According to the recently published report State of Hydrogen 2022, hydrogen power, the fuel of the future that is intended to support a significant portion of Australia’s and the world’s green fuel supply, is still just a pipe dream.
While these ideas are becoming increasingly antique, the amount of taxpayer money the federal government is investing on hydrogen is not quaint. Large businesses are always going “cap in hand” in search of “public fund handouts.”
Over the past three years, state governments have announced $4.6 billion in “specific” assistance for hydrogen and $8.1 billion in “eligible” support for hydrogen. The federal government has promised $27.1 billion in “eligible” funding for hydrogen and $1.6 billion in “specific” support for hydrogen.
In comparison to Labor’s $27.1 billion in “eligible” funding, the previous Coalition government pledged the majority of the specific help, or around $1.3 billion. In addition to supporting “new sectors” other than hydrogen, including batteries, this number may also be used.
Just 4% of all projects planned globally are currently being built; a major factor in this is a lack of infrastructure for delivering hydrogen to customers. There are numerous infrastructure issues. Since it is so explosive and flammable, hydrogen must be kept at very low temperatures.
Because of this, virtually few current methods of storage or pipeline transportation are appropriate. For instance, you cannot simply pour pure hydrogen into an LNG tank or a gas pipeline. The issues with the environment are also not that straightforward.
The “exotic” “rare earths” needed to construct electric and hydrogen vehicles
The holy grail of “green hydrogen” must be produced by electrolysis, which requires renewable energy (splitting water into hydrogen and oxygen using an electrical current). Hence, in addition to needing renewable energy (which includes wind farms and solar panels that take up ocean and land space and must eventually be decommissioned and disposed of), you also need renewable energy that is already available.
The State of Hydrogen 2022 report states that 106 projects are presently under construction in Australia, so the time to explore these issues is right now rather than later when $27 billion in taxpayer money and significant environmental harm could be involved.
Australia needs to move swiftly
A new report warns that Australia must act quickly or risk falling behind in the race to become a superpower in renewable energy. As a result, the federal government is increasing its investment in green hydrogen and low-emissions steel with $50 million in research and development funding to help advance the technologies.
For two funding rounds that will support research and development for green hydrogen and low-emission iron and steel, ARENA has announced $50 million. The yearly State of Hydrogen report notes that Australia is well positioned to play a significant role in the global green hydrogen industry due to its renewable energy potential but cautions that in order for Australia to compete internationally, it is urgently necessary to speed up priority pilot projects and the establishment of hydrogen hubs.
The Department of Climate Change, Energy, the Environment and Water produced a 92-page research that examines the history of Australia’s hydrogen business, how it compares to global growth, and the future of the sector there.
According to the report, the regional economy is expanding significantly, and roughly 40% of all declared global hydrogen projects are located in Australia. In Australia, more than 100 “clean” hydrogen projects were announced in 2022, more than twice as many as in 2021.
The potential investment in the Australian project pipeline is estimated to be up to $300 billion (USD 203.5 billion), however the research points out that most of the announced projects in this pipeline have not yet received final investment decisions.
According to the paper, Australia will need to speed up the implementation of the early initiatives listed in the National Hydrogen Strategy, which was unveiled in 2019, if it wants to be a global leader in the hydrogen industry by 2030.
The Australian Renewable Energy Agency (ARENA) has announced $50 million for two funding rounds focusing on green hydrogen and low-emission iron and steel innovation. This was followed by the publication of the Status of Hydrogen study. Each funding round will receive $25 million, according to ARENA, with grants for successful candidates estimated to range between $500,000 and $5 million.
Expressions of interest are due on 1 June 2023 for the financing rounds for iron and steel R&D as well as green hydrogen.
