Finkel says there is no political will for hydrogen targets in Australia

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Finkel says there was no political consensus for hydrogen targets, and cast doubts about long-term cost effectiveness of hydrogen using carbon capture.

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Chief scientist Alan Finkel says he deliberately avoided recommending national targets for hydrogen in Australia, as part of the National Hydrogen Strategy released last month, because it was unlikely he could get unanimous agreement from energy ministers.

Speaking at a forum hosted by the Clean Energy Council in Sydney, Finkel said it was apparent there would be opposition to any hydrogen targets, so he instead focused on addressing some of the immediate barriers to building a hydrogen sector in Australia and addressing some of the skills and regulatory gaps.

Finkel did not specify which ministers were opposed to the introduction of a national target for hydrogen, but suggested that there may have been opposition from federal ministers Angus Taylor (energy and emissions reductions) and Matt Canavan (resources).

“Some states, in particular, are willing to take the chance and possibly have some small price impact in order to achieve a hydrogen target. Others not. The Commonwealth might not be, and to try to get them all to agree on target, we obviously discussed it with the ministers, and it just was not practical,” Finkel said.

“I’m delighted to see New South Wales announce state-wide targets not a target to get 10% into one suburb of Sydney is a state-wide target that the minister has announced. And to me that vindicates the approach that we’ve taken.”

Finkel said he wanted to a avoid a repeat of the Clean Energy Target recommendation contained within Finkel’s review of the National Electricity Market, which was swiftly abandoned by then Turnbull government. 

The Clean Energy Target recommendation, was the only recommendation of Finkel’s National Electricity Market review that was not formally adopted by the COAG Energy Council, following opposition from the federal government.

Seeking to avoid the same fate, Finkel told the forum that he instead opted to use the National Hydrogen Strategy to develop a “pathway” for how governments can support the early establishment of the industry in Australia.

Finkel blamed the prevailing political environment for an inability to specify a target for the adoption of zero-emissions transport, lamenting the lack of “political will” to get behind such a goal, which could accelerate the adoption of both electric vehicles and hydrogen-fuelled vehicles.

“In terms of domestic targets, Australia just has not been able to get its political will together to have zero-emissions vehicle targets of any kind. For us to impose that through the hydrogen strategy was effectively impossible,” Finkel told the Clean Energy Council forum.

Finkel said that it was crucial that Australia was proactive in establishing safety and skills initiatives that would build confidence amongst future customers of an Australian hydrogen industry.

“The first step is to adopt a nationally coordinated approach to deal with issues like safety,” Finkel said. “Safety, always has to be number one, today and going forward. Communities will not have much tolerance for industry that doesn’t have safety as the highest priority.”

Many countries, including South Korea, Japan and Germany, which are all exploring ways to ramp up the use of green hydrogen within their own economies, effectively see Australia as a preferred supplier of hydrogen, reflecting Australia’s natural advantage in renewable energy resources and gas export experience.

Finkel said that the National Hydrogen Strategy had been designed to ensure Australia can seize this opportunity, and a key part of doing so was to first build capabilities within Australia’s domestic market, to demonstrate Australia could be a credible global supplier of hydrogen.

“The credibility issue is important. They want to know that we are seeing the value of hydrogen and we have the expertise to be an available, continuous, supplier,” Finkel said.

“Everybody we spoke to, from politicians to investors to other countries, they all keep coming back to the importance of having that domestic expertise for credibility and actual productivity purposes.”

The National Hydrogen Strategy takes a “technology-neutral” approach to the development of a hydrogen industry in Australia, exploring both the potential of hydrogen production using renewable energy sources like wind and solar, as well as through the use of coal and gas combined with carbon capture and storage.

Finkel acknowledged that the working group tasked with developing the strategy had been directed to do so by the COAG Energy Council, which is largely steered by federal energy minister Angus Taylor, but also that he agrees that the most important consideration is the ultimate impact on emissions.

“We were specifically, under the terms of reference, instructed to be technology-neutral, and we have been, and so it doesn’t look like any of the taskforce’s, or my, personal preferences,” Finkel told the Clean Energy Council forum.

