Australia would require a remarkable 812GW of installed solar and wind capacity by 2050 to access the global green hydrogen market and meet its own net-zero ambitions, according to a recent analysis by Bloomberg New Energy Finance (BNEF).
The Economic Transition Scenario, the Net Zero Scenario, and the Hydrogen Export Scenario are the three decarbonization pathways for Australia that are examined in the paper.
The annual New Energy Outlook for Australia now includes a new scenario called the Hydrogen Export Scenario (HES), which projects Australia being a green hydrogen superpower with net zero emissions by 2050. According to the analysis, Australia could supply 5.7% (28 million metric tons annually) of the world’s hydrogen demand in 2050 using green hydrogen and renewable energy while still achieving its national net-zero goals.
However, achieving this lofty objective will not be easy. Australia’s power demand would have to increase by 169% in order to meet the hydrogen export target, as opposed to just achieving net zero. By 2050, this equates to 1,963 terawatt-hours, a seven-fold increase from today. The analysis indicates that by 2050, wind and solar capacity nationwide will need to expand by a factor of 21 to 812 gigawatts in order to cost-effectively meet this demand. These renewable energy facilities would primarily use the power they produce to electrolyze water to create hydrogen.
A significant build-out of renewable energy would cost $592 billion in total to finance, according to the BNEF, between 2022 and 2050, which is 2.5 times the amount required to achieve net zero ambitions alone. New wind capacity would receive about $369 billion, or 62%, of this investment, with solar projects receiving the remaining amounts.
The paper makes a suggestion on the geographic distribution of new renewable capacity: it would primarily be situated in remote areas of the nation, making use of available land and reducing grid constraints. The report, however, does not discuss the issue of land use for renewable energy projects being accepted by society.
The paper emphasizes Australia’s distinct advantage in terms of its abundance of land and high-quality resources, despite the fact that the country’s part of the global green hydrogen market may appear to be limited. Australia has the potential to develop into a global hub for the supply of green materials and energy. Scaling up the necessary infrastructure and funding for such an undertaking, however, comes with a big risk.
The Net Zero Scenario (NZS) from BNEF emphasizes the significant investment necessary to meet the Paris-aligned climate target by 2050, even without the hydrogen export component. The national energy system must receive an investment of $1.9 trillion from the NZS, or $68 billion annually. By 2050, it plans to install 102GW more wind and solar power than the Economic Transition Scenario. To further decarbonize the electricity system, around 74GW of dispatchable capacity, including batteries, pumped hydro, hydrogen-fired gas plants, and gas plants with carbon capture and storage, would be required.
The attainment of net zero emissions depends in large part on the transportation sector. According to BNEF’s modeling, all new cars sold in Australia by 2033 will have to be electric vehicles (EVs). Less than 5% of the market are already EVs, which emphasizes the infrastructure and financial issues that need to be resolved.
Australia has a tremendous opportunity to take part in international low-carbon energy systems thanks to its pursuit of green hydrogen and the expansion of renewable energy that goes along with it. To achieve these goals, though, infrastructure, financial, land use, and sectoral transitions issues must be resolved. Australia can establish itself as a pioneer in the switch to green energy with the appropriate policies and methods.