Gippsland Times, 8 September, Latrobe Valley Express, 20 September 2023
Solar, wind and battery storage will not be enough for Australia to meet its net zero emissions target by 2050, according to a senior CSIRO researcher – and using fossil fuels to produce hydrogen is still much cheaper than using renewable energy.
Dr Vicki Au, from the CSIRO’s hydrogen industry mission, with 20 years’ experience in research and development, said other solutions, including hydrogen, were part of the energy mix required to achieve the net zero target.
Dr Au was taking part in a session, ‘Our Hydrogen Opportunity’ at the recent Gippsland New Energy Conference in Sale. Also taking part in the discussion was Jeremy Stone, non-executive director and adviser for J-Power Latrobe Valley, which is part of the Japanese consortium that is developing the HESC coal-to-hydrogen project. The session chair was the chief executive of the Committee for Gippsland, Tony Cantwell.
HESC involves gasifying brown coal, separating the hydrogen and carbon dioxide in the process, at a plant adjacent to Loy Yang A power station. The hydrogen is shipped to Western Port, where it is liquefied and sent to Japan in tankers – the world’s first liquid hydrogen supply chain.
The long-term aim is to sequester the carbon dioxide in empty oil and gas reservoirs in Bass Strait – carbon capture and storage (CCS).
After a successful $500 million pilot plant phase, the group is now moving to the commercial stage of the project with $2.5 billion from the Japanese Green innovation Fund.
“That’s a pretty significant contribution, but we need more to implement the project,” Mr Stone said.
Dr Au said the barrier to using renewable energy to produce the hydrogen was the cost.
“The cost of renewable hydrogen is prohibitively high. We would require a substantial subsidy from government for the transition phase,” she said.
Green hydrogen is achieved through a process of electrolysis powered by renewable energies such as wind or solar. Electrolysis involves using an electrical current to break down the water molecule into oxygen and hydrogen by electrodes.
Questioned whether there was a timeline for a transition to green hydrogen in Gippsland, Dr Au said modelling had been only done nationally and not for Gippsland, but models were being changed and updated annually.
“Also, for the new hydrogen strategy, there is a transition point. Using fossil fuel is the lowest (cost) at the moment,” she said, with renewables probably becoming economic by about 2035-40 with the advances in electrolysers.
“China has really brought down the cost of electrolysers. Those are the facts that will help bring down that cost of renewable hydrogen production. That is where we are; with so much effort being put into technological improvement, we may see that brought forward.”
Dr Au said the challenge of decarbonisation was huge.
“We’re in the situation of the boiling frog – things may be upon us before we know it; it could be too late before we know what to do to reverse (warming). There are different innovations we can invest in to be ready to deploy when we need them and it’s not too late,” she said.
Mr Stone said there were no barriers to renewables.
“We will use renewable energy in our process as well. The challenge is how best to use the renewable energy. Green or renewable hydrogen takes a huge amount of energy; the best is to electrify our system rather than use coal-fired power stations,” he said.
“The infrastructure we build – the pipelines and storage, liquefaction and the shipping – will be equally able to be used by renewable hydrogen projects when they are ready.”
Mr Stone said he would be happy for a green renewable hydrogen project in Gippsland, but costs needed to come down.
“Everyone wants that electrolyser, the ability to upgrade production, find the mines that extract the lithium and cobalt, silicon to make the batteries, wind farms and electrolysers – there are huge supply chain issues. Frankly, we can’t wait until 2040 to start doing this at scale,” he said.
“We don’t have the time, we need carbon neutrality as fast as we can, but pragmatic decisions are needed. Focus on carbon intensity, the economic benefit, be pragmatic on project-by-project basis, put ideology aside – otherwise we will be sitting here saying ‘I wish we had done something’.”
Dr Au said, “that is true”. “Get projects going, there is learning from that … stalling for fear of getting it perfect, you will miss the boat,” she said.
Mr Stone said Gippsland had great assets – a vast and cheap resource, the work force and infrastructure that can be repurposed.
“It is the circular economy, re-use everything,” he said.
It was not just about hydrogen; the process also gave access to nitrogen.