“Look, I’m on public record. And I have been ever since we did the electricity review, of genuinely being technology-neutral. I think the only thing that counts is the emission of carbon dioxide into the atmosphere.”

The hydrogen strategy left open the potential for low emissions hydrogen to be produced using fossil fuels as a feedstock, through the conversion of coal and natural gas, and storing the carbon emissions produced through the process.

ACT energy minister Shane Rattenbury attempted to seek commitments from other energy ministers to only pursue the development of renewable hydrogen, but the proposal was blocked by Angus Taylor, who refused to allow the meeting of the COAG Energy Council to consider the proposal.

However, Finkel said he was uncertain about whether the use of fossil fuels to produce hydrogen could even remain cost-effective in the long term, particularly with expected improvements in the cost of renewable energy and electrolysis technologies.

“If you can do hydrogen production cost-effectively from a fossil fuel pathway, being methane or coal, with substantial carbon capture and storage, I’m not talking about trivial carbon capture and storage, substantial carbon capture and storage such that it comes in at an acceptable level, then so be it. Can you do that cost-effectively? The answer is maybe,” Finkel added.

“So, I don’t know the answer. I don’t know whether it would be cost-effective. Today, it could be cheaper than electrolysis from solar and wind. Will it be ten years from now? Or 20 years from now, cheaper than electrolysis? I don’t know.”

The hydrogen taskforce and working group will continue to work with the COAG Energy Council on the implementation of the National Hydrogen Strategy and is expected to report back to energy ministers on progress when they next convene sometime in 2020.

This week, construction commenced at the $11.4 million hydrogen production facility at the Tonsley innovation district in South Australia. The project will include the installation of a 1.25MW hydrogen electrolyser, with the hydrogen produced to be blended with the district’s natural gas supply, as part of a trial undertaken by Australian Gas Networks.

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14 Comments
  1. KiwiInOz 1 week ago

    Our Government believes in prayer, wishful thinking (but I repeat myself), and someone else (the all powerful market) doing the directing. Laissez faire governance at its worst.

  2. Aluap 1 week ago

    I thought these were weak reasons for not providing best inderendent advice. Finkel seems to be a fizzer.

  3. Jo 1 week ago

    The Trojan Horse for the fossil fuel industry:
    “… The National Hydrogen Strategy takes a “technology-neutral” approach to the development of a hydrogen industry in Australia, exploring both the potential of hydrogen production using renewable energy sources like wind and solar, as well as through the use of coal and gas combined with carbon capture and storage. …”

    • Jim orchard 1 week ago

      As Finkel says it is the CO2 that counts.

  4. Peter_61 1 week ago

    I must confess to being confused as to how Green Hydrogen/ Green Ammonia/ Green Gas will ever be economically viable. H2 has a higher heating value of 142 MJ/kg = 39.4 MWHr/tonne H2. If the market price of ammonia is $AUD600/tonne NH3, then that represents $3400/tonne H2. If I have an electrolyser that is 100% efficient, free treated water, a H2 plant that is gifted to me that doesn’t require maintenance, a free N2 plant that has no maintenance nor uses any energy, all my workers turn up for free, I am gifted an ammonia plant for free (that similarly needs no maintenance) and curiously needs no energy to operate, and I am prepared to operate with no profit (such that electricity for the electrolyser is my only cost), then I can afford to pay $86/MWHr for electricity. With some of the generous assumptions unwound, a plant making hydrogen and thence ammonia from green electricity is probably going to be able to pay only $10-$20/MWHr for electricity. I just can’t see renewable electricity suppliers queuing up to enter into contracts at that sort of price.
    If I crank the handle examining electrolysing water to make hydrogen to displace methane out of a gas pipeline (at about $10/GJ), free water, free electrolyser, 100% efficient electrolyser, workers for free, no maintenance, free compressor etc, then I can pay $1420/tonne H2 or about $36/MWHr for electricity. So with some unrealistic assumptions unwound, perhaps $5-$15/MWHr. Same conclusion.
    In this environmental debate, can the truth-speakers please stand up.

