National Hydrogen Strategy Issues Papers

Given the diversity of technologies involved in the range of different hydrogen value chains, there is no definitive scale target that is applicable across the board. For a detailed answer which included realistic technoeconomic models, a proper research project would need to be undertaken to evaluate scale efficiencies and cost barriers.

However, in CSIRO’s National Hydrogen Roadmap, some consideration was given to this issue, as it is critical to the concept of ‘market activation’ in the emerging hydrogen space. For a hydrogen system based on electrolysis, the critical size is approximately 100 MW; and as mentioned, for the rest of the value chain it is more complex. A scale of 100MW is the first big step in cost reduction with most other technologies needing to be bigger than this to achieve significant impacts.

The complexity of this discussion increases as one considers the role of staged adoption, in particular in the gas pipeline and ammonia sectors. Here, existing, full-scale infrastructure can be used at (often a small) percentage of its capacity with hydrogen. In the case of natural gas injection, this has immediate and cost effective impacts on carbon emissions at very little relative cost, and there are few capital barriers to ongoing expansion.

There is an important role of R&D at scale in this discussion, in particular in applications relying on new technologies or new integrations of existing technologies. Demonstration of new value chains is a key aspect of cost reduction, leading to technology de-risking as well as investor confidence. CSIRO is currently developing a large-scale research initiative to address the lack of industrial-scale RD&D in the hydrogen sector, which is being designed to be consistent with, and complementary to, related industry and government initiatives.

There is a need for infrastructure and coordinated efforts to provide a platform to assist technology development and pilot scale demonstration at the stage where relevant industry partners can begin to take prototype and proof-of-concept technologies to a scale that supports investment in appropriate design, manufacturing and applications initiatives. CSIRO is seeking to develop partnerships across the value chain to support the development of appropriate ‘test-beds’ or ‘plug-and-play' development hubs to reduce the costs and risks (safety, emissions and by-products management etc) in conducting these pre-commercial pilot and demonstration activities.

Bruce S, Temminghoff M, Hayward J, Schmidt E, Munnings C, Palfreyman D, Hartley P (2018) National Hydrogen Roadmap. CSIRO, Australia. https://www.csiro.au/~/media/Do-Business/Files/Futures/18-00314_EN_NationalHydrogenRoadmap_WEB_180823.pdf?la=en&hash=36839EEC2DE1BC38DC738F5AAE7B40895F3E15F4

Partnering at an early stage between existing industries and new technology development initiatives is important to ensure that the technology options that are developed are compatible with existing industries and infrastructure in a practical way. For example, alignment with existing ammonia manufacturers is expected to be important in ensuring new ammonia production technologies (particularly those seeking to develop renewable hydrogen pathways) are able to leverage of existing business and market infrastructure to provide both a pathway to large scale impact as well as ensuring the new technologies have the necessary ‘industry champions’ to support investment, development and deployment at realistic industrial scale. The development of pilot scale technology development hubs such as those described in 1) above is intended to facilitate this scale of cooperation and coordination.

CSIRO’s National Hydrogen Roadmap made the point that the hydrogen industry in Australia (and more broadly) is no longer only constrained by technology development and now requires market activation activities. R&D is, of course, going to have an important role to play as new pathways emerge and cost reductions continue; however, larger-scale, industrially-focussed initiatives are now needed to help the industry enter (and successfully traverse) the ‘valley of death’ - the technology stage that lies between small scale research and commercialisation, where costs are high but success is needed in order to support commercial scale deployment.

This needs collaboration and coordination at all levels of research, industry, and government.

CSIRO is developing a plan for increased investment in hydrogen activities, with a clear focus on supporting industrial scale collaborations to demonstrate key value chains and de-risk technology development and deployment. CSIRO is currently scoping a large scale program of work to support increased research activity in hydrogen technologies, and also focus strongly on establishing collaborative RD&D infrastructure and facilities. These hubs will allow for significant leveraging of government, industry, and research funding, and provide the mechanism to allow the global demand for renewable hydrogen to have strong domestic impact: hydrogen for transport in Australia, for example, is almost entirely limited by the availability of the required infrastructure.

