Why the interest in hydrogen?

21st March 2019 · John Soderbaum

ACIL Allen has a long history of work on hydrogen. In 2003 we prepared a report entitled the National Hydrogen Study. This report marked the period when hydrogen last enjoyed some attention in Australia.  However, Australia’s interest in hydrogen waned considerably in the years that followed.  But this all changed again in 2018 when COAG agreed to the Chief Scientist’s proposal that Australia should prepare a National Hydrogen Strategy.

We believe that increased strategic long-term thinking on energy is a good way to help ensure that the community and industry are well equipped to manage the decarbonisation of the Australian economy.  Indeed, developing a National Hydrogen Strategy was one of the recommendations of the National Hydrogen Study in 2003.

So why, after so many years, has there been a renewed upsurge in interest in hydrogen? There are several developments that have combined to cause governments to again focus their attention on hydrogen.  These include:

  • The growing urgency to address climate change by reducing greenhouse gas emissions. This is providing ‘demand push’ as zero emissions hydrogen is regarded as an important means of reducing emissions.
  • The large and growing investment in hydrogen end use technologies. This is creating ‘demand pull’ for hydrogen.
  • The significant investment in identifying reliable and sustainable hydrogen supply chains. Again, this is creating ‘demand push’.
  • All the above is occurring at a time when new technologies are being developed and deployed that can put downwards pressure on the cost of producing, storing, transporting and using hydrogen. This will in turn help to increase the commercial viability of hydrogen.

The emergence of the potential for Australia to export hydrogen has also been a significant development. Our 2018 report for ARENA (Opportunities for Australia from Hydrogen Exports) highlighted the opportunities for Australia to export hydrogen to many of the countries that currently import fossil fuels from us. Importantly, such exports could help to offset any decline in our conventional energy exports that may emerge as the world increasingly seeks to decarbonise energy production and use. Another report, the South Australian Green Hydrogen Study, concluded that not only were there opportunities to export niche products now, but that demand for hydrogen from Japan and South Korea could help create a significant new industry in South Australia. An industry that could leverage existing manufacturing, engineering and project delivery capabilities.

The Chief Scientist’s office recently released its first Discussion Paper as part of the process for developing the National Hydrogen Strategy.  The Discussion Paper has a list of eleven key policy questions that public feedback is sought on (submissions close on 28 March). However, this is only the first stage in the process.  There will be more consultations and further discussion papers released for stakeholder comment in coming months.

The National Hydrogen Strategy is likely to help drive the emergence of a new group of industries. At the same time, there may be another group of industries that will see their markets decline. New and existing firms would obviously prefer to be included in the first group. Those in the second group should be planning for how they will manage the transition to a lower carbon society.   We stand ready to assist our clients in either of these tasks and to support any contribution they wish to make to the preparation of Australia’s National Hydrogen Strategy.