Australia sees cost as key challenge for hydrogen

  • Market: Hydrogen
  • 10/12/21

The Australian federal government sees three main barriers to the development of the country's hydrogen strategy, including building demand for the fuel and its derivatives, achieving low-cost production at scale and reducing delivery costs, according to Canberra's first progress report on its hydrogen strategy launched in 2019.

The federal government and all of the country's six state government each have outlined respective hydrogen plans as part of the energy transition from fossil fuels to lower greenhouse gas (GHG) intensive fuels such as hydrogen. Australia is the world's largest exporter of LNG and the second-largest thermal coal supplier.

"Like any nascent industry there will be challenges, and it is to be expected that demand-side indicators have slower progress than the supply side. It will take time to lower costs and to build export supply chains," Australian energy minister Angus Taylor said in the State of Hydrogen 2021 report.

Widespread global adoption of clean hydrogen will require sustained effort to offset the three biggest barriers facing industry globally, not just in Australia, including building demand, achieving low-cost hydrogen production at scale and reducing delivery costs.

Australian governments are next focusing on how to build up Australia's demand for hydrogen products, with the strategy laying out the pathway to achieve its vision.

The private sector has committed more than A$1.6bn ($1.14bn) of investment in hydrogen ventures in Australia, with public sector investment reaching $1.27bn in June 2021, the report said. Project announcements indicate scale could reach over 100MW by 2025.

The cost of producing clean hydrogen in Australia in 2025 is expected to be between A$2.30-5/kg, depending on the production method from around A$5/kg currently. In 2030 it will cost an estimated A$2-4/kg, the report said. The main cost drivers are capital costs and electricity costs. Renewable hydrogen production costs could fall below A$2/kg after 2030 if electrolysers and renewable energy become cheap enough, it said.

The average size of operating electrolysers around the world was approximately 1.1MW last year, the report said. But in early 2021 the 20MW Air Liquide Plant in Canada started operation with a four-module polymer electrolyte membrane electrolyser. Australia's largest operating electrolyser is the 1.25MW project at Hydrogen Park in South Australia. The Australian government has funded three electrolyser projects of 10MW each, which are expected to be operational in the near future.

Australian government future priorities include helping to drive down the cost of hydrogen production towards the A$2/kg goal and continuing to engage internationally to build export relationships, the report said.


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Germany eyes geographical split in new H2Global round

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London, 12 June (Argus) — The German government could disburse more than €3.5bn in support of renewable hydrogen production projects globally in a second round of the H2Global mechanism, according to a consultation document. The country's economy and climate protection ministry is surveying industry participants on the proposed design and criteria for a second round of the scheme that is intended to bolster the ramp-up of global renewable hydrogen production. It committed €900mn for the scheme's first round and previously set aside more than €3.5bn for future auctions without specifying how the funds would be allocated, or across how many auctions. The consultation document suggests the full amount could be made available in a single round. The government's envisaged design shows financial support split across six lots ( see table ). Two would be for a 'vector open' category, which would entail final delivery of renewable hydrogen with suppliers free to decide which transport vector to use. This could allow for deliveries by pipeline, or for seaborne transport by vectors such as ammonia, liquid hydrogen or liquid organic hydrogen carriers (LOHCs). If transport vectors are used, suppliers would be responsible for converting the supply back to gaseous hydrogen. One of these lots — which would probably include a €300mn funding contribution from the Netherlands — would be open for projects anywhere in the world, and one would be specifically for European projects. The first round was open only to projects outside the EU. The four other slots are referred to as 'product open' and would be available to deliveries of renewable hydrogen or derivatives, such as ammonia, e-methanol, synthetic methane or sustainable aviation fuels (SAF). These are split by projects in four geographical regions. Delivery for all lots would be to points of sale in Germany or the Netherlands. The H2Global scheme aims to close the gap between the costs of production and the price that customers are willing to pay. Specialised entity Hintco will buy renewable hydrogen and/or derivatives through 10-year contracts with suppliers and sell the products through one-year contracts , with government funds to cover the expected price difference. The consultation mentions a 2026-36 timeframe. This could refer to the envisaged 10-year delivery period, although 2026 would be a highly ambitious start date for deliveries given the mechanism is targeting projects that are yet to be developed. The first round, split into specific lots for ammonia, e-methanol and e-SAF, was concluded in early 2023. Winners have yet to be announced. Interested participants can submit responses to the consultation until 22 July, after which the design will be finalised. By Pamela Machado Proposed lots for H2Global second round Region Type of lot Budget range (in €mn)* Europe Vector open 600 - 1100 Global Vector open 600† North America Product open 300 - 600 Asia Product open 300 - 600 Africa Product open 300 - 600 South America & Oceania Product open 300 - 600 *total budget allocated would not exceed €3.531bn; † of which Germany's contribution will be €300mn, with the rest likely to come from the Dutch government - Germany's economic affairs and climate protection ministry Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Australia’s Queensland to pump $17bn into renewables


