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Green hydrogen could help solve the puzzle of getting to 100 pct renewables

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It’s one of the common themes of studies that look at the challenge of the transition to 100 per cent renewables. The hardest bit is going to be the last five or ten per cent.

Every grid, large or small, needs a lot of excess capacity to ensure there is enough electricity supply at all times –  even those that operate largely on coal or gas. The challenge of variable wind and solar is how much extra capacity, and/or storage, is needed to deal with the possibility of an extended wind or solar drought.

Enter green hydrogen. Or, to be specific, renewable hydrogen. The scale of the projects being proposed around Australia, and overseas, is phenomenal. One project alone, the Western Green Energy Hub north of Esperance, would include 50 gigawatts of wind and solar – not far short of the capacity of Australia’s main grid.

Iron ore billionaire Andrew Forrest casually describes plans of delivering 15 million tonnes of green hydrogen by 2030, the foretaste of an industry he expects to be worth $A16 trillion by 2050.

A lot of things need to happen by that time. According to a presentation by global energy giant Iberdrola at the Ammonia Energy conference in Australia last week – the cost of wind and solar will need to fall by around 30-40 per cent, the cost of electrolyser technology (which splits water into hydrogen and oxygen) will need to fall by at least 50 per cent. The efficiency, or load factor, of electrolysers will need to lift by 10-20 per cent.

But if those goals are achieved, and the ambitious plans of Forrest do go ahead, it will require something in the order of 150-200GW of new wind and solar capacity – vast arrays of wind and solar in the outback, or possibly offshore.

There are dozens – by some count up to 100 – of smaller green hydrogen projects of some type around the country. Most of this will be centred on producing green hydrogen or ammonia for export and industrial uses, including green steel making, and may be for transport.

But what if these huge arrays were connected to the grid? Some of the smaller projects surely will be, because they are likely to be located closer to ports and industrial centres, but the bigger ones could be too, if the transmission lines were built. And providing power to fill the gaps elsewhere would likely constitute just a small fraction of their overall capacity, much of which could be stored anyway.

The idea is starting to interest the Australian Energy Market Operator, particularly as it works to update its 20-year blueprint known as the Integrated System Plan, looking at scenarios for technology change and climate policies, and what needs to be done to get there.

In the next ISP, AEMO is modelling a scenario of Australia as a hydrogen export superpower, the only scenario, incidentally, that it sees as equivalent to a 1.5°C scenario, and where hydrogen effectively replaces the existing LNG industry over the long term.

It is starting already to dial those considerations in its analysis of shorter-term needs. In the recent Electricity Statement of Opportunities (ESOO), its annual forecast of demand and supply needs for the next five to 10 years, AEMO for the first time introduced a major renewable hydrogen component.

It signifies a major change. Until recently, AEMO has been gradually winding back demand forecasts because of the combined impacts of rooftop solar and improved energy efficiency.

Now, it’s looking at dramatic growth in the latter part of this decade, from the electrification of appliances and industrial uses (replacing gas), as well as transport (electric vehicles), and also the growing use of renewable hydrogen.

In total, it says, this could add an extra 73 terrawatt hours of demand by 2030-31 (approximately 40 per cent above current operational consumption on the main grid. But by 2050, hydrogen-related demand could be five times larger than current NEM consumption (see graph above).

The good new for the grid operator is that this demand can be tailored to the vagaries of wind and solar output, dubbed variable renewable energy (VRE).

“Electrolysers are expected to be able to operate with a relatively wide technical envelope, operating at capacity while VRE is plentiful, yet avoiding operation during the highest price periods to keep hydrogen production costs low,” AEMO says in its report.

“This flexibility is expected to reduce the impact on maximum operational demand.”

It might look something like this graph above. It will relieve pressure on what to do with all the excess wind and solar coming from rooftop installations and large scale farms across the grid. And it could be marshalled to contribute to the dispatchable resources needed to maintain supply.

AEMO’s head of systems design and engineering Alex Wonhas recently spoke about the opportunities of green hydrogen and what it might mean for the grid, and the transition to renewables, at the same Clean Energy Council webinar where Forrest spoke last month.

“It’s a huge challenge, but frankly, it’s also a really exciting challenge,” Wonhas said. Firstly, he said, if the economics of hydrogen do work, it’s largely because the cost of wind and solar will be substantially lower than it is now. And that means the cost of electricity will be lower, and consumers will benefit.

It can also help solve the challenge of having enough dispatchable power, adding to the possibilities of battery storage and pumped hydro.

“It will enhance the reliability of the system,” Wonhas says, although he warns that it is early days yet. “Now we have the quite exciting task of unpacking all of this in the upcoming version of the Integrated System Plan. The hydrogen superpower scenario is where we’re really unpacking a lot of the technical details, so watch this space.

AEMO, of course, will have some other shorter term challenges, like what to do with insufficient demand, particularly as the result of rooftop solar.

The ESOO flags the possibility that rooftop solar – little of which can be controlled or orchestrated – could account for three quarters of total demand within the next five years. That’s a big slice of the pie that AEMO will seek to control.

It is also facing the challenge of having enough wind and solar in the main grid to match all the demand at various points of the day.

This will happen by 2025 – it’s now AEMO’s base case scenario rather than just a hypothetical – and new CEO Daniel Westerman wants the grid to be ready to accommodate that, rather than forcing wind and solar to be switched off.

“It better be achievable because somehow this ended up as one of my KPIs for this year so we better make this happen,” Wonhas told the webinar.

“What he (Westerman) said is, is we need to prepare the system for 100% instantaneous renewable energy so that doesn’t mean the system runs all the time on renewable energy.

“However, when we look at just the build rate of distributed solar, large scale solar large scale wind, and batteries coming in, we actually see a system that at least at some point in time, will run at 100%, renewable energy, if there are no constraints in only four years time.

“So this is just the reality. So we, as a system operator, really need to get ready for that. Now what gives us confidence that, while it’s a challenging task. I think it’s a doable task.

“We already have a number of smaller scale systems that actually do run on 100% Instantaneous renewable energy, so it is technically feasible.

“We also have parts of our large interconnected system running on 100% renewables, so to give you one example on October 11 last year.

“The whole of South Australia was running, purely on solar energy 78% rooftop PV 22% of large scale solar and then there was a little bit of wind. Now, admittedly, that was with a bit of trainer wheels on as we also had gas generation running in the background to keep the system stable and we could export that to Victoria.

“But we think there are ways to take the training wheels off and and do that as 100% renewables in a sort of isolated system. We’ll do that through something that we call the NEM engineering framework … and there will be studies and tools developed and then we will actually start to run some real tests on the real thing.

“I’m sure it’s going to work but it’s also going to be quite exciting. And then I think the last big technical challenge that we are seeing is something that we call system strength.

“We need to find some novel solutions for that base-load technology that (currently) does it, but we are really excited to use modern inverter based systems, to solve the challenges with completely inverter based machines, so that we can run an energy system of the future securely reliably and frankly at a low cost.”

 

Giles Parkinson

Giles Parkinson is founder and editor of Renew Economy, and is also the founder of One Step Off The Grid and founder/editor of the EV-focused The Driven. He is the co-host of the weekly Energy Insiders Podcast. Giles has been a journalist for 40 years and is a former business and deputy editor of the Australian Financial Review.

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