This reflects CSIRO’s role in the broader innovation chain (which probably extends further across ‘Applied R&D’ and into ‘Market Demonstration’ than that depicted in Figure 2 of Paper 2).

Bruce S, Temminghoff M, Hayward J, Schmidt E, Munnings C, Palfreyman D, Hartley P (2018) National Hydrogen Roadmap. CSIRO, Australia. https://www.csiro.au/~/media/Do-Business/Files/Futures/18-00314_EN_NationalHydrogenRoadmap_WEB_180823.pdf?la=en&hash=36839EEC2DE1BC38DC738F5AAE7B40895F3E15F4

Australia is already seen as a prime candidate for partnering and investing in the emerging hydrogen market. This is built on the traditional relationship we have with key hydrogen markets such as Japan, where our geography, political stability, and resource richness were the foundation of a relationship that started with coal and more recently grew to include natural gas. This continues to be the case in the emerging hydrogen industry, bolstered by our record demonstrated in setting up our LNG export industry.

Australia’s recent track record of technology and strategic leadership in the hydrogen area is also attractive. CSIRO’s National Hydrogen Roadmap raised the profile of the sector, and along with high profile demonstrations of key hydrogen technologies with our industrial partners, catalysed a shift in the national approach to hydrogen. Hydrogen features in policy development, and we are now seeing federal and state strategies for hydrogen which provides some context and clarity on the role of hydrogen in a range of industry sectors.

Our industries are also showing that there is real commercial appetite for change. The gas industry has emerged as a real ‘change agent’, with strategies and early demonstration projects to showcase the role their infrastructure and experience has to play. We are also seeing companies not traditionally aligned with the energy sector recognise the opportunities that hydrogen offer: ammonia production companies are now partnering in technology development and demonstration activities, and mining companies are diversifying to include renewable energy export as a core component of their strategy.

CSIRO is engaging internationally with government, research and industry sectors to ensure appropriate synergies and alignments are identified and coordinated so that Australia’s role in the value chain (which may differ in the various technology sectors) is aligned with the capabilities and strengths of the key international participants in the hydrogen energy markets and associated technology development initiatives. Joint research efforts with key international groups, as well as close engagement of technology development projects with relevant industry developers, users and investors is important to ensure that the technologies and systems that Australia develops to support its engagement in international markets and value chains, are appropriately positioned to align with the strengths and needs of international developments.

Bruce S, Temminghoff M, Hayward J, Schmidt E, Munnings C, Palfreyman D, Hartley P (2018) National Hydrogen Roadmap. CSIRO, Australia. https://www.csiro.au/~/media/Do-Business/Files/Futures/18-00314_EN_NationalHydrogenRoadmap_WEB_180823.pdf?la=en&hash=36839EEC2DE1BC38DC738F5AAE7B40895F3E15F4

Through modelling, the CSIRO National Hydrogen Roadmap identified material cost drivers and laid out recommendations that would reduce costs across the hydrogen value chain. Beyond driving cost reductions brought on by scale, the Roadmap highlighted the role of research, development and demonstration (RD&D) across the value chain to support cost competitiveness.

This includes RD&D that drives efficiencies in production through greater process intensification, improving materials and continuing to progress new novel and disruptive production methods. In storage and distribution there is a need for RD&D to continue scaling and optimising hydrogen export pathways such as ammonia and hydrogen liquefaction and developing emerging technologies such as direct ammonia synthesis that by-passes the traditional Haber Bosch process. Finally, in utilisation there is a need to apply RD&D to support market activation and develop cost effective technologies to convert carriers to hydrogen or leverage them for direct use.

CSIRO’s current Hydrogen Research, Development and Demonstration report aims to articulate the RD&D opportunities and priorities in greater detail. An early theme from the project and one identified in the Attracting hydrogen investment Issue Paper was the need for Australia traverse the innovation ‘valley of death’.

For RD&D specifically, this requires investment in industry-aligned hydrogen research facilities or hubs that provide pathways for technology development, scale-up and uptake and attract. Investment and input should be part of a broader collaboration between research, industry and governments (domestic and global). In addition to helping de-risk emerging technologies that would drive cost advantages, the research facilities or hubs should focus on demonstration of the value chain, support and stimulate local industry.

Bruce S, Temminghoff M, Hayward J, Schmidt E, Munnings C, Palfreyman D, Hartley P (2018) National Hydrogen Roadmap. CSIRO, Australia. https://www.csiro.au/~/media/Do-Business/Files/Futures/18-00314_EN_NationalHydrogenRoadmap_WEB_180823.pdf?la=en&hash=36839EEC2DE1BC38DC738F5AAE7B40895F3E15F4

As discussed in the UQ work and in more recent work undertaken by CSIRO, the acceptance of hydrogen is largely reliant on its ‘green’ credentials. CSIRO’s experience in communicating its hydrogen work is that there are perceptions in the broader community that investment in hydrogen is ‘pointless since hydrogen comes from gas and coal’ or similar, along with the perception of ‘propping up fossil industries’. Being able to demonstrate how hydrogen is enabling the energy transition is important in this context.

The importance of a guarantee of origin goes further than social acceptance, however – the key driver for a transition to hydrogen energy systems is the potential it offers for significant global decarbonisation in a practical manner. Without the means to track and document the carbon intensity of hydrogen production, this goal will be harder to achieve, and almost certainly be less impactful.

The immaturity of the global hydrogen export market means that there is no precedent to inform the development of an Australian guarantee of origin. It is clear, though, that customers are unlikely to accept hydrogen that does not offer measurable reductions in CO2 emissions.

The published strategies of Japan and Korea do not specify the ‘greenness’ (carbon intensity) of the hydrogen they seek to import. However, the Japanese government seems to be taking a fairly pragmatic approach, recognising that strict requirements of carbon intensity or renewability risks hampering the development of the industry and impeding its long-term impacts. There seem to be early goals for the “CO2 -free” nature of the hydrogen to be defined by a 60% reduction compared with the use of natural gas (at the point of production), with a gradual and managed transition to an approach based more on life cycle considerations.

The majority of commercial electrolysis systems utilise potable water with an internal water purification system that removes key contaminants before they enter the electrolysis cell. The electrolysis process requires a minimum of 9kg of water per 1kg of hydrogen. Assuming relatively poor water utilisation this would equate to roughly 120 billion litres of water to produce 10 million tonnes of hydrogen, roughly equivalent to the current Western Australian LNG output. In order to produce this amount of hydrogen a desalination plant of equivalent size to the Victorian desalination plant would need to be built. There are a number of plants of this size and larger in the world in operation today so the risk associated with water production are considered low in terms of financial risk and or technical risk.

The key environmental risks posed by water recycling and desalination plants are basically energy usage and process waste management.

For desalination plants, the waste brine stream is often discharged to marine outfalls in Australia. This can impact on sensitive marine ecosystems. Inland desalination brine management can be much trickier, as often it is discharged to evaporation ponds of variable efficacy, or simply discharged to water courses. There is a range of impacts on those ecosystems from the introduction of such waste streams.

For recycled water plants, a waste sludge is produced – typically this is a biosolid which may contain pathogens as well as heavy metals. Effective management of biosolids is a challenge, as agricultural and other beneficial uses are becoming more regulated.

A key point in finding a balance between environmental, agricultural, community and hydrogen production uses will lie in the values of the community and their representatives. Having a social licence to operate from the community is a key feature of many of these industries/situations where different needs have to be factored – we have considered these aspects in response to subsequent questions on this paper.

Paper 5 outlines the accepted models of community engagement: share, consult, deliberate and collaborate. These models can be adapted to be both fit-for-purpose and responsive to the information needs and sensitivities of diverse communities, including regional and remote communities. Broad options for embedding social science in community engagement are outlined in CSIRO’s review of the key issues likely to characterise the public’s response to the introduction of hydrogen energy in Australia (Carr-Cornish et al., 2019). These approaches can be further adapted to:
• Across the population to understand early attitudes, the experiences that form them and how they change over time in ways that inform early communication about the industry and/or specific projects.
• Identify the perspectives of communities where developments are proposed and support the co-design of engagement and consultation for demonstration and trial initiatives.
• Identify the decisions that lead to adoption, in collaboration with developers of technologies and potential adoptees.

