We are all well aware of how exceptionally proficient Australia has been at exporting carbon-emitting fossil fuels to foreign markets. The trade has funded Australian coffers very handsomely for decades.
Our nation is blessed with vast reserves of black coal, brown coal and lately, gas. Peaks and troughs notwithstanding, they have always been in high demand in foreign markets. Owing to our brilliant skills at digging holes and packaging the spoils in enormous bulk carriers, it’s been easy money.
21st-century energy generation and distribution are now at the end of the beginning of a radical change.
Renewables are the now and the future, with renewables momentum building exponentially across the globe. The change, fortunately, is unstoppable.
Australian thermal coal exports (coal for power stations) were valued at $20.8 billion in 2017. Our LNG (gas) exports were valued at $23 billion in roughly the same period. These are big numbers, providing important national revenue via royalties, and broader, nation-building benefits, such as employment and support industries etc.
As renewables eventually take the lion’s share of global energy production, this will cause a downturn in Aussie commodities export earnings.
There will be an associated and significant industry trickle down, as supporting industry (and jobs) truncate in response to waning demand.
Can hydrogen exports take up the slack and replace the revenues of dwindling coal exports?
Will hydrogen diminish returns from our current and projected LNG cash cow, even though LNG export volumes are set to increase next year?
Is there a diverse future for hydrogen in global energy markets and can Australia act fast enough to capitalise on our potential to supply?
Let’s take a brief look at hydrogen.
The following paragraphs present an introduction to the where’s, why’s and who’s of hydrogen.
We’ll highlight the forecast potential benefits and touch on the problems associated with producing commercial export quantities of hydrogen.
When it comes to reducing carbon emissions, hydrogen has some very serious green credentials.
Hydrogen has zero emissions. The only byproduct of burning hydrogen is water and heat.
A good example of hydrogen’s green power is in the conversion of combustion engines to burn hydrogen.
Converted ICEs that run a mix of diesel and hydrogen reduce harmful carbon emissions by 70%. And that’s just current technology and a very small part of a much bigger hydrogen potential.
As Allan Finkle, Australia’s chief scientist says, “Hydrogen can heat our buildings, power our vehicles [replacing petrol and diesel] and supply our industrial processes.” It can also generate electricity.
Most importantly, indeed critically, hydrogen can become a totally renewable energy source, and it has zero carbon emissions.
To make the argument for hydrogen export even more compelling, there is already an eager hydrogen market, with strong demand coming from Japan, China, Singapore and South Korea.
These are big markets by themselves, but you can expect they won’t be the only interested buyers. It is forecast that hydrogen will be a $13.5 billion export by 2040. Provided we get it right, of course.
Given that the benefits appear to be profound, particularly under current climate demands and the carbon reduction imperative, why is hydrogen not the current biggest thing since sliced bread?
Why is hydrogen not currently an integral, indeed dominant force in global energy now?
You’re waiting for the catch, aren’t you? With hydrogen promising so much, at least on the surface, where is it?
There is a litany of energy problems across the globe that hydrogen would appear to solve, and all we see now are a few hydrogen cars that aren’t really selling.
Your suspicions are justified, there are problems. However, these problems are
far from insurmountable, given the right stimulus and advances in associated technologies.
The Problem with Hydrogen
Hydrogen, with its good mate helium, are the most abundant elements in the universe.
“How is that a problem?” we hear you ask. Given infinite abundance, wouldn’t that be a huge benefit?
One might think so, but unfortunately, we can’t just pluck hydrogen out of the atmosphere.
Before we can use hydrogen to get the kids to school, heat our stir-fries and run our steel mills, hydrogen needs to be extracted and processed. And there’s the rub.
The process using current technologies is cost prohibitive, rather toxic and generates plenty of carbon emissions.
There are currently two methods for creating commercial quantities of hydrogen.
Firstly, there is steam-methane reforming.
Secondly, there is electrolysis, which separates hydrogen and oxygen in water.
As you can imagine, with a word like “methane” in a process, carbon emissions are going to be significant - and they are.
