Chief scientist Alan Finkel describes it as “shipping sunshine”.
In the introduction to the National Hydrogen Strategy released late last week and endorsed by state and federal governments, Finkel says Australia has an enormous opportunity to become a global clean hydrogen powerhouse.
“We can become a leader in a new industry that I call shipping sunshine,” Finkel wrote. Asked by RenewEconomy in an interview on Wednesday to explain what he meant by that, Finkel refers to the role of the sun in delivering sunshine for solar power, but also creating the wind for wind power, and the evaporation and humidity for rain, and ultimately hydro.
“Whether it is solar PV, or wind, or hydro, it all comes from sunshine,” Finkel says. “And in Australia we have two enormous assets, land and sunshine, and we want to learn how to capture the value of it, and we want to ship it. Shipping sunshine is what we can do, cost effectively, to the rest of the world.”
These are significant remarks because the politics surrounding the hydrogen strategy means it is required to declare itself “technology neutral”.
That means that there is no stated preference for “green hydrogen” created through electrolysers using wind and solar, “brown hydrogen” created by the gasification of coal, hopefully combined with carbon capture and storage, or steam methane reforming, mostly using gas.
There are fears, however, that the national hydrogen strategy in the hands of the current Coalition government will end up being a significant strut of support for the struggling coal power industry.
And one thing that is clear from the National Hydrogen Strategy and its voluminous associated documents is this: hydrogen from fossil fuels only gains a major foothold in Australia if the government is half-hearted about emissions reductions – in scenarios described by Deloitte as “business as usual” and “targeted deployment”.
That may appeal to the current Coalition government, but the scenarios painted by Deloitte make it clear that if the governments are serious about reducing emissions to zero, in accordance with the Paris climate targets, then “clean hydrogen” effectively becomes a race between electrolyser technologies and competing storage technologies such as batteries and pumped hydro.
Deloitte’s most optimistic “energy of the future” scenario represents “deep and rapid global decarbonisation” , and it is here that Australia is presumed to have taken the lead in a thriving global market if it knows how to seize its vast opportunities
This is driven, according to these scenarios, not by hydrogen from coal or gas with CCS, but almost exclusively from green hydrogen, and powered by cheap wind and solar.
By 2050, Deloitte modelling suggests, there will be need for more than 912 terrawatt hours of additional wind and solar output in Australia to meet those needs and opportunities.
That’s more than four and a half times the total of the current National Electricity Market, and more than 20 times more renewables than we have now.
Its only competitor in a zero emissions outcome is the “electric breakthrough” scenario, where the cost of storage, particularly batteries, falls so far that everything is electrified.
“Electricity (in combination with battery and pumped hydroelectricity storage) can meet almost all energy needs,” the report says of this electric breakthrough scenario.
“Electricity replaces the use of gas for heating and cooking, and the use of petrol and diesel in road transport. Consequently, despite strong global commitments to reduce carbon emissions, there is minimal uptake of hydrogen for energy.”
“I want the world to transition to a zero emissions future – an electric planet with zero emissions electricity. In Australia, that will be solar wind and hydro. In other countries, that will be solar, wind, hydro and maybe nuclear,” Finkel says.
But Finkel adds that it is “not clear that all energy will come from electrons.” He points to heavy transport, and shipping in particular, as well as industrial uses such as steel making. Some of this wind and solar will be stored in batteries, some of it in pumped hydro, and some as a transportable fuel (hydrogen and related carriers).
Perhaps what Finkel is telling us is that we should expect a a tie between electrolysers and other forms of storage. Or at least horses for courses and a defined market for each.
One thing that is clear is that whatever Australia does, making hydrogen from the current grid is a dumb idea. Or at least those parts of the grid where coal remains significant.
It would increase emissions rather than reduce them, and produce far more emissions than the maligned process of (brown) coal gasification and steam methane.
Perhaps this is why the most enthusiastic state governments for the hydrogen economy – Tasmania and South Australia – are those that either already source all their generation from renewables, or intend to do so within a decade.
The question for the other states then become whether carbon capture can actually be done effectively, and at a competitive cost. Or, will they too, focus on wind and solar. Carbon capture is easier in hydrogen than coal power plants, because the hydrogen process already separates it – but while it could bury the bulk of emissions it will never be rid of them all. (See table above).
Finkel says if Australia’s goal is to fulfil the opportunities of a massive export industry, the choice of technology may ultimately come down to a choice from its customers.
Because of this, the next significant move will be in developing a “certificate of origin” scheme, which will detail exactly where the hydrogen has come from, how many tonnes of emissions have been emitted in its process.
“The certification of origin scheme will ensure that the countries know what they are getting,” Finkel says.