CSIRO has worked with diverse communities across Australia to understand their needs during transitions in the energy system. This science has demonstrated that as part of engagement it is critical to develop strategies for defining and realising co-benefits from new energy projects. This relies on understanding local stakeholders’ expectations and opportunities for identifying the co-benefits that are of greatest importance to the community.

CSIRO’s research has included identifying the drivers of acceptance of large-scale energy technologies such as:
• carbon capture and storage, geothermal, wind (Carr-Cornish et al., 2019; Hall et al., 2015);
• the perceptions of contested sources such as unconventional gas (Lacey et al., 2019); and
• the co-benefits of pilot projects with vulnerable members of society, including those in remote communities (Carr-Cornish et al., 2017).
A recent example is that CSIRO is currently working with the Department of Environment and Energy to design and implement early stakeholder engagement processes across three basins that are prospective for new tight and shale gas industries in Australia (Lacey et al., 2018).

This capability also includes world leading methods for measuring and modelling community perspectives to inform our understanding of the social licence of companies and industries (Moffat et al., 2018), and what constitutes responsible innovation for new industries in Australia (Ashworth et al., 2019).

Ashworth P, Lacey J, Sehic S, Dowd AM (2019) Exploring the value proposition for RRI in Australia. Journal of responsible innovation https://doi.org/10.1080/23299460.2019.1603571
Carr-Cornish S, Lamb K, Rodriquez M, Gardner J (2019) Social science for the hydrogen energy future. CSIRO, Australia.
Carr-Cornish S, Romanach L, Huddleston-Holmes C (2019) An application of social science to inform the stakeholder engagement of an emerging geothermal industry in Australia. In: Manzella A, Allansdottir A & Pellizzone A (ed.) Geothermal Energy and Society. Switzerland: Springer, pp. 71–90.
Carr-Cornish S, Gardner J, Lovasz T, Lindsay S, Rodriguez M, Sparkes B (2017) Low income energy efficiency program report: an evaluation of the outcomes of trials with low income and vulnerable households about energy productivity. CSIRO, Australia.
Hall N, Lacey J, Carr-Cornish S, Dowd AM (2015) Social licence to operate: understanding how a concept has been translated into practice in energy industries. Journal of Cleaner Production 86, 301–310.
Lacey J, Malakar Y, Swirepik A, Stacey A, Dann R (2018) Best Practice Guidelines for Geological & Bioregional Assessment Basin User Panels: Principles for design and performance. CSIRO, Australia.
Moffat K, Lacey J, Boughen N, Carr-Cornish S, Rodriguez M (2018) Chapter 3: Understanding the social acceptance of mining. In: Lodhia S (ed.) Mining and Sustainable Development: Current Issues. Oxon: Routledge, pp. 27–44.

CSIRO has undertaken scientific research on community perceptions of the mining, extractives and renewable energy sectors for over a decade (e.g. Carr-Cornish et al., 2019; Hall et al., 2015). This data has consistently shown that broad community acceptance tends to be mediated by how much trust communities have in those industries. In turn, this trust tends to be built on how fairly people feel treated, how fairly benefits are shared, and their level of confidence in how these industries are governed (Moffat et al., 2014; 2017).

This research also consistently points to the role of adopting a systematic and evidence-based approach to understanding community attitudes. In this way, community perceptions and expectations can become a critical input into co-designing how communities will be engaged, impacts managed, and co-benefits realised. Approaching social data as an input into decision-making processes can also increase transparency, the line of sight to social performance and responsiveness of projects companies (Moffat et al., 2019).

