(Perth / Australia) – With an ever-growing pipeline of electrolyser capacity, Australia is the world's second largest green hydrogen market after the Netherlands. While there were still plans for systems with a capacity of 2020 gigawatts (GW) in 2,94, Australia's pipeline of projects in the early and advanced development stages has now grown by 45 percent to 4,25 GW, according to the British analyst firm Wood Mackenzie.
Speaking at the APPEA conference trade fair that concluded in Perth yesterday, Head of Markets and Transitions Prakash Sharma said Australia's key export markets such as Japan, South Korea, China, India and Europe were major carbon emitters and net importers of natural resources. The need for imports there has “increased steadily over the past two decades and is now on average more than 70 percent” of the total energy demand in the regions. As these countries increase their climate targets, they will need to source clean energy to decarbonize the steel, chemical and cement industries, as well as heavy transport, shipping and power generation, the Wood Mac executive said.
A “stable and reliable source of low-carbon hydrogen” is essential and proof of origin is crucial to minimize environmental impact. Standards would help here, and Australia would benefit if rules for the transport, storage and product quality of hydrogen were set and accepted internationally.
The problem remains the costs
By 2050, Wood Mac sees Australia's share of the global market for low-carbon hydrogen and its derivatives at 25 to 45 million tonnes. This corresponds to 50 to 90 billion US dollars in potential export revenue.
However, costs are “still a sticking point”. However, the consulting company believes that there will be cost reductions primarily through extensive automated production of electrolysers; system sizes will also increase and the costs for renewable energy will decrease.
The challenge lies in the transport methods. Liquid hydrogen (LH2), liquid organic hydrogen carriers (LOHC) and ammonia (NH3) could be used for sea transport. The choice then depends on the application, purity and storage requirements. LH2 is preferred “if the end application requires liquid or high-purity hydrogen,” for example in the mobility sector. Ammonia, on the other hand, is the suitable carrier if it can be used immediately and the costs of converting it back into hydrogen are avoided.
“Our calculations and modeling of energy transition scenarios show,” says Sharma, “that the delivery costs for hydrogen in Australia can fall below two US dollars per kilogram in the long term.” This would make it “competitive in the key markets of Northeast Asia.”
Wood Mackenzie estimates that ammonia will be the main carrier of hydrogen in Australia's export markets from the mid-2020s. In Japan and Korea, if low-carbon hydrogen demand reaches 30 million tons in 2050, ammonia would account for a third of the market share.
It would be difficult for major Asian economies to meet climate targets without delivering clean energy, says Sharma: "This is a once-in-a-lifetime opportunity for Australia to harness its renewable resources and become a dominant player in zero-carbon energy trading."
The multi-day, annual APPEA conference exhibition is hosted by the Australian Petroleum Production and Exploration Association, an association of the continent's oil and gas industry. It is considered one of the most important and largest international industry meeting points in the southern hemisphere. It will take place in Canberra in 2022.
Photos
Engie wants to produce green ammonia with Yara Pilbara Fertilizers in Australia / © Engie
