A green hydrogen export industry is not yet commercially viable but the price gap is closing, according to the Australian Academy of Technology and Engineering’s submission to consultation on Australia’s National Hydrogen Strategy.
Green hydrogen is fuel that has been produced using only renewable energy sources, and is in high demand from Japan.
Dr John Söderbaum FTSE, Chair of the Academy’s Energy Forum, said: “The emerging hydrogen industry has the potential to replace Australia’s LNG exports in the long term.
“However, factors such as the need to supply and manage additional concentrated electricity loads in some locations and how to best reduce the cost of production and export need to be considered.
“For instance, the Gladstone LNG export facility currently exports around 22 million tonnes of LNG each year, with an average of one vessel shipping LNG to Asia each day. By 2022, it is expected that Australia will have 10 LNG trains exporting 80 million tonnes of LNG per year.
“To be viable in the global market, a new natural hydrogen facility would need to produce and export the amount of energy equivalent to at least one of these trains in green hydrogen.”
A green hydrogen facility producing 8 million tonnes (about 35 per cent of Queensland’s current LNG exports) would need electricity generation facilities costing $6.75 billion, equating to an electricity cost of $18.8/GJ. This price excludes other costs such as the liquefaction, storage and shipping of the hydrogen.
The Academy estimates that Australia needs to be able to deliver green hydrogen to Japan for a cost of about $17.4/GJ. The estimates suggest that this target, while still some way off, is achievable.
The Academy’s submission also considers how hydrogen production can best be integrated with current electricity systems.
It argues that while an export hydrogen industry driven by solar power would require a vast land area for setting solar arrays, such an initiative would be feasible in an area such as the Pilbara, given careful planning and consideration of factors such as access to water and respect for native title rights.
The Australian Academy of Technology and Engineering is a Learned Academy operating as an independent, non-political and expert think tank that helps Australians understand and use technology to solve complex problems.