Electrolysis offers little benefit as an alternative while we continue to use coal and gas as the backbone of our electricity generation.
Electrolysis not only uses prodigious amounts of electricity, it also uses a very expensive and toxic catalyst in the process.
Currently, the zero-emissions benefit of burning zero-emission hydrogen is negated by the vast amounts of carbon we would generate creating hydrogen in viable export quantity using present methods.
Further to this, storage and transportation also present a very tricky issue.
Hydrogen is very difficult to contain.
As it is so small, the smallest, lightest element in the universe, pumping it through current steel piping systems already in existence for LNG, presents significant leakage issues if piped alone.
Further to this, shipping bulk hydrogen in gas or liquid form also presents problems.
Don’t throw your hands up in despair, however. Help is on the way.
There are too many interested benefactors standing to earn fortunes from hydrogen.
There is little chance they will let mere toxins, costs, leaky pipes and carbon spoil a promising payday. Science and industry are now working together to solve these issues, and quickly.
Solving the Problems
Electricity And The Electrolysis Method
With the massive reduction in the cost of wind and solar power, the electrolysis method for creating hydrogen has a significant cost and carbon advantage. Electrolysis can be conducted using wind and solar power. It’s totally green and highly cost effective.
Currently, electrolysis requires the use of cadmium-based semiconductors in combination with expensive noble metals including platinum, iridium and ruthenium. It’s toxic and cost prohibitive.
Recent research has discovered that zinc selenium is a far less toxic and much more affordable catalyst material for the electrolysis process and can be used in place of current raw materials.
Problem solved. Effective hydrogen creation achieved without a hint of methane.
Initially, if a little down the track, a percentage of hydrogen blended with LNG can be pumped through existing LNG iron pipe networks, presenting no hydrogen specific leakage issues.
When the destination is reached, the LNG and hydrogen can be separated.
Eventually, a dedicated pipe network may be required. It has been shown that leakage from plastic (polyethylene PE100) pipes is expected to be very low at about 0.001%.
Hydrogen Storage and Shipping for Export
Iron ore giant, Fortescue Metals Group has partnered with the CSIRO to develop the technology that allows bulk hydrogen to be transported in ammonia.
This allows for hydrogen to be stored and transported in existing facilities used for ammonia, eliminating many of the assumed issues associated with transporting bulk gas or liquid hydrogen.
Experiments are also being conducted in Japan with the shipping of liquid hydrogen, to better understand the problems associated with shipping bulk quantities.
Investment and Collaboration
The Fortescue collaboration is just one example of the industry looking to get a firm head start in the hydrogen export industry.
Fortescue will spend $19 million over the next 5 years researching and developing hydrogen technologies.
It’s this sort of ‘corporate money where your mouth is’ approach that provides an indication that the future for hydrogen export is very serious.
To add to this, the federal and Victorian state governments partnered with a Japanese consortium to launch a $500 million project to turn Victorian brown coal into hydrogen to export to Japan, although this project is not without controversy and federal coalition coal dust paw prints.
Gas and oil giant Woodside has also entered agreements. They will partner with “Korean gas giant KOGAS to co-operate on hydrogen opportunities, and with Pusan University in South Korea to jointly explore technology application across the hydrogen value chain…”
It’s not if but when.
The benefits of integrating hydrogen energy into the global energy chain and taking it mainstream have clearly been recognised.
On that basis, Australian science, industry and government understand that this is an incredible opportunity to send off the Aussie sun to the world packaged up in hydrogen.
Getting in on the ground floor of the forecast hydrogen export boom is critical for the industry’s future in Australia.
It would appear that logistical and cost problems are well down the path of being addressed. It seems that hydrogen science, along with wind and solar energy, has dealt with the carbon and toxin problem.
The industry has shown its hand. They want a part of the new technologies, not only for the production costs savings that hydrogen provides, but also to benefit from emerging hydrogen technologies.
Hopefully, the coal-driven, baseload mindset still holding the seat of power in Canberra will show the leadership required to make the right moves and secure a very green and very renewable hydrogen export industry for the benefit of all Australians.
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