“Hydrogen and nitrogen together can form ammonium, giving us a sovereign capability. We can add the CO2 to make fertiliser,” he said, creating a home capability that no longer required huge imports. The hydrogen and CO2 could also produce methanol and aviation fuel.
“If we mix biomass in with our coal, which we’ve done in our pilot, we can produce carbon neutral hydrogen, carbon neutral fertiliser, aviation fuel and methanol. This is something unique to Gippsland with the conditions of the Latrobe Valley coal and our process making it unique to Gippsland to provide other benefits,” he said. The biomass would come from plantation waste or special plantation forests.
“It’s not a perfect project, but we do say it’s the right carbon reduction project in the right place – Gippsland – and the right time. The CO2 reduction targets are so massive, we need to do things now. We are ready to take the challenge now.”
Mr Stone said HESC, which had been going for ten years, had already produced 99.99 per cent hydrogen in the Latrobe Valley.
We would like to take that to the next stage,” he said.
His company, J-Power, has 25 gigawatts of generation capacity around the world, with 50 per cent renewables in Japan.
“We invest in clean technologies – wind, biomass, solar around the world – and hydrogen,” he said.
Mr Stone said HESC commercial production would be 40,000 tonnes per year of hydrogen – 30,000 tonnes to Japan and 10,000 tonnes to help carbon reduction in Victoria and Australia. “We need to be in operation by 2030,” he said.
The consortium consists of two basic entities: J-Power and Sumitomo Corp, which are responsible for production of hydrogen and CCS; and downstream, Japan Suiso (Hydrogen in Japanese), which consists of Kawasaki Heavy Industries and Iwatani Corporation, which takes care of the liquefaction and shipping to Japan.
“They liquefy the hydrogen down to minus 253 degrees Celsius, reduces the volume to 1/800th of its scale, making it easier to store and transport. The ship is unloaded in Kawasaki City, a port close to Tokyo,” he said.
Mr Stone said the basic use for the 30,000 tonnes was power generation.
“New turbines are being developed to take hydrogen gas, but also to use for transportation,” he said.
In Australia, the 10,000 tonnes were initially for transport – trucks, buses and fuel cells.
“It’s also a swap for existing hydrogen that is produced now without any carbon abasement,” he said, which pushed millions of tonnes of CO2 into the atmosphere.
“We can swap some of that with the 10,000 tonnes and get good a climate benefit. CCS is part of the process.”
Mr Stone said Japan imports 90 per cent of its energy as fossil fuel.
“With a 2050 carbon neutrality policy, they need to do a lot of things to lift clean energy to replace 90 per cent fossil fuel,” he said.
In the past, people talked about hydrogen on a colour-coding basis.
“That is a good way to start, but the customer needs more than that – they need to know what sort of carbon intensity,” he said. That would involve CO2kg/H.
“Once a tradeable commodity, customers will want this carbon intensity at a price. The analogy is the petrol station; you choose 91,95, 98 fuel based on need and price point. This is where the customer is heading with hydrogen as we transition to net zero,” he said.
“In Australia, a guarantee of origin scheme is being put together by the Clean Energy Regulator. We are happy to be part of that process.” The carbon intensity requirements for green hydrogen varied from country to country, from 2CO2kg/H, 3.4kg or less, 4kg and 3.4kg.
“These are the numbers that provide evidence of how organisations can transition to lower carbon.”
Mr Stone said the fact was CCS had been around for 45 years; there were 35 CCS facilities in the world.
“More than 200 CCS projects are being developed around the world as we speak, being supported by US, Canada, Japan, UK, China and South-East Asia SEA. The IEA (International Energy Agency) and IPCC see this as a necessary requirement globally to reach net zero targets,” he said.
CarbonNet in Bass Strait and Exxon Mobil in the Gippsland Basin were researching CCS.
“If we become a foundation customer, we can get Exxon Mobil or CarbonNet to build a sequestration project that can be used by other industries in Victoria and across Australia – hard-to-abate industrial industries that need to do something with their CO2. It would be great if they could use one of these sequestration projects,” he said.
“There are many projects out there. I think we need to do all these projects at the same time to hit targets.”
Australia was one of the first countries to have a national hydrogen strategy in 2019.
“That is being reviewed by the federal government,” he said.
Mr Stone said the pilot project ‘proved up’ the liquid supply chