National Hydrogen Strategy Issues Papers

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Robert Dickinson

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Hydricity Systems

Issue 2: Attracting hydrogen investment

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?
I didn't see much (but might have missed it) regarding the building of mutual trust among a broad diversity of investors.

e.g.1: FCEVs are complementary much more than competitive with EVs -- there will always be applications where EV range extension is most effectively provided c/o onboard clean fuel. Hence there's no fundamental reason for a given investor to "back" EVs but be averse to investing in FCEVs.

e.g.2: AGIG's precedent is encouraging but they're a carrier not a fuel supplier. And even in the context of pure hydrogen as a fuel, there will be opportunities for existing suppliers to adapt their businesses accordingly (not just blending as with, for example, Woodside et al). i.e.: Hydrogen fuel industry entry into the existing fuel markets need not necessarily be "disruptive" per se.

Issue 4: Guarantees of origin

1. When should Australia aim to have a guarantee of origin in place? Why is this timing important?

When should Australia aim to have a guarantee of origin in place? Why is this timing important?
asap: because

1) the longer its put off the more difficult, complex and controversial its likely to become.

2) its clearly not a trivial task (c.f. the duration of the CertifHy project to date), so starting late could well end up delivering an outcome that is "too little too late".

2) there is obviously a large existing domestic market for "brown hydrogen" produced from CH4 ( SMR ). Presumably most of this market will remain unchanged / unaffected for several years to come at least. But the portion of consumers in this market who choose to switch to clean hydrogen for whatever reason, will need to assure themselves, as to the origin in order to avoid paying for something that they're not getting. Similarly, the stakeholders of these consumers will need similar assurances, in a timeliness is of the essence manner.

2. What would be the best initial scope for a guarantee of origin? Why? Should there be two separate schemes for international and domestic requirements?

What would be the best initial scope for a guarantee of origin? Why? Should there be two separate schemes for international and domestic requirements?
Domestic:

On the one hand, keep it simple. On the other hand, computing such parameters as inherited CO2-e from NEM-connected electrolysis each 5minutes is not "rocket science".

International:

Let the international markets decide.

Re: One or two schemes ? Domestic can and should be much easier and faster to deploy: especially regarding achieving agreement among all stakeholders. The development of a domestic scheme can be guided in part by the needs of one or more international markets. But a domestic scheme need not beholden to the needs of a particular foreign market (current or future).

4. Should a guarantee of origin have an eligibility threshold? If yes, what should it be based on?

Should a guarantee of origin have an eligibility threshold? If yes, what should it be based on?
A specific number is "arguably" arbitrary.

A sequence of intervals might be more productive and useful.

(c.f. Octane rating in petrol ?? ... but this is a bad example because the products are petro-chemically different).

This would avoid, for example, the cost to a given supplier of blending hydrogen from 2 or more sources just to deliver a product that is below some numeric inherited CO2-e threshold.

Issue 6: Hydrogen in the gas network

2. What is the potential to have a test project of 100% hydrogen use in a small regional location and where?

What is the potential to have a test project of 100% hydrogen use in a small regional location and where?
Potential: very high (hard to imagine why not, as long as the community is on board)

Location: co-located with high local wind and modest (at least) solar potential, and high winter demand for heating and no existing CNG infrastructure (North West coast of Tasmania? )

Issue 7: Hydrogen to support electricity systems

1. How can hydrogen production best be integrated with current electricity systems (for instance, should large-scale hydrogen production be connected to current electricity systems)? Are there barriers or risks to integration that need be addressed in the Strategy?

How can hydrogen production best be integrated with current electricity systems (for instance, should large-scale hydrogen production be connected to current electricity systems)? Are there barriers or risks to integration that need be addressed in the Strategy?
Please see "Additional upload" document

2. What, if any, future legislative, regulatory and market reforms are needed to ensure hydrogen supports, rather than hinders, electricity system operation and delivers benefits for consumers (for example by reducing demand during high price events)? What is the timeframe, and priority, for these changes?

What, if any, future legislative, regulatory and market reforms are needed to ensure hydrogen supports, rather than hinders, electricity system operation and delivers benefits for consumers (for example by reducing demand during high price events)? What is the timeframe, and priority, for these changes?
Please see "Additional upload" document

3. Do current market frameworks incentivise the potential value of hydrogen to support electricity systems? What initiatives or changes required?

Do current market frameworks incentivise the potential value of hydrogen to support electricity systems? What initiatives or changes required?
Please see "Additional upload" document

4. Do current market frameworks allow for sector coupling and interactions between different markets that may result from hydrogen production (such as the interplay between gas, electricity, and transport sectors)? If not, what changes are required?

Do current market frameworks allow for sector coupling and interactions between different markets that may result from hydrogen production (such as the interplay between gas, electricity, and transport sectors)? If not, what changes are required?
Please see "Additional upload" document

5. What factors should be considered when selecting pilot and demonstration projects? How can government best support pilots and demonstrations?

What factors should be considered when selecting pilot and demonstration projects? How can government best support pilots and demonstrations?
Please see "Additional upload" document

Issue 8: Hydrogen for transport

4. How can governments and industry reduce the financial, technology and operational risks of purchasing new technology vehicles?

How can governments and industry reduce the financial, technology and operational risks of purchasing new technology vehicles?
If the risk is excessive then perhaps governments should not be investing either ?

Let EV and FCEV markets decide ?

And in the latter case, if FCEV market geography is decided in part by private investment in hydrogen refuelling infrastructure locations, then ... well, ... so be it.

There are plenty of other domestic and international markets for Australia's potential clean hydrogen.