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Is a hydrogen economy on the cards?

For those that live and breathe energy as their profession, thinking about a future hydrogen economy is really interesting stuff. Some see it as the silver bullet for de-carbonisation. Some, it must be said, think its all hot-gas. Whilst galvanising to professionals, the general public’s understanding and interest in hydrogen is comparatively very low. Bridging this gap will be important in making a hydrogen economy a reality – both for consumer’s choice in purchasing products (i.e. hydrogen cars) and for the acceptance of government decisions to subsidise initial developments.

Why do we care about hydrogen production?
Hydrogen is already produced in large quantities. The problem is that almost all of today’s hydrogen is produced from processes that use fossil fuels. Roughly speaking, one ton of hydrogen produced in such a way will also produce ten tons of CO2. Industrial processes currently form large markets for hydrogen, including in the production of ammonia for fertilizers and for use in refining crude oil.

If hydrogen used in these processes can be replaced by hydrogen produced from low emissions sources, then it would help meet countries’ carbon reduction targets. This can be done from a technique known as electrolysis – in a nut shell, a process whereby electricity and water react to split water into hydrogen and oxygen. If the electricity is generated by renewable technologies, then you’ve produced “green hydrogen”.

Through a hydrogen fuel cell, hydrogen can also be used as a stationary power source for off-grid systems and grid stability services, and for vehicles ranging from cars, trains, buses and drones.

To the early movers go the spoils
The catch, of course, is that hydrogen production from electrolysis needs to come from low carbon sources for it to have an environmental benefit. This means that it will need to be produced from a low emissions grid, or from a renewables micro-grid that can produce it in large enough volumes to make it commercially viable.

South Australia has put itself front-and-centre globally  with the release of its Hydrogen Road Map. There have been a number of early markers on the road map, including $8.2 million for a fleet of hydrogen buses and refuelling station, and a $7.7 million renewable generation and energy storage demonstration facility, which will include a 50kW hydrogen fuel cell and electrolyser at the University of South Australia.

South Australia’s ambitions have only grown since then, with financial support for the construction of a 400MW solar and wind farm and electrolyser to produce 20,000 kg of hydrogen per day. Additionally, Port Lincoln will be the site for a 15MW electroyser, a distributed ammonia production facility, and a 10 MW hydrogen gas turbine and 5MW fuel cell to supply power to the central grid.

These projects far exceed what other states are doing to support the development of the hydrogen economy. The end-game is to be a global exporter of hydrogen to Asia Pacific markets, which could become a multi-billion dollar industry.

Why do I care as a consumer?
There still remains a huge gulf in what can broadly be described as energy literacy. The average punter has difficulty in understanding how to read an electricity bill, how to change their retailer to save money on energy bills, or why and how to shift the time-of-use of electrical appliances. As government’s continue to introduce policies to reduce carbon emissions, consumers will be increasingly attracted (lower prices), incentivised (subsidies), or forced (penalties) to look to low emissions vehicles like hybrids, electric vehicles (EVs) or hydrogen fuel cell electric vehicles (FCEVs).

Whilst EVs have a much greater market penetration at present and higher awareness amongst the public, FCEVs will continue to have a key advantage. Roughly speaking, a FCEV can be refuelled in about 5 minutes for a range of 312 miles. A Tesla Model S will take 30 minutes of charging time for a range of around 270 miles. One can spend less time charging EVs for shorter bursts of distance, but this has consequences for the longevity of the battery – an issue that a FCEV will not have. It’s also asking people to change their behaviour from fuelling-up once a week to multiple times a week, which will prove a challenging barrier for mass up-take in countries used to travelling long distances daily.

This advantage helps explain why industry, government and policy makers would support hydrogen fuelling infrastructure alongside the charging points for the EV fleet, and continue on with developing technologies and finding new markets in order to reduce prices to make it competitive with EVs.

Tokyo 2020
If the 2020 Tokyo Olympics is lit of a hydrogen-burning Olympic flame, then the hydrogen economy has gone a long way in showcasing it is a serious part of the world’s decarbonisation efforts. Japan is going all-out to use the event to showcase hydrogen, which will include athletes being transported in Honda and Toyota FCEVs between the village and events. Broadcast to millions, this event can go a long way to improving people’s awareness and acceptance of hydrogen in one’s every day routine and help create consumer-led demand for hydrogen fuelled vehicles.

If you’re interested in learning more about what South Australia is doing to support the development of green hydrogen, please contact Joe Doleschal-Ridnell.

Take a look at the minerals and energy resources page to learn about the investment opportunities for this sector in South Australia.