Australia’s renewable energy is primarily derived from wind power and solar photovoltaics. Both sources are weather-dependent and are subject to change.
Michael Bielinski, the chief executive officer of Siemens Energy in Australia, explains, “You produce energy at times when you may not need it, and when you do need it, you produce nothing.” “Large lithium-ion batteries may intermittently fix this problem for 24 to 48 hours.” However, a solution for medium- to long-term energy storage is required, and this is where hydrogen comes in. Hydrogen is discussed because it can be used to store variable renewable electricity and decarbonize sectors that cannot be quickly electrified.”
The most prevalent element in the universe is hydrogen. In contrast to the fossil fuels on which the developed world has relied since the 1880s, however, it is not found in the earth. Currently, the majority of hydrogen gas is derived from fossil fuels, but a tiny proportion is created through the electrolysis of water in electrolyzers. If these electrolyzers employ renewable electricity, the resulting carbon-free hydrogen is referred to as “green hydrogen.” Therefore, the renewable energy utilized in the process is “stored” in the hydrogen.
The global excitement surrounding hydrogen has proven difficult to ignore in recent years. An economy based on hydrogen rather than fossil fuels is one of the pillars of the Green Deal of the European Union. And Australia and Germany have signed the Hydrogen Accord to expedite the growth of the hydrogen sector.
Eliminating regulatory impediments is unquestionably one of the most important factors in fostering the growth of the hydrogen economy; the other is fostering demand. Bielinski contends that the moment has come for the commercial application of hydrogen solutions. “If we can achieve scale in hydrogen production and reduce the unit cost of hydrogen, then it becomes interesting for everyone. Without a question, creating green hydrogen today is an expensive endeavor. Our objective is to reduce the price per kilogram to $2 AUD,” he explains. This is the aim set by Australia’s National Hydrogen Strategy for 2030.
“The scenario is currently chicken-and-egg,” he says. “Investment in hydrogen infrastructure is required, and demand is necessary. We know that by 2050, a large amount of our energy will come from hydrogen, but the question is, “How do we get there? How do we pull ourselves up by the bootstraps?” Siemens Energy recently commissioned for its client Australian Gas Infrastructure Group a 1.25-megawatt electrolyser (AGIG).
AGIG’s chief executive, Craig de Laine, explains that hydrogen is the key to his company’s shift to a low-carbon future, citing the lowering cost of renewable electricity. “The second factor in making green hydrogen production more cost-effective is the declining capital costs of electrolysers as demand increases. The third factor is maintaining the electrolyzer’s operation. Each kilogram of hydrogen produced will be pricey if it is only used for a few hours per day. Therefore, you require conveniently available, inexpensive renewable energy, preferably with solar and wind complementing one another.”
Hydrogen blending is the initial stage
Tonsley, an Adelaide suburb, was the site of Australia’s first commercial green hydrogen application, a collaboration between AGIG and Siemens Energy. Hydrogen Park South Australia (HyP SA) was officially inaugurated in May 2021 as an entry-level hydrogen project with a 1.25 megawatt Proton Exchange Membrane electrolyzer that blends H2 into the regional gas network. More than 700 clients in Mitchell Park, an Adelaide suburb, currently receive a gas blend containing 5% hydrogen. HyP SA has a maximum yearly capacity of 175 tonnes of H2; 1 tonne of green hydrogen has the ability to avoid more than 7 tonnes of CO2-e from natural gas burning.
De Laine states, “This is the beauty of combining a small amount of green hydrogen.” “Australia’s gas distribution network is now almost entirely made of plastic and can accept up to 100 percent hydrogen without modification – no problem.” We are aware that the meters and equipment in the homes of consumers can accept at least 10 percent renewable hydrogen. Our selling point is that the user experience will remain same.”
And according to de Laine, it solves the chicken-and-egg dilemma: “The mixing is a wonderful anchor use case because you can increase demand without requiring customers to do anything differently. Then, if you have green hydrogen production, you can expand to 100% hydrogen networks and other carbon-intensive industries such as heavy transport, and you can even generate green steel, green aluminum, and green ammonia.”
Bielinski concurs that this is the best course of action: “And then you continue by constructing industrial-scale hydrogen generation plants, which will reduce the unit cost.” The next generation will be between 10 and 20 megawatts. If Australia is serious about fast establishing a hydrogen economy, the sector will shortly commit to deploying hundreds of megawatt-scale electrolysers. Although this represents an investment of hundreds of millions of dollars, economies of scale reduce the cost each kilogram of green hydrogen produced.
A future worldwide hydrogen exporter?
Australia earns billions of dollars from exporting coal and is the largest exporter of liquefied natural gas in the world (LNG). Hydrogen has the potential to be the world’s green, clean energy carrier, and could be exported exactly like LNG is today. “Export is the true prize for Australia. Hydrogen will be the new zero-carbon export industry that can be equally as significant, as Australia’s solar and wind resources are almost limitless, according to de Laine. To match the capacity of LNG, however, hundreds of gigawatts of electrolyser capacity must be installed. “We are currently working on projects ranging from 10 to 50 megawatts, or up to 40 times the scale of the HyP SA. We need one gigawatt of installed capacity to realize our goal of having all of our networks on a 10 percent mix by 2030.
Michael Bielinski, a solutions partner at Siemens Energy, is acutely aware of the magnitude of the work at hand: “I wouldn’t understate the magnitude of the challenge, but I think we’re getting clearer and clearer on what we need to do to reach net zero – and that incorporates a hydrogen economy.”
To launch this hydrogen economy, a mix of persuasion, technology, and economics is required. Currently, AGIG’s innovative initiative in Adelaide’s suburbs appears to meet all requirements.
