Labor’s having a love-in over hydrogen power even though it’s years away
A Labor MP and a Western Australia minister walk into a bar… they emerge hours later drunk on the potential of hydrogen.
On Tuesday, shadow federal assistant minister for climate change, energy and infrastructure Pat Conroy and WA minister Alannah MacTiernan offered a rosy future of hydrogen as a “decarbonising” material at the Australian Hydrogen Energy Summit.
Where they diverge is the fact that the WA Labor government has a policy to develop a lithium ion battery sector as well as a hydrogen industry.
Yet federal Labor is yet to catch up on EVs and lithium ion batteries, despite it being a more developed technology and a Senate committee strongly recommending action in January.
The federal liberals have promised a public consultation process on hydrogen and launched a battery manufacturing strategy in December.
Mr Conroy was pitching Labor’s hydrogen policy — a $3m plan for an “innovation hub” in Queensland, regulatory change, and directives to ARENA and the CEFC to invest — as a way to accelerate economic decarbonisation.
Ms MacTiernan told the assembled men and small handful of women about WA’s efforts so far to develop a hydrogen industry, and to explain why this sector qualified for state and federal government support.
“[Pat] we love your money that you announced recently… even though it was announced in Queensland,” she said.
“There have been critical industries in Australia where there has been a real role for government as a facilitator, and in some cases as an investor, to get those projects up and running. The North West Shelf [gas and LNG development] is obviously one of those.”
Hydrogen as a fuel source has captivated parts of Australian politics and industry, even though it is a technology still in its infancy.
CSIRO outlined a hydrogen roadmap for a future Australian industry last year and says by 2040 it could be worth anywhere between $2.6bn and $13.5bn.
To put that in context, the Department of Industry, Innovation and Science’s latest Resources and Energy said in December Australia’s coal exports in 2018-19 were expected to come in at $67bn and LNG exports at $50bn.
Hydrogen can be used in fuel cells for long distance transport, exported as ammonia to be converted back into hydrogen in Japan and South Korea for an electricity source, or as a replacement for natural gas as either an industry feedstock, such as to make fertiliser, or a source of heat.
It’s made either by electrolysis from water, a highly energy intensive process that politicians and industry are eyeing renewables for, or from natural gas or coal.
It’s moved and stored via pipeline as a pressurised gas, or as ammonia.
It’s very attractive to Japan and South Korea as a low-emissions heating and electricity source as they are keen to decarbonise but don’t have the land or the climate to establish their own renewable energy sectors.
But around the rest of the world it’s still a blue-sky technology and commercial ventures are years away.
Mr Conroy and Ms MacTiernan couched their enthusiasm for hydrogen as a decarbonisation tool and as new industry Australia can jump on, but yesterday neither mentioned how long a new industry may take to develop.
“We’re seeing nations around the word struggle to decarbonise their economies,” Mr Conroy said.
“It offers Australia a massive opportunity akin to the one offered by the LNG industry last century… however we are in a race.”
Ms MacTiernan was the only one to raise the issue of royalty replacement.
As the world turns from carbon intensive industries, Australian governments will lose royalties on substances such as coal or oil.
In response to questioning by the WA minister, Mr Conroy admitted Labor hasn’t looked at how to replace that income in state and federal budgets yet.
He said royalty loss would depend on how hydrogen is made. If from gas or coal there would still be scope to earn on those industries, and he speculated that if it’s made from water, states wouldn’t be giving that substance away to companies for free.
Ms MacTiernan intimated that they’re looking at hydrogen as replacement source of state income for the future.
She says WA’s new Renewable Hydrogen Council settled on four strategic areas of focus: exports, remote applications, blending into the gas network, and transportation.
And she cited the state’s expertise in shipping and proximity to markets as a key selling point for exports, and its numerous remote communities and mines in the north and east where hydrogen could be used instead of fuels such as diesel.
“When we look at the availability of land, the availability of solar and wind, we look at our long term traditional partnerships that we have, including markets that we are currently selling LNG into, we see our proximity and our willingness as a government, and we see ourselves as extremely well placed to do it,” Ms MacTiernan said.