Western Australia consults on hydrogen consumption

State-funded modeling indicates that the production cost of green hydrogen is unlikely to reach $2 per kilogram before 2040, and consultation on a target for Western Australian power production from green hydrogen has begun.

When put into practice, this would mandate that “electricity retailers and maybe major users [buy] a percentage of their electricity from hydrogen-fueled generation.” By 2023, the target’s design should be complete and ready to be implemented into the state’s primary grid, the South-West Interconnected System (SWIS).

The goal advances the state’s intention, expressed in its renewable hydrogen plan, to emerge as a significant producer, exporter, and consumer of renewable hydrogen. Its major goal is to stimulate business growth and create demand for renewable hydrogen produced in Western Australia.

Energy Policy WA, which is seeking input on the implementation of a Renewable Hydrogen Electricity Generation Certificate program, released the consultation document on Thursday. By producing certificates that can be traded based on the amount of power produced by renewable hydrogen, this would help develop a market for renewable hydrogen.

The consultation period ends on November 10, 2022, and a forum will be held online on October 25.

The cost modeling provided by consulting firm ACIL Allen is included in the consultation paper. It predicts that the median production cost of renewable hydrogen will be $4.71 per kilogram in 2030 and $3.52 per kilogram in 2040.

At the time of the scheme’s anticipated start in 2024, the median production cost is predicted to be $6.60 per kilogram. These rates do not cover shipping or storage fees.

Hypothetical Renewable Hydrogen Targets of 1%, 5%, and 10% of power generation were taken into consideration to determine the magnitude of hydrogen production. These scenarios call for the generation of 16, 80, and 131 tonnes of hydrogen per day by the financial year 2030, respectively. This would increase to 25, 124, and approximately 260 tonnes of hydrogen per day by the fiscal year 2050, respectively.

Commercial-scale renewable hydrogen projects are not currently in operation in the state. But numerous green hydrogen projects are being worked on all around the state.

Included in this is the Asian Renewable Energy Hub in the Pilbara, which will employ 26 GW of renewable energy to produce 4,400 tonnes of green hydrogen each day, or a maximum of 1.6 million tonnes per year. This plant produces products for export.

The consultation study also models how meeting the three speculative hydrogen production objectives will increase demand for electrolysers.