“Like washing your floor with Italian mineral water:” Why hydrogen won’t do the things the gas industry says

The hydrogen hype industry has been in overdrive these last few years, and while reality is slowly dawning that some of its hoped-for applications might never come to fruition, there is still a bit of nonsense around.

At the All Energy conference in Melbourne this week, some are still hopeful. Japanese car giant Toyota was there with one of its hydrogen cars, looking completely out of place in an exhibition hall almost entirely focused on electrification, and particularly of cars. EV charging solutions and software were two of the dominant technologies.

Inside the conference, the experts were also dispelling some of the myths, particularly the gas industry favourite that their expensive networks of pipelines can be converted to delivering hydrogen into the nation’s homes, to heat, cool and help cook the dinners.

Don’t be so silly, the experts said. And the clearest denunciation came during the opening plenary when the Grattan Institute’s Alison Reeve gave a clear outline of what it might be able to do, and what it won’t.

“Where hydrogen is a really bad option is as a widespread replacement for natural gas, particularly the natural gas that you’re using in your home,” Reeve said.

“Hydrogen is always, even if we scale up our industry, it is always going to be expensive to produce, and it doesn’t do the job as efficiently as electricity does when it comes to doing things like cooking and heating.

“So, if anyone tells you that you will be using hydrogen in your home for your heating and cooking, that is kind of like telling you that you should wash your floors and your clothes with a case of imported Italian in water. It’s a very, very expensive way to do it, but it’s not in your best interests.”

The gas industry, at another conference in Sydney earlier in the week, was calling for yet more gas fields to be opened to address the “shortfalls” that they predict will cause power outages, force manufacturing offshore and bring the economy to an end.

Reeve says their fears are overblown.

“In the residential sector, I cannot see that there’s a role for gas, except maybe for the barbecue. In the industrial sector, most of Australia’s industrial sector will be able to use electricity. They are not gas dependent.

“There’s only very few places where you genuinely have, at the moment, that dependence on natural gas. It’s not easy to switch over to electricity, because often that means reconfiguring your processes. It can mean using equipment that costs more upfront and so on, but that transition will happen.

“Then there’s the role of gas in the electricity system. Most people’s models of what the electricity system looks like now to 2050 will have a role for gas … for the week long period where it’s a bit cloudy, it’s not particularly windy and your own option is to massively overbuild renewables and not use them for most year.

“We’re going to be using a lot less gas than what we do at the moment. And so what we need to think about is not expanding the gas industry because it’s quote, unquote ‘”‘important’. It’s about right-sizing it and shrinking it and getting it into the right places, so that if we do need it to play that critical role, we can do it.”

The case for hydrogen in most applications is even weaker, because it is so inefficient.

“We used to think about hydrogen as the fuel that was kind of magic, right? It could do everything,” she said. “One of the big changes that’s happened over the past couple of years is people have come to realise that actually, hydrogen is the fuel you use when you can’t use electricity.”

It still has opportunities, particularly in the green iron and steel industry, and fertiliser and ammonia.

But, according to Australian Renewable Energy Agency CEO Darren Miller, green hydrogen – still important to cut emissions in hard to abate industries – will still be costly and will need significant funding support, perhaps more than was thought.

“It’s going to require probably even more support than we imagined to just break through those early hurdles of the cost efficiencies, or the economies of scale that we find in these new technologies,” Miller told the conference.

“Electrolysers probably need to run at $20 a megawatt hour to be economic and the NEM (National Electricity Market) might be running at $80, $90, or $100 a megawatt hour.

“So your economic opportunity, if you’re a developer of a wind and solar farm, is to make more money by providing that purchase than them, which essentially is just highlighting the uneconomic nature today of green hydrogen.

“If we are serious about the hydrogen opportunity – and I think we ought to be, and we are in this country – it’s just going to require subsidies to fill that gap, or a green premium to be apparent, to also fill that cost gap.”