Can renewable hydrogen become the ‘Netflix of the energy sector’?

The head of the Australian Renewable Energy Agency says renewable hydrogen should emerge as the ‘Netflix of the energy sector’, providing a ground-breaking technological step-change that would deliver an export market for renewables and cheaper electricity for Australian consumers.

“I think hydrogen is going to be the Netflix of energy,” ARENA CEO Darren Miller told the AFR energy summit on Thursday. “I have no reason for saying that other than I think that it is an incredibly flexible molecule, and it is exciting for Australia, having multiple end uses.”

Miller earlier this week told the Energy Insiders podcast that Australia could be aiming for up to 700% renewable energy, with a massive ramp-up of renewable energy capacity and the excess being directed towards the production of renewable hydrogen for export.

“We’re not going to have an export opportunity until we’ve got to some kind of scale. Once we’ve gotten to scale we can use the Australian opportunity as a way to learn, get experience with producing hydrogen, get costs down with electrolysers, and accelerate adoption of renewable energy,” Miller said.

“At the end of that, we can start to look at an export opportunity.”

ARENA, which provides grant funding to support the development of renewable energy technologies, has identified the production of hydrogen for an international export market as a key investment priority for the organisation. The agency sees renewable hydrogen as a key vehicle for establishing an Australian renewable energy export industry.

While the production of renewable hydrogen in Australia is in its early stages, ARENA has backed several demonstration projects being primarily led by domestic gas suppliers seeking to blend the mains gas supply with a small amount of hydrogen.

Due to the technical limits, that restrict hydrogen blending to as little as five to ten per cent of the gas grid, the total potential of this market is small but could serve as a stepping stone towards building a bigger market.

By building experience and expertise within the local sector, ARENA sees these projects as laying the foundations of what could ultimately become an industry operating at a massive scale. The ability to store hydrogen and the multiple ways that it can be used within the energy system presents an opportunity for renewable hydrogen to play a central role in the transition towards decarbonisation.

“If hydrogen is going to be part of the global energy transition, the amount of hydrogen we are going to need is going to be very large. One thing we are good at in Australia is building very very big things,” the Australian government’s task force leader on the National Hydrogen Strategy Alison Reeve told the conference.

Reeve saw three key roles that hydrogen could play within a future energy system, saying that its adaptability created a huge potential for hydrogen to serve many parts of the energy system.

During a briefing in June, experts from the CSIRO, the Australian National University, and Monash University predicted that the value of Australian renewable hydrogen exports could become a $1.7 billion industry within the next 10-years, built off Australia’s competitive advantages with an abundance of wind and solar and proximity to the Asian market.

Reeve said that hydrogen could serve a direct role in electricity generation, as well as providing a flexible source of demand, where hydrogen production facilities help to balance the electricity grid by matching production with the availability of wind and solar.

“You can put some hydrogen in gas turbines, but hydrogen burns hotter and with different flame lengths. What a lot of people are looking at is an ammonia turbine; an easier way to move hydrogen around is to turn it into ammonia.” Reeve said.

“The second way is to look at the interaction between production and the electricity grid, using hydrogen production as a balancing load on the grid.”

“The third way is to use hydrogen for election generation using a fuel-cell, but this is an inefficient process. The benefit is that hydrogen can be stored for a lot longer than electricity can,” Reeve added.

The ARENA CEO echoed the significant influence a hydrogen production industry could have on Australia’s electricity sector, particularly if new renewable energy projects are built at a large scale that allows excess electricity to be fed back into the grid.

“If we choose green hydrogen we can do solar and wind at giant scale and we know scale drives costs down, which is good for the hydrogen story,” Miller said.

“One of the things that we may get as a by-product of a giant hydrogen industry is really cheap electricity for the domestic electricity system. You can have a thought experiment that says, ‘I have driven the cost of electricity down the curve because I have driven the penetration of renewables cheaply, and I also have a very large source of flexible load.”‘

“Flexible load is the holy grail of the future electricity system.”

Earlier this week, a Siemens supported proposal for a massive solar, wind and hydrogen development moved a step closer towards commencing the development approval process. The proposed 5,000MW combined wind and solar project proposed to be built near the Western Australian town of Kalbarri would match the type and scale of projects needed to make a hydrogen export sector feasible.

The Australian chief scientist Dr Alan Finkel is currently leading the development of a National Hydrogen Strategy that is expected to be finalised by the end of the year.

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