There is opportunity is to draw on these lessons from established industries and apply them to a new hydrogen industry (Carr-Cornish et al., 2019). Because while internationally, hydrogen technology developments have generally been well received and positive responses have initially been reported by Australians, these responses are not always universally shared or consistent over time.

For example, in assessing citizen attitudes to mining technologies in Australia, CSIRO found that citizens tend to be more accepting of established or familiar technologies, whereas for emerging or unfamiliar technologies, the type of knowledge held and how it is formed plays a key role in shaping perceptions and the level of acceptance (Lacey et al., 2019). Specifically, when awareness is relatively low in relation to new technologies, opposition also tends to be low. As awareness of new technologies increases, opposition can begin to form. Identifying effective types of early and continuous information and engagement that will build community confidence from the outset is a high priority for establishing and maintaining community support.

CSIRO’s review of the key issues likely to characterise the public’s response to the introduction of hydrogen energy in Australia identifies the need to extend existing research as hydrogen energy is relatively novel for the Australian population, and there is limited research in the Australian context about the range of technologies and developments that are anticipated (Carr-Cornish et al., 2019).

There is clear potential to develop engagement approaches that utilise existing knowledge of what constitutes a social licence in extractive industries and to extend this knowledge specifically to hydrogen energy developments and applications in Australia.

Carr-Cornish S, Lamb K, Rodriquez M, Gardner J (2019) Social science for the hydrogen energy future. CSIRO, Australia.
Carr-Cornish S, Romanach L, Huddleston-Holmes C (2019) An application of social science to inform the stakeholder engagement of an emerging geothermal industry in Australia. In: Manzella A, Allansdottir A & Pellizzone A (ed.) Geothermal Energy and Society. Switzerland: Springer, pp. 71–90.
Hall N, Lacey J, Carr-Cornish S, Dowd AM (2015) Social licence to operate: understanding how a concept has been translated into practice in energy industries. Journal of Cleaner Production 86, 301–310.
Lacey J, Malakar Y, McCrea R, Moffat K (2019) Public perceptions of established and emerging mining technologies in Australia. Resources Policy 62, 125-135
Moffat K, Zhang A, Boughen N (2014) Australian attitudes toward mining: Citizen Survey – 2014 Results. CSIRO, Australia.
Moffat K, Pert P, McCrea R, Boughen N, Rodriguez M, Lacey J (2017) Australian attitudes toward mining: Citizen Survey – 2017 Results. CSIRO, Australia.

It is eminently feasible to convert a region of Australia to operate on a hydrogen gas pipe network in the same manner as many regions operate with natural gas or LPG networks. Globally there are a number of hydrogen gas pipelines in operation. There are currently no significant hydrogen pipelines within Australia, although the expertise to construct and operate such infrastructure should reside within the ammonia production and oil refining industry. In order to maximise the value of such a project consideration could be given to including both a high-pressure and low-pressure distribution network. This would allow for the demonstration of interstate (high-pressure) and local (low-pressure) pipe networks.

In terms of demonstration projects, many of the components that would be required for operation of a region with pure hydrogen are at a relatively mature level including fuel cells, electrolysers, hydrogen refuelling stations and hydrogen boilers for producing heat. The creation of a large demonstration project has the potential to bring many of these technologies to Australia, greatly increasing the size of the market for hydrogen and significantly reducing the cost of these technologies within Australia.

In order to maximise the learnings and benefits of such a project it would be necessary to consider taking a whole of system approach integrating the use of hydrogen with a wide array of emerging technologies such as hydrogen refuelling stations, electric vehicle charging stations, renewable energy and battery storage systems. There are a number of examples globally where this type of approach has been shown to be successful but perhaps most relevant was the Fujisawasset sustainable smart town. This town was opened in Japan in 2014 and demonstrated how many emerging technologies could be intelligently deployed, including domestic hydrogen fuel cells operated off natural gas.

A similar integrated approach to a community or region within Australia could have a wide array of benefits including the development of new approaches to managing grid stability, developing domestic supply chain and manufacturing capability, and accelerating the adoption of sustainable technologies. This approach is critical as in the majority of instances significant savings can be realised if combinations of technologies are utilised in combination. Although in many cases hydrogen can be used as a direct drop in replacement for natural gas it seldom makes economic sense to use this approach with 100% pure hydrogen.

