Australia will need 812 GW additional wind and solar for green hydrogen dream

Australia would need a whopping total of 812GW new solar and wind by 2050 to grab a share of the world’s green hydrogen market.

That's according to a new Bloomberg NEF report released this week.

The report explores three decarbonisation pathways for Australia to 2050: A base case Economic Transition Scenario, a Net Zero Scenario, and a Hydrogen Export Scenario (HES). The HES is a new addition to the annual report.

It shows Australia could meet its own net-zero targets with renewable energy and green hydrogen, while also supplying around 5.7% - or 28 million metric tons per year - of expected global hydrogen demand in 2050.

Great, so what's the catch?

This would boost Australia’s electricity demand by 169% more than required to meet the nation’s net zero emissions targets – that’s the equivalent of 1,963 terawatt-hours by 2050, or seven times more than today.

“To supply this demand on a least-cost basis,” the report says, “wind and solar capacity across the country would need to grow.. 21 times more than today."

To put that into perspective, it would require $592 billion between 2022 and 2050. That's around 2.5 times more than the cost of reaching net zero alone.

But where would all this new capcity go? BNEF says that while most of it would be onshore wind and solar, it would be focused on the more remote regions of the country, in the form of specialised project hubs.

So, is it worth the enormous footprint and cost for Australia to export such a small percentage of the global green hydrogen supply?

BloombergNEF’s head of Australia, Leonard Quong, thinks so. “We are one of the few countries in the world with such an abundance of land, such an abundance of high quality resources.. there is a real opportunity to become an investment hub for the supply of the green energy"

Even without the hydrogen export component, BNEF’s Net Zero Scenario (NZS) finds that to reach the Paris target by 2050 will require a $1.9 trillion investment. Australia would still have to install ten times the amount of wind and solar available today.

Notably, the Net Zero Scenario also requires Australia’s transport sector to pull its weight. “In our modeling to get to net zero we found that, when it comes to EVs, 100% of all new cars sold on Australian roads would need to be electrified by 2033,” Quong said.

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