Abe visit may hasten ‘solar fuel’ exports from Pilbara

Following the signing of the Japan-Australia Free Trade Agreement on PM Abbott’s recent visit to Japan, Japanese PM Shinzo Abe will visit Western Australia and the Pilbara region this week.

The visit comes at a time when renewable energy, and hydrogen, are an increasing focus for Japan’s energy planners, and energy security is a major topic.

Abe’s visit will coincide with the 25th anniversary of the first shipment of LNG from the North West Shelf LNG project to Japan, and will reinforce strong, long-standing traditional energy and minerals trade ties in the face of growing resource competition and heightened strategic tensions with China.

But the visit is also interesting in the context of efforts to reduce Japan’s reliance on fossil fuels, and to reduce the carbon intensity of Japanese industry.

Hydrogen is often dismissed as ‘the fuel of tomorrow, and always will be’. But the hydrogen train is moving. A recent report talked of a new breakthrough in the use of hydrogen.  It has huge potential for Australia to exploit its solar resources to deliver the fuel.

In 2015, for instance, Japan will roll out 100 hydrogen fuel stations to support the launch by Toyota and Honda of hydrogen fuel vehicles in the Japanese market. Competitor Hyundai recently released its first production hydrogen vehicle into the California market.

Doubts about hydrogen are partly due to the current primary supply source – most hydrogen is split from natural gas (using a process called steam methane reforming), and there are also concepts for production of hydrogen from coal and other hydro-carbons.

The obvious question is, if the hydrogen is coming from gas or coal, how is there any cost or environmental benefit? You still need gas or coal, and you’ve added more processes.

But Japan’s Strategic Energy Plan, released in April, highlights (at page 71) the solution, and in doing so, the massive opportunity for Australian solar and other renewable energy in a carbon-constrained Japanese economy:

‘It is important …in the future, to produce hydrogen utilising renewable energy such as solar power, wind power, biomass, at home and abroad,” it wrote, adding it wanted to develop “large-amount storage or long distance transportation by advanced technology including hydrogen shipping vessel, organic hydride and converting toward chemical materials such as ammonia and liquefied hydrogen.”

Hydrogen has been produced from water, using electrolysis, for decades. Powering electrolysis of water by renewable energy effectively acts as bulk renewable energy storage.

Hydrogen is notoriously difficult to store and transport, but converted to ammonia, LNG or liquid hydrogen, it can be transported like any other fuel.

Japan’s Chiyoda Corporation has developed a method to use standard petri-chemical tankers for long-distance hydrogen shipment. As numerous studies in recent years have highlighted, the Pilbara region, where PM Abe’s visit is centred, has among the best solar resources in the world. Solar power in the Pilbara is already competitive with diesel in many locations.

Investigation of ‘solar fuels’, as they are known – storing solar energy in transportable form (gas or liquid) for use in electricity generation or transport – is an increasingly important part of solar research, because it has potential to unleash an entirely new, industrial scale of solar development.

Unshackled from domestic electricity supply, solar power could be developed at massive industrial scale to produce hydrogen, driving costs down even further and faster.

The processes involved, including conversion into transportable forms, benefit from a combination of solar electricity and solar thermal energy, presenting opportunities for large-scale solar PV and CSP (concentrated solar power).

It is known that Saudi Arabia is considering similar potential for is solar resources, as a hedge against reducing oil and gas reserves, and in Australia at least one group has plans for a feasibility study leading to a potential pilot demonstration plant.

The Australian project is mooted for the Pilbara, and would use solar fields to generate power, produce hydrogen through solar-powered electrolysis and then demonstrate conversion of the renewable hydrogen into large-scale, transportable form for shipment to Japan, where this “renewable fuel” could then be incorporated into Japan’s energy networks for use in electricity generation, transport and/or in fuel cells.

The Japanese Strategic Energy Plan highlights an exponentially larger opportunity; the prospect of storing the Pilbara’s virtually limitless solar resources, located right next door to Australia’s largest gas and ammonia export platforms, for export.

If the Australian Government is serious about its plans for the Northern Australia’s development as an energy export hub, here would seem to be the large-scale energy export industry of the future, with our good friend and energy partner Japan as the anchor customer for a renewable hydrogen market that, over time, could extend throughout Asia.

The Abe Government has expressed stronger support than its predecessors for continuing nuclear power – plans to follow Germany in shutting down nuclear were scotched following Abe’s election. But popular opposition to nuclear following the ongoing catastrophe of Fukushima means that even the Abe Government sees the limitations of nuclear.

Japan needs very large-scale, carbon-free energy supply that breaks reliance on fossil fuels. Australia intends to develop our north as an energy hub for Asia.For Japanese-Australian energy trade, what could be a better fit than solar hydrogen production in the Pilbara, for export on a major industrial scale?