In terms of technical detail, a large demonstration project could focus on maximising co-benefits of hydrogen pipelines and sector coupling between electrical, gas and transport networks. There are a wide array of potential projects, however, an integrated project that could demonstrate the following:
1. The ability of hydrogen pipe networks to store large amounts of energy over long time periods
2. The ability to integrate power and heat generation at a domestic scale via ene-farm type fuel cell systems
3. The demonstration of how hydrogen fuelling infrastructure could operate with a hydrogen pipeline
4. Demonstration of electrolysis for load management, in particular for controlling ramp rate of renewable energy plants and/or how electrolysis plants could be used to assist with seasonal various in output of renewable energy generators.
5. The demonstration of integration and control of a wide array of distributed energy resources including micro-fuel cells, electrolysers, solar PV, electric vehicle charging, household demand management and vehicle to grid technologies (both hydrogen FCV and BEV)

This would allow:
1. An understanding of how hydrogen could be used to meet the significant seasonal variation of energy demand within Australia
2. Increase the value of hydrogen beyond a low value application such as heat whilst allowing for increase efficiency through the utilisation of the higher heating value of hydrogen in condensing boiler systems
3. A demonstration of how low cost of hydrogen refuelling infrastructure could be realised in Australia and opening the potential for hydrogen to be more cost competitive with other forms of zero emission transport.
4. For an understanding of how electrolysis could be combined with other parts of the electricity network for greater stability and more effective use of energy resources.
5. For an understanding of how emerging technologies could be combined in a cost-effective way to allow comparable quality of life within Australia under a low or zero emission scenario.

In terms of location, there are a number of regions in Australia that would allow for demonstration of this group of technologies effectively:
• A remote community or edge of grid application may offer a good demonstration of sector coupling and offer the most cost-effective demonstration as hydrogen would be displacing LPG and diesel.
• Co-location of hydrogen production in area’s with grid constraints and excess renewable energy production would offer a good example of how hydrogen production and pipe networks could offer a low-cost energy transport and storage solution.
• Construction of a new housing estate and community in a fast growing suburban area could be used to demonstrated how hydrogen production could be used in combination with other technologies to decarbonise transport, heat and electricity production.
• Replacement of natural gas in a region such as a rural town or area that is exclusively supplied by a single pipeline e.g. Tasmania could be used to demonstrate a full chain of technologies and provide significant energy independence to a region.

CSIRO’s research on community perceptions of the extractive and energy industries has consistently shown the confidence citizens have in how these industries are governed shapes their level of trust in and acceptance of these industries. This relates to perceptions of how effectively these industries are perceived to be regulated and managed, and how confident citizens feel that government or another body would hold these industries to account if something should go wrong.

Combined, government, industry and other stakeholders can create the conditions that are conducive to acceptance of an emerging hydrogen energy industry and related technologies. Specific initiatives include collaborating to transparently define industry codes, standards and practices that are world leading in terms of responsible management of Australia’s emerging hydrogen industry and technologies.

Industry associations and their members have a critical role to play in implementing industry best standards, agreed communication and stakeholder engagement protocols, setting expectations and developing clear crisis protocols for incident or emergency response with the relevant stakeholders. Such standards and codes should be strongly endorsed by government and community.

Government may be able to support or incentivise the adoption of such standards to raise overall industry performance but clear roles and responsibilities (and messaging) from industry and government needs to be established from the outset to ensure confidence in regulating authorities and bodies.

Research institutions could support the development of such standards by working with industry to incorporate community perspectives as part of a more systematic and legitimate dialogue with communities. For example, CSIRO has worked with the International Council on Mining & Metals (ICMM) to develop a standard for best practice stakeholder engagement based on our empirical research that was adopted by the ICMM member companies, the top tier global mining companies of the world (Moffat et al., 2015). CSIRO has also facilitated workshops with regulators from around the globe to understand the role of these standards in the acceptance of clean energy, in a public-private roundtable at the sixth Clean Energy Ministerial, 2015 hosted in Merida, Mexico.

