National Hydrogen Strategy Issues Papers

One of the key factors that I see in regards to scaling green hydrogen is the ability for the country/state to generate cheap renewable energy and convert the excess energy it generates into hydrogen as a stored energy source. In Australia's case the is only 1 state that is already at this stage and that is Tasmania. About 72% of its energy comes from Hydro and it is in a good position to consider increasing its storage capacity to generate greater power generation and using electrolysers to manufacture hydrogen for energy storage & export. Around 75% of the cost of generating hydrogen using electrolysers is the cost of electricity. If you have a low cost of electricity the excess can be converted to hydrogen and exported. Tasmania should also consider the building of additional wind farms on the wild west coast and feed this energy into its grid. Currently ~10% of its energy comes from wind but its contribution could be greater.

The green hydrogen generated could be shipped out of Burnie or Devenport that are already set-up as ports. Some capital works could have them hydrogen-ready quickly. Using banks of electroysers near the ports the hydrogen could be produced very close to the ports minimising transport costs to get product to the shipping port.

Other states (predominantly eastern states) would benefit from further investment in renewable projects to drive the power cost curve downwards. The Snowy Hydro 2 puts NSW in a good position to convert the excess energy into green hydrogen and quickly take advantage of a new export opportunity. Again having banks of hydrogen electrolysers near existing ports (Newcastle, Wollongong).

Victoria has a steady pipeline of wind energy projects (1.9 GW under construction, 1.7 GW approved but not operational & 635 MW planning permits under way) to contribute thru the Hastings Hydrogen Liquefication facility under construction for the brown coal to hydrogen project. This latter project is producing hydrogen and emitting carbon dioxide and must be used in conjunction with carbon-capture-storage (CCS).

Western Australian company Woodside is already positioning itself to provide hydrogen to market. The state already has a 1,500 km long natural gas pipeline from Dampier to Bunbury providing an energy network to quickly generate blue hydrogen with CCS anywhere along this line that is the most economic. Whilst the eastern states also has an extensive natural gas network, industry cannot get enough to meet its own requirements so this cannot be utilised to generate hydrogen.

Regional port locations should be targeted to maximise the jobs in these areas and leverage off the existing developed facilities.

Discussions with companies that already manage LNG and transfer their knowledge to the new hydrogen work-force e.g. Woodside, Shell, Linde, Ballard Power.

A National approach should be implemented to scale up hydrogen. Australia needs to not only look after international markets but also its own. It is imperative Australia also benefit from transitioning to hydrogen for industry and we don't have the same debacle of gas shortage stifling investment and industry that create jobs and wealth in both regional and metropolitan areas.

To assist private investment in hydrogen production electrolysers, if imported, these assets should be duty exempt. If these "hydrogen-producing" assets are locally made, an R&D incentive of 150% would encourage new methods to manufacture suitable for our environment.

Sponsorship of university projects in renewables and hydrogen-producing components similar to QUT alternative catalyst material.

Policies to encourage the transport industry to make the change to hydrogen thru initially subsidising capital purchases of refuelling stations and encouraging multi-nationals to build networks for refuelling trucks, buses, cars and intrastate trains.

US (mainly California thru its state policies) & Europe have already started doing this and Australia should adopt those overseas policies that generated the most success. As local demand increases more private investment will follow.

The world appears to be in a low growth phase and returns to investors is low as countries slash their cash rates. To attract investment initially on projects, with forecast good returns, the government should underwrite these projects. Investment need not necessarily come from overseas.

Australia also has a 1.6 trillion dollar superannuation industry looking to obtain a return for their members funds. If these local superannuation funds committed some of their members funds to key infrastructure projects that would generate ongoing revenues for the funds members.

Encourage large metro councils to invest in hydrogen-powered public transport, particularly bus train and ferry, by allowing a longer time frame to pay back the hydrogen infrastructure cost. If this equipment is imported then the assets should initially be duty exempt.

Refer to my comments in item 2 above. If an overseas investor profits from investing Australia's infrastructure these profits will go offshore. Keep the opportunity and profits in Australia so all can benefit from jobs thru construction, operating and maintaining facilities. Long-term profit from on-going revenues generated by the infrastructure asset(s).

We are close to major markets in Asia, politically stable, well educated and trained workforce.

Thru allowing hydrogen producing equipment imported to be duty free.
Build infrastructure such as new or upgrading port facilities to allow a hydrogen export industry to flourish.

The government could start by transitioning its own business to hydrogen.
Politicians
Border Force,
ATO Staff,
Customs & Quarantine Officers

See my note in Q5 below

Set a percentage of hydrogen made locally must stay in the local market, say 70% Export and 30% domestic. If the businesses export market increases so should its domestic portion accordingly.

If the company does not want to sell domestically then it must add hydrogen infrastruture to the domestic market instead i.e. hydrogen refuelling stations, electrolysers, storage facilities, etc... to the value of 30% of its export parcel. In time this should reduce as Australia's domestic market strengthens.

If the business sells domestically more than 30% (or some other agreed percentage) exported then that is OK.

Very ambitious, but you need to have an ambitious target and be able to take the appropriate risks in infrastructure and processes in order to make it happen.

What is critical is the actual government support for the fledgling industry and hollow promises. Not all the heavy lifting should be done by business alone. Government stimulus thru sound policies and following thru is crucial.

Shell, BP, Linde, BOC, CSIRO, Toll, TNT, DHL, ITM Power, Nel, Ballard Power, Hexagon Composites & Hydrogenics

Federal - Offer a hydrogen rebate of 10% of the vehicle cost, allow vehicles imported to be initially be duty free until industry established
State - Significantly cheaper registration for hydrogen vehicles
Local - Preferential parking in city areas for hydrogen vehicles

There are 23,000+ hydrogen powered foklifts that have been operating in USA since 2009. Companies such as Walmart, DHL have been utilising this technology because it was more cost effective than battery technology. The safety record for the hours run is excellent.

Buses - less diesel buses and more hydrogen-powered buses = cleaner air. Time frame should be in 2-3 years when infrastructure is built to support green hydrogen on-site refuelling.

Passenger Ferries - As fuel cell technology improves and the ferries built in Europe prove their effectiveness (Scotland's Orkney Island Hydrogen Ferry planned for 2021) shipping should follow in 5-7 years.

Trucks/Trains/Ships - Having hydrogen refuelling stations in optimal locations around the country would encourage the use of hydrogen powered trucks/trains/ships. Timeframe for trucks & trains 3-5 years, shipping 5-7 years.

Hydrogen fuelled forklifts and ancillary vehicles - Now. Technology is already proven as being cost effective. Refuelling infrastructure is needed.

Capturing waste heat from industrial processes and converting this into energy would make these processes more energy efficient. Flue gases could be put thru a hot air engine and the hot air engine could drive a generator to charge a battery bank or small electrolyser to generate hydrogen from the waste heat.

These simple engines are low cost and would be a cheap way to capture waste heat energy and convert it into something more useful.

The oil refining industry has been utilising hydrogen in its process for many decades.