrate new and emerging hydrogen technologies.

The hub will include a demonstration hydrogen refuelling station with hydrogen production and storage facilities.

CSIRO is partnering with the university and will receive $1m in funding to develop a refuelling station to fuel and test vehicles, one of the biggest barriers towards the gas becoming a fuel source for cars and trucks.

Meanwhile, the Australian Gas Infrastructure Group (AGIG) has submitted two renewable hydrogen bids to the Australian Renewable Energy Agency (ARENA).

In Victoria, it is partnering with global low-carbon energy company ENGIE to develop the 10 megawatt (MW) Hydrogen Park Murray Valley renewable hydrogen project that will be co-located with the West Wodonga Wastewater Treatment Plant.

This will produce 4 tonnes of renewable hydrogen that will be blended with natural gas and supplied to about 40,000 existing residential, commercial and industrial connections on the existing Albury-Wodonga gas distribution network.

AGIG is also with international integrated energy group ATCO to develop the Clean Energy Innovation Park project in Waradarge, Western Australia.

This will be of similar size to the Victorian project and will produce renewable hydrogen for use in gas networks, industry and technology.

The Clean Energy Council also called on the Western Australian state government to commit at least $100m over the next five to 10 years to support its ambition of becoming a global leader in producing renewable hydrogen and its derivatives.

It noted that this investment would support the development of a large-scale hydrogen export industry.

Real Energy’s wholly-owned subsidiary Pure Hydrogen Corporation recently signed a term sheet with private Australian hydrogen project development company Port Anthony Renewables to build and develop a large-scale hydrogen production facility at Port Anthony, Victoria.

This will target initial production of 20 tonnes per day and will be one of four hydrogen hubs that it is developing on Australia’s east coast.

But the Port Anthony hub may not be the first that the company develops.

Brown told Stockhead that a Queensland hub could be up and running as early as next year.

“It will be dependent on getting all the right approvals along with getting customers comfortable that we can supply them,” he said.

Last week, Global Energy Ventures (ASX:GEV) signed a memorandum of understanding with Ballard Power Systems to design and develop a hydrogen fuel cell system for the company’s proposed compressed hydrogen ship.

This system will used hydrogen from the ship’s storage tanks for power, providing a zero-emission marine transport supply chain.