Moffat K, Lacey J, Carr-Cornish S, Zhang A, Boughen N (2015) Stakeholder Research Toolkit: Best practice guidelines for
measuring and monitoring stakeholder relationships in the mining and metals industry resources sectors. London, International Council on Mining and Metals (ICMM).

Electrolysers can be used to manage a number of issues within Australia’s electricity networks. This can include:
• Demand management at a local level such as a region that is grid constrained but with high renewable energy penetration
• Demand management at a macro level, in a similar manner to an aluminium smelter, electrolysers can be load shed to provide capacity during high demand periods or hydrogen production can be reduced if there is a significant shortfall of energy production such as a shortage of natural gas or failure of a major grid interconnector.
• Hydrogen production can also be used to balance seasonal variation i.e. higher production can occur during periods of the year when electricity demand is low.
• Electrolysers can also be used to provide a number of grid services such as Frequency Control Ancillary Services (FCAS) and ramp control for large renewable generators.

There are few engineering risks to the integration of large scale electrolysis plants within Australian networks. From an electrical perspective, electrolysis plants are very similar to Zinc refineries, aluminium smelters and chlor-alkali plants. All of which have been safely operated within Australian grid networks for many years. Most of these facilities already operate in a manner to support the Australia’s networks a service that they are often rewarded for via long term contracts with low electricity rates.

Many of the risks associated with large scale hydrogen production within Australia are commercial and relate to the low margin and long term nature of the investment required to construct a hydrogen production facility. Low cost financing of projects guaranteed off take agreements, policy certainty around the use of hydrogen in natural gas pipe networks, greater valuing being place on grid stability and a policy framework that would provide clarity on the uptake of hydrogen consuming technologies in the automotive, domestic gas use or industrial sector would significantly reduce risk for investors in this sector.

The National Hydrogen Roadmap prepared by CSIRO identified 10 industrial sectors and applications where hydrogen would be well suited. This included passenger vehicles, buses, trucks, remote area power supplies, industrial feedstocks, grid firming services, export, heat and synthetic fuels. In general, 3 main technical barriers were identified as scale, cost and infrastructure. Cost and scale linked as the most effective way to reduce cost would be to increase the scale of hydrogen production. This is particularly relevant for project selection as small scale applications such as small scale transport trials or remote area power applications where only small amounts of hydrogen are required scale would have to be achieve by having many of these projects. In the case of large applications such as export or hydrogen as a natural gas substitute scale is far easier to achieve. The challenges around infrastructure are more complex as any early infrastructure investments are likely to be uneconomic until the market develops. This would suggest that target infrastructure investment when critical mass can be achieve early would be preferable to isolated or uncoordinated deployment of technologies in isolation.

In terms of the most effective strategy for government to address these barriers there is little consensus. However, the assessment of projects on their ability to reduce cost, increase scale or provide additional infrastructure would be prudent. Combinations of technologies in demonstration programs would add to the complexity of delivery but would lead to more far reaching outcomes. In particular sector coupling between electricity networks, gas networks (both domestic and export) and transport networks should be encouraged. Use of government owned vehicle fleets, buildings and networks is viewed by many as a potential method of building scale and activating the market. Less direct methods include low cost finance and funding via grant bodies such as ARENA.

Bruce S, Temminghoff M, Hayward J, Schmidt E, Munnings C, Palfreyman D, Hartley P (2018) National Hydrogen Roadmap. CSIRO, Australia. https://www.csiro.au/~/media/Do-Business/Files/Futures/18-00314_EN_NationalHydrogenRoadmap_WEB_180823.pdf?la=en&hash=36839EEC2DE1BC38DC738F5AAE7B40895F3E15F4

In terms of demonstrations within the transport sector, there are aspects of the technology that would need to be demonstrated, one is the vehicles themselves and then second is the refuelling infrastructure. Internationally, there are currently a number of commercially available hydrogen vehicles including cars and busses. There are fewer examples of heavy vehicles such as trucks or ships / ferries. For commercial vehicles there are commercial refuelling solutions available.

