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Australia's Newest 'Clean Energy' Source

Australia, one of the world’s top LNG exporters, has a bright future as a hydrogen economy. This is the conclusion of a brand new road map from the Commonwealth Scientific and Industrial Research Organization, a federal agency that has, with the road map, joined a growing interest in hydrogen as a renewable alternative to fossil fuels.

CSIRO believes hydrogen would greatly help Australia achieve its Paris Agreement targets—cutting emissions by 26-28 percent from 2005 levels by 2030—and also solve a problem with domestic natural gas supply that has caused a price spike in eastern Australia. Clean hydrogen, the agency says, can do all that and more.

The enthusiasm around hydrogen is understandable: it is relatively easy to store and transport in liquid form and it could be used for fueling vehicles, electricity generation, heating, and in a range of industrial applications. There’s been quite a bit of noise around hydrogen as a fuel for vehicles recently, including drones, but as CSIRO notes in its report, hydrogen’s appeal lies in its incredible versatility, which is indeed comparable with the versatility of crude oil and gas.

For all these advantages, there are, of course, matching challenges. For starters, CSIRO is talking specifically about so-called clean hydrogen: hydrogen produced without the participation of natural gas, which is currently the cheapest way to produce hydrogen. It could become cleaner if it is paired with carbon capture and storage, though, the agency allows.

Clean hydrogen, on the other hand, is produced through electrolysis, but this process has yet to become cheaper, which CSIRO expects will happen at some point with the right motivation, including government support and available investment funds. The technology, CSIRO notes, is maturing.

Storage and transportation are also not without problems. Compression, for example, involves storing the element in its gas form, which requires vast storage facilities if Australia is to produce it at the scale that CSIRO promotes. The alternative, storage and transportation in liquid form, is costlier, the agency notes—both for pure liquefied hydrogen and for hydrogen mixed with other molecules and then separated from them.

Speaking of transportation, it shares a challenge with the potential use of hydrogen as a car fuel: lack of infrastructure. Pipelines, more specifically, could be successfully used to transport hydrogen from place to place, but they—and fueling stations—have yet to be built.

Interestingly enough, CSIRO also sees export opportunities for Australia in the hydrogen department. The reason this is interesting is that most research on hydrogen focuses on making it competitive with fossil fuels in local markets in light of the cost and infrastructure challenges around the fuel. But, CSIRO says, hydrogen demand in China, Japan, Singapore and South Korea is on the rise, and may reach US$6.96 billion (A$9.5 billion) by 2030.

That could make up a big part of the motivation needed to start a hydrogen industry in Australia as far as businesses are concerned. Yet the government will need to lend a hand, too, with policies encouraging investments in hydrogen. Even with legislative support, it looks like all the ambitious goals suggested by CSIRO will take a while. It was only last month that the Australian Renewable Energy Agency announced the allocation of US$1.1 million to set up the first clean hydrogen innovation hub in the country. A lot of innovation will need to be done before the optimum conditions for a hydrogen economy are achieved.

By Irina Slav for Oilprice.com

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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