12/06/24
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12/06/24

Australia’s Queensland to pump $17bn into renewables

Sydney, 12 June (Argus) — Australia's Queensland has allocated new spending on energy projects, including pumped hydropower and transmission schemes, as part of its state budget for the 2024-25 fiscal year to 30 June. The state government, currently led by the Labor party, will spend A$26bn ($17bn) during the next four years as part of its Queensland Energy and Jobs Plan to wean the coal-dependent state off thermal power sources, budget papers published on 11 June said. An initial A$8.686bn will be delivered in 2024-25 by state government-owned energy businesses including projects for renewables, grid-scale batteries, gas, pumped hydropower, energy storage and the state's planned transmission SuperGrid . The SuperGrid, Copperstring transmission project in the state's northwest and renewable energy zone infrastructure will receive A$8.5bn over the next four years. Another A$16.5bn goes to renewable energy and storage projects, including the planned Borumba and Burdekin-Pioneer pumped hydropower energy storage . Some A$500mn will be spent on distribution network storage, including a local network battery plan, with A$192mn going to transmission grid operator Powerlink's planned training centres in Townsville and Gladstone cities. Another A$4mn will go to an assessment of potential sources of naturally occurring hydrogen in the state, which is also aiming to develop a green hydrogen sector . Queensland is aiming to end its state-owned power utilities' reliance on coal-fired electricity by 2035 . The government this year set emissions reduction targets of 30pc below 2005 levels by 2030, 75pc by 2035 and zero by 2050 under theClean Economy Jobs Act, as national debate continues about Australia's intermediate targets under the UN's Paris climate accord. Queenslanders on 26 October get to choose a government for the next four years, although energy policy is unlikely to figure in the election campaign. The centre-right Liberal-National opposition backed Labor's legislated emissions reduction goals, for which there is no penalty in case of a failure to meet targets. By Tom Major Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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EU parliament to favour e-fuels, hydrogen: EPP lawmaker


10/06/24
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10/06/24

EU parliament to favour e-fuels, hydrogen: EPP lawmaker

Brussels, 10 June (Argus) — EU parliament to favour e-fuels, hydrogen: EPP lawmaker The new EU parliament will be more pragmatic in 2024-2029, favour continuation of the internal combustion engine (ICE) beyond 2035 as well as more flexible rules for low-carbon hydrogen, e-fuels, biofuels, and other CO2-neutral fuels, outgoing member of the European Parliament Markus Pieper told Argus . The centre-right European People's Party (EPP) MEP was the key lawmaker behind the EU's revised renewable energy directive. Will the next parliament favour renewable liquid fuels in spite of provisions for an ICE phase-out? For me, the end of the internal combustion engine (ICE) has not been decided yet. The next European Parliament will likely have a majority supporting the continuation of ICE beyond 2035. This would provide planning security for investments in innovation and facilities for e-fuels, biofuels, and other CO2-neutral fuels, including power-to-x (P2X) fuels. Instead of an outright ban on combustion engines, there should be a phase-out of fossil fuels, enabling us to achieve climate targets more quickly and cost-effectively, without overloading power grids. We need to start working on a clear legal framework today. The blending of new fuels must be standardised and regulated. Do you see the EU parliament favouring greater flexibility in the conditions for renewable hydrogen? Yes, we have a review clause in the renewable energy directive, whereby the European Commission shall submit a report to council [of ministers] and parliament by 1 July 2028. If this assessment indicates that we cannot achieve targets for green hydrogen in industry due to a lack of supply, then we must adjust the definition of green hydrogen. If we do not adapt, the industry may relocate to regions with fewer environmental regulations. We need to be flexible in our legislation and ready to adjust rules due to worldwide competition. How can a new EU parliament improve on existing legislation for 2030 climate and energy goals? The magic word is technological openness. We need to get the best out of all energy resources. Additionally, we need to invest significantly more in the energy transition, especially in the expansion of cross-border green electricity projects. The new European Parliament will likely be more pragmatic and realistic in its energy goals. Does the EU need to rethink the 2040 goals? There's no need to rethink the 2040 CO2 reduction target of 90pc [compared with 1990 levels]. But we need to rethink how to achieve goals and keep a close eye on China and India. Europe must constantly redefine and adapt legislation as necessary. One crucial step is reaching new trade arrangements [to balance higher EU climate standards for domestic industry than global competitors]. We have to be more realistic. Do you think EU 2030 targets for hydrogen are too ambitious? Yes, the target for green hydrogen to represent 42pc of hydrogen used by industry in 2030 is too ambitious from today's point of view. And I currently don't see the capacity to produce enough hydrogen in Europe. As for imports, non-EU producers often do not meet the same standards for producing green hydrogen. This means we'll need to adapt our definition of green hydrogen and consider more low-carbon solutions. The Paris Climate Agreement remains our primary goal. If we can achieve these goals with low-carbon hydrogen, why not? Still, it remains possible to meet the 2030 green hydrogen targets if we adapt the definition. By Dafydd ab Iago Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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EU not on track for green shipping fuel target: Study


03/06/24
News
03/06/24

EU not on track for green shipping fuel target: Study

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Green steel, SAF likely first H2 buyers in UAE: Masdar


31/05/24
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31/05/24

Green steel, SAF likely first H2 buyers in UAE: Masdar

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