In terms of showcasing technology, vehicles that are used frequently by the public are attractive targets. Taxi fleets, commercial fleets, government fleets, car sharing schemes and bus trials are all good targets for demonstration projects, particularly if these projects can be linked to the construction of public refuelling infrastructure.

Steelmaking is traditionally a difficult field to decarbonise, due largely to the dual role coke has in the blast furnace as a reductant as well as physical structure to hold the blast furnace bed up, giving it strength and porosity (and not being too reactive). Replacing coke with alternative materials that are effective and affordable is a challenge. There are some areas of active R&D looking to use waste biomass materials as coke replacements, either from woody biomass or plastics.

The best options for reducing emissions from metals production more widely are to use renewable energy for the significant heat input required, and to seek simpler, less carbon-intensive reductants. For the first option, sourcing energy from renewable sources and transporting that via electricity or hydrogen saves most of the emissions from the process – hence hydroelectricity-powered ‘green’ aluminium reduction. There are also options being explored that integrate Concentrated Solar Thermal (CST) heat with industrial processes such as metals production.

For the second, using electrochemical routes or non-carbon reductants makes a difference, so that oxygen or other more useful compounds are produced other than CO2. At the very last resort, it may be possible to run processes so that CO is produced instead of CO2, and the CO can then be captured and used for simple chemical synthesis.

Concentrated Solar Thermal (CST) as well as bioenergy are both opportunities for decreasing emissions of industrial heat use while increasing the uptake of renewable energy.

CST focusses solar energy onto a receiver, which is used to heat a thermal storage medium. The applications for this heat are many and varied, and range from power generation to any number of industrial processes. Once CST has been harnessed and stored, much of the challenge is to get the heat to the process where it is needed, in a form that is useful. There is, however, considerable work being done in Australia on this topic, mainly to address the challenge of cost -- much of it as part of the Australian Solar Thermal Research Institute (ASTRI).

Bioenergy is also a means by which industrial heat can be decarbonised. Biogas from anaerobic digestion plants is a mixture of CO2 and CH4, and is well suited to direct combustion for heat and power. Upgrading biogas can remove the CO2 and generate a stream of biomethane – a direct natural gas substitute. As the costs of AD technologies continue to decrease we are seeing more and more deployment of these systems.

Biomass combustion and gasification is also a means by which industrial gas use can be replaced with renewable energy. The use of waste biomass (often timber mill residues) in boilers to provide heat and steam (and sometimes power) can offset the use of gas or coal. This is a cost effective approach (particularly when replacing expensive natural gas) which is quite widespread. Biomass gasification generates syngas, which can be combusted for heat and power (usually in reciprocating engines). In some applications it can be used as a natural gas replacement. This approach can be less cost effective.

Hydrogen supply for industrial users is already established and there are a number of small scale steam methane and electrolysis systems available commercially to supply hydrogen for industrial users. Larger scale users (such as oil refineries and ammonia plants) typically operate steam methane reformers onsite.

It is possible to supply “clean” hydrogen to these industrial users however there is little motivation to do this and the higher cost of low emission hydrogen makes this unattractive. There have been a number of limited examples of where large hydrogen users have begun to invest in electrolysis and renewable energy sources to substitute traditional sources of hydrogen both in Australia (Yarra) and internationally (mainly in the EU). The formation of a hydrogen pipeline network supplied from a central source in a region where there are a number of heavy user of hydrogen could potentially allow for the development of a large low emission hydrogen supply chain. However, it is unclear if there is a region within Australia where a large enough demand for hydrogen exists to warrant this kind of investment. The other potential alternative use of hydrogen in the Australian context would be to use hydrogen from renewable energy sources to produce synthetic fuels with methane and methanol being particularly attractive. The CO2 for these materials could be sourced from a number of different locations including LNG processing facilities, bio-gas facilities and water treatment works however these fuels would be significantly more expensive than traditional fossil sources.