    • Jim orchard 1 week ago

      I think the assumption is that we are a world of excess renewable generation so the price for the renewable electricity is the marginal price – which is close to zero. Best H2 technology would be able to stop/start to take advantage of low power opportunities

    • Joe Booth 1 week ago

      there won’t be any ministers standing up, that’s for sure!
      and if we want to produce it with FF sources we need also to consider the absurd cost of CCS!
      i still cannot fathom how certain ministers are not run out of town every time they mention CCS as another good reason to keep digging up coal!
      CCS is a furphy, a fools errand and any other cryptic names you can think of.

      • Peter_61 1 week ago

        Yes, I believe CCS (as opposed to EOR) is the biggest lie ever perpetuated upon the masses by self-serving technocrats. It started at $40/tonne of CO2 sequestered, then migrated to $40/tonne CO2 to gather it, $40/tonne to transport it to illusionary injection locations and $40/tonne to inject it. Some simple back-of-the-envelope calculations show that this sort of cost destroys the economics of any process it is attached to. I feel the researchers and research organisations involved need to take off their morals and ethics, give them a jolly good wash on a cycle normally reserved for soiled nappies or grease-stained clothes. The only positive I can see in CCS is that it is a practically and economically illusionary solution that “just needs more time and research funding” – which is equivalent to kicking the can down the road. I don’t think we should put too much blame on the politicians – after all a PhD in self interest and a loud mouth doesn’t equip one well to make decisions about things involving physics, logic and economics. The ethics of the technical advocates pushing CCS should come in for far greater scrutiny.

    • Ian 1 week ago

      You are wasting your time . Michael loves hydrogen and will keep pushing this ridiculous idea even to the point of saying coal and gas can be used to make this , as long as you use CCS. He is turning to the dark side!

  5. Russell Hanna 1 week ago

    Reading the above, comments below, I amazed at the lack of discussions for H2 as a potential fuel source for zero emissions (H2+O=H2O), that has a comparable density to fossil fuel for a modern economy. Batteries can’t do it both in density and emissions of production. Further, we are at the start of the H2 economy. Using the TV analogy, we are the black and white stage, not the 4k model of today.
    Lets have a discussion on how to make H2 the energy source, understanding what it is today, will evolve into the future. I for one and am genuinely excite about the potential of a real, abundant and clean energy being considered.

  6. Ren Stimpy 1 week ago

    Right now there are far better and more efficient things to do with excess renewable energy – e.g’s pump water, heat water, charge electric vehicles, charge stationary batteries. These will maximise the benefits of the excess renewable energy and keep those benefits in this country. When the domestic market for these more efficient things is fully satisfied, if we still have excess renewable energy then sure let’s go wild with hydrogen production for export.

  7. JackD 1 week ago

    Oh it’ll go the same way as every other sensible review / report. Unless it involves bolstering the case for another tax-cut morsel.. Federal Government has the tank firmly stuck in reverse!!!

  8. Mark Umbers 1 week ago

    I think Alan Finkel is a very clever man. He knows the zealots he is dealing with so his approach is “lets have a look at doing it both ways”. The out come when all the evidence is in will be determined by who ever is in government because they will twist the evidence to suit their own agenda. At least this way we will get a pathway for renewable hydrogen even if we have to get a pathway to carbon capture and storage hydrogen too, and while I do not believe this is possible and simply another excuse to slowdown renewable energy at the cost of turning Australia west of the dividing range in to a desert. Carbon capture and storage technology might come in handy if we have to spend trillions on CO2 scrubbers down the track.

  9. Kramhh 1 week ago

    Why is Finkle evening talking about the idea of targets for h2 at this stage. I think he has been bedazzled. Try analysing the results of the various pilot programs first, to determine if there is any actual benefit in going down this path. All the sums I’ve done say it is a bad idea for electricity storage and transport (other than lunching rockets into space).
    Shouldn’t it go something like, pilot program X and Y show a likely potential for an economic benefit Z over the other clean storage/transport options.
    Maybe if h2 was the only show in town it might make sense to incentivise for transport and grid, but there other already proven cheaper, more effective options i.e. batteries, phes, thermal storage, which have clear paths for continuing price reductions. Why aren’t you instead considering targets for say BEVs?

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