National Hydrogen Strategy Issues Papers

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Chris Matthews

Issue 1: Hydrogen at scale

1. What scale is needed to achieve scale efficiencies and overcome cost barriers?

What scale is needed to achieve scale efficiencies and overcome cost barriers?
For electrolysis the scale will need to be enormous, with market carve out and concessions, because the technology is not cost competitive

For photocatalysis the technology needs to be demonstrated with appropriate reactor technology, then the scale will need to be increased rapidly. However, because the technology does not require power, or even pure water, it will be cost-competitive even at modest scale

2. What approaches could most effectively leverage existing infrastructure, share risks and benefits and overcome scale-up development issues?

What approaches could most effectively leverage existing infrastructure, share risks and benefits and overcome scale-up development issues?
The best thing that can happen is for the projects within South Australia to be given flagship status and used as trials for technology, supply chains and demonstrators

3. What arrangements should be put in place to prepare for and help manage expected transitional issues as they occur, including with respect to transitioning and upskilling the workforce? How do we ensure the availability of a skilled and mobile construction workforce and other resources to support scale-up as needed?

What arrangements should be put in place to prepare for and help manage expected transitional issues as they occur, including with respect to transitioning and upskilling the workforce? How do we ensure the availability of a skilled and mobile construction workforce and other resources to support scale-up as needed?
The FEnEx CRC is proposing a National Hydrogen Curriculum be established, based in South Australia, and that is be co-aligned with the demonstration projects.

Again, the best thing here will be to work with the South Australian Government and the SA based projects to develop the pathways and help upskill the workforce

4. What lessons can be learned from the experience of scaling up supply chains in other industries?

What lessons can be learned from the experience of scaling up supply chains in other industries?
I don't have the expertise to answer

5. When should the various activities needed to prepare for hydrogen industry scale-up be completed by? What measures and incentives are needed to achieve?

When should the various activities needed to prepare for hydrogen industry scale-up be completed by? What measures and incentives are needed to achieve
Hydrogen can replace fossil fuels in all aspects, and is many ways it is more versatile

The fact is that industry will be ready, once hydrogen is available at around USD$2/kg

To get there we will need to accelerate photocatalysis technology - already shown to work - very quickly through the middle TRLs, so that it is available to large scale industry within 10 years

If this very expensive hydrogen roadmapping process does not do this, then it will be viewed by future generations as a missed opportunity to avoid catastrophic climate change

Issue 2: Attracting hydrogen investment

1. What changes to existing government support and additional measures are needed to:

What changes to existing government support and additional measures are needed rnment support and additional measures are needed
Follow the lead of South Australia as the most progressive sub-national Government in the world on hydrogen

2. How do we ensure an attractive investment environment for private sector finance? Which methods would be most effective in leveraging maximum private sector finance and which activities should governments prioritise with limited funds? How should these methods change over the short, medium and long term?

How do we ensure an attractive investment environment for private sector finance? Which methods would be most effective in leveraging maximum private sector finance and which activities should governments prioritise with limited funds? How should these methods change over the short, medium and long term?
The investment environment will take care of itself - when we get $2/kg hydrogen. Until then we will be propping it up and it will only be piecemeal

3. What level of domestic market support is needed to achieve COAG Energy Council’s ambition of being a major global player in hydrogen? In particular, what types of support will best provide the necessary domestic skills and capabilities and ensure domestic markets are available in the event that international markets do not emerge as quickly or as extensively as expected?

What level of domestic market support is needed to achieve COAG Energy Council’s ambition of being a major global player in hydrogen?
For domestic skills and capability growth we need demonstration projects - like we already have in the pipeline in SA. Back those projects and use them plus the hydrogen curriculum to develop the sector from SA outwards

4. What market and revenue designs and settings will best allow for sustainable growth of the hydrogen industry and an appropriate level of benefits flowing back to the Australian public?

What market and revenue designs and settings will best allow for sustainable growth of the hydrogen industry and an appropriate level of benefits flowing back to the Australian public?
Same royalty architecture as LNG, but with a stronger tax regime. We don't get anywhere near enough tax back from our LNG. Keep the system, increase the tax level

5. What market signals and settings are needed to capture hydrogen’s sector coupling benefits? When should these market signals and settings be applied?

What market signals and settings are needed to capture hydrogen’s sector coupling benefits? When should these market signals and settings be applied?
Need $2/kg hydrogen. That is the signal

Issue 3: Developing a hydrogen export industry

1. How do we best position and sell the benefits to international partners of investing in Australia’s emerging hydrogen industry?

How do we best position and sell the benefits to international partners of investing in Australia’s emerging hydrogen industry?
No need to sell it. We have the solar resource, we have the low sovereign risk, we have the proximity to Asia.

2. How could governments support the cost competitiveness of Australia’s hydrogen exports?

How could governments support the cost competitiveness of Australia’s hydrogen exports?
Invest in Australian development of $2/kg hydrogen. Only that will make us cost competitive.

The technology exists, it needs to be brought across the middle TRLs. What are you waiting for?

3. What could governments do to encourage commercial offtake agreements for export?

What could governments do to encourage commercial offtake agreements for export?
Again, there'll be no need because all we need to do is make cheap hydrogen. Then the industry will expand rapidly to meet all local and export demand. Start now and it will all be there in 10 years. Why Australia hasn't started developing the technology to commercial level is beyond me. It would be great to hear the reasons

4. How do we balance our global competitiveness with ensuring all Australians benefit when considering the collection of government revenues from hydrogen exports?

How do we balance our global competitiveness with ensuring all Australians benefit when considering the collection of government revenues from hydrogen exports?
That comes down to cheap hydrogen of course, and the appropriate tax regime around it.

The revenues will come hand in hand with a massive jobs expansion.

5. What can (or should) be done to ensure an appropriate balance between export and domestic demand?

What can (or should) be done to ensure an appropriate balance between export and domestic demand?
Scale production up to a level that allows for both.

6. How ambitious is the target of fulfilling 50% of Japan and Korea’s hydrogen imports by 2030?

How ambitious is the target of fulfilling 50% of Japan and Korea’s hydrogen imports by 2030?
Not too ambitious, provided Australia starts the process NOW, not in three years after fluffing around and arguing. NOW.

Issue 9: Hydrogen for industrial users

1. Hydrogen as a chemical feedstock

Hydrogen as a chemical feedstock
Check what Nippon-Sumitomo is doing. They have hydrogen strategies and other SDG strategies.

Solar thermal for industrial heat is coming, and should be used.

2. Hydrogen for industrial heat

Hydrogen for industrial heat
Solar thermal will be cost competitive when scaled up. See the solar alumina project being led by the University of Adelaide that Alcoa is involved in for industrial heat

3. Supplying clean hydrogen for industrial users

Supplying clean hydrogen for industrial users
Whyalla, Olympic Dam, Port Augusta in SA
The Pilbara and Goldfields of WA have great solar resources

CCS won't be an issue if CO2 can be captured and converted into fuel. We should be using C02 capture to convert to fuels with catalysts

It is simply madness to place our hopes on CCS in underground aquifers. The world doesn't have the time, and decades of trials have shown the process to be way too slow and we can't keep going !

6. Role for governments in supporting a transition to clean hydrogen

Role for governments in supporting a transition to clean hydrogen
More funding to bring technologies across the middle TRLs!

ARENA has done way too little, and is ineffectual really. How have they helped hydrogen get happening, and what realistically have they got in the pipeline for accelerating?

The SA Government is trying, but their funded projects are around electrolysis, so won't get beyond demonstration before they won't be economic