Hydrogen hubs — all eyes on Australia

GHD Pty Ltd

By Malcolm Rushin, Australian Future Energy Leader, and Kylee Unwin, Global Strategy & Markets Leader, at GHD
Wednesday, 06 July, 2022

Hydrogen hubs — all eyes on Australia

There is a sense of urgency to achieve hydrogen production at scale because it is considered an important part of most pathways to achieving global net zero emissions. The International Energy Agency has forecast we will require more than >500 Mta of hydrogen production globally by 2050 to achieve emissions targets. This is equivalent to more than three times the current global LNG industry and a daunting task in such a short period of time.

This is compounded by the crisis in Ukraine, which is changing the economics of hydrogen and making it increasingly important as an alternative fuel. In this future energy economy, Europe, South Korea and Japan are shaping up to become net hydrogen importers while the Americas, the Middle East, Africa and Australia are in a strong position to become hydrogen exporters.

Hydrogen hubs have emerged as arrangements and mechanisms to drive the viability of producing hydrogen at scale.

Following a significant amount of work to set the right policy and funding conditions, the concepts of hydrogen clusters, hydrogen hubs and even hydrogen valleys have materialised quickly in Australia — despite the pandemic.

It is now accepted that hydrogen hubs will be the catalyst that will unlock wider economic benefits of hydrogen activities in an identified region. Hydrogen hubs concentrate activity locally and enable infrastructure to be shared, scale to be increased and costs to be reduced. They also help coordinate and maximise engagement of local communities. They have the potential to facilitate industry investment and drive regional growth, allowing us to scale up faster.

Australia is not alone, with the US Government seeking to develop at least four hydrogen hubs. In Australia, hydrogen technology clusters exist in every state and territory.

Through our involvement in several hubs across Australia, including Port Bonython in South Australia, Bell Bay in Tasmania and the Middle Arm Sustainable Precinct in the Northern Territory, we have identified several common elements that will help accelerate the development of hydrogen hubs:

Industrial ecologies: This concept is based on the notion of enabling an existing industrial precinct to transition to a future community utilising future energy and has the potential to de-risk developments. It consists of three elements:

  1. Blending or changing the energy feedstock; for example, shifting from gas power to blended or converting energy-intensive processes to use green hydrogen.
  2. Reskilling human capital to adapt to the changes necessary to utilise the change in technology and feedstock.
  3. Creating local markets for the green products manufactured; for example, transport refuelling, green ammonia as a fertiliser or green steel for construction. This ecology can then grow and develop into an export hub as production increases.

Investor capital: While public sector approvals and investment are critical, hydrogen hubs will be capital-intensive and require significant investment from the private sector. It is important to bring private investors on the journey and get their buy-in early. Overlaying commercial models to inform decision-making and investment pathways has proved highly beneficial. For example, the modelling we have undertaken for projects such as the Geraldton Export Scale Renewable Investment Project tells us that scale is critical for export markets. Emerging thinking regarding the potential of local hydrogen ecosystems is worth exploring; however, most investment decisions will rely on a scalable proposition for viability.

Stakeholder engagement: While there is widespread acknowledgement and even support for hydrogen as a critical clean-burning energy source, large-scale infrastructure required for hydrogen hubs has broad implications for both the environment and the community. Our recent experience has shown that a facilitated, collaborative approach can be valuable in extracting stakeholder perspectives upfront and unlocking insights early.

Clear and efficient approval pathways: As we charter new territory, having defined approval pathways in place will facilitate the expediency with which these projects can evolve. The planning phase should not be underestimated in its ability to determine success.

Although bankability is not there yet, we need to capitalise on the progress and momentum generated. Creating reliable technology and productivity of electrolysers to meet their anticipated performance will help build confidence in long-term demand.

Australia has all the key attributes to be a major producer of clean energy servicing both the domestic and international market, particularly those countries with less natural advantage. We have ample space, energy sources such as sun and wind, extensive coast lines, low population density and high technology know-how. As a collective we can unlock more of the industry potential faster and set a benchmark for the global stage.

Image credit: ©stock.adobe.com/au/malp

Related Articles

Dirty dancing across a new energy landscape

The real-time balancing of electricity generation (supply) and demand is like a dynamic dance and...

Digitising Australia's buildings is key to tackling net zero

Businesses around the world are continuing to focus on net zero, and building construction and...

Ausgrid steps closer to net zero using 'blue gas' switchgear

Ausgrid is using Siemens' blue gas insulated (GIS) medium-voltage switchgear, which uses...

  • All content Copyright © 2024 Westwick-Farrow Pty Ltd