South Australia unveils plans for 100% renewable hydrogen economy

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South Australia to use its abundant cheap wind and solar to make Australia’s first move towards renewable hydrogen economy and multi-billion dollar export potential.

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South Australia has outlined plans for a 100 per cent renewable hydrogen economy, saying that its enormous wind and solar resources mean there is nowhere else in the world as well positioned to produce, consume and export 100% green hydrogen.

The plan was unveiled at an international hydrogen conference that began in Adelaide on Tuesday, in a state that is already sourcing well over 50 per cent of its electricity needs from wind and solar and which is on track to reach “net 100 per cent renewables” before 2030 and go well beyond that in the following decade.

Just last week, the Germany-Australian Energy Transition Hub talked of “200 per cent renewables” as the most economic and effective plan to provide renewable power for electricity, transport and buildings, and to build an export industry. It seems South Australia will inevitably be the first to get there.

The state’s Liberal government says the hydrogen plan will boost the economy and future jobs opportunities. Renewable hydrogen, driven by the plunging costs of wind and solar and hydrogen electrolyser technology will allow the world to “rethink” ways to generate and store energy, power transport fleets and heat homes, and to provide a huge multi billion dollar export market.

“This initiative fits in perfectly with our plan to help deliver more reliable, more affordable and cleaner energy for our state,” says energy minister Dan van Holst Pellekaan.

“It’s likely that nowhere else in the world is as well positioned as South Australia to produce, consume and export 100% green hydrogen.

“Some of our longest-standing and closest trading partners are signalling that they will need hydrogen to make their energy transitions over coming decades, and we want to make the most of that growth opportunity by becoming a hub for the export of renewable energy.”

Indeed, chief scientist Alan Finkel and his team has been working on an Australian hydrogen strategy, which he will finally get to formally present in late November when the COAG energy ministers meet for the first time this year, although he has been briefing state authorities in recent months.

That document is likely to outline the huge potential of hydrogen in the domestic and export markets, and highlight the possibility of having massive arrays of wind and solar – in the tens of gigawatts – to underpin this transition with cheap renewables. Some private investors, such as those involved in the Asia renewable Energy Hub, are already moving down that path.

They are suggesting a 15GW wind and solar hub in the Pilbara, while others such as Sun Cable in the Northern Territory are looking at a massive 10GW solar array, but to power countries such as Singapore through direct links.

South Australia is not waiting around, keen to tap into the huge investment pipeline of more than 16 gigawatts of new wind and solar projects, and to take advantage of the transition it has already made, having closed down coal power several years ago, and soon to reduce gas generation to a relatively minor role.

“Now is the time to step up the development of a hydrogen economy,” premier Steven Marshall says. “While South Australia is not alone in setting its sights on developing a hydrogen economy, the State has a first mover advantage.

“We believe we can deliver green hydrogen to our trading partners to meet their ambitious plans. We are already working with the Commonwealth and all State and Territory Governments to develop a National Hydrogen Strategy for 2020-2030. This Hydrogen Action Plan will help South Australia be a supplier of choice for green hydrogen in Australia.”

The state already has several trial and smaller hydrogen projects under development, such as a 30MW hydrogen electrolyser in Port Lincoln and a smaller one at Tonsley Park in Adelaide, and a “test-bed” at the University of South Australia. There are bigger ones in the planning.

One of the biggest projects is Neoen Australia’s approved Crystal Brook, which plans up to 125MW of wind generation, 150MW of solar PV and 130 MW/400 MWh of battery storage and a 50MW hydrogen “super hub”, the exact details of which are still being worked on.

Recent studies have shown that the cost of wind and solar has fallen so dramatically, and the cost of electrolysers is also expected to fall at the same rate, that renewable hydrogen will be able to compete on costs with “brown” or “grey” hydrogen, used from coal or other fossil fuel sources.

The issue with the renewable hydrogen is the cost of transport, particularly to the biggest markets in east and south Asia – Japan, South Korea, and China and Singapore – which will be double the price again. That has led some to suggest using cheap hydrogen, thanks to cheap wind and solar, to establish more industry in Australia and export products manufactured with green energy, rather than the green energy itself.

“Customers in both Australian and overseas markets seeking to reduce emissions recognise the difference between renewable and other forms of hydrogen,” the government document says.

“For South Australian renewable hydrogen to be attractive in these markets, it will be important for its origin to be guaranteed by a scheme that meets market requirements.”

Note:

In a speech at the same conference, Finkel said his research made him “acutely aware of the unparalleled possibilities this source of power can unleash.

“However, I am also aware, and I firmly believe, that its benefits across all areas will only be realised by a wholehearted commitment to safety and transparency, and our ability to bring the Australian community along on the journey.”

Finkel spoke with his arm in a sling, prompting a Twitter quip from Oliver Yates – the fellow hydrogen enthusiastic who is a former Clean Energy Finance Corp chief executive, and independent candidate for Treasurer Josh Frydenberg’s seat of Kooyong, on the potential policy challenges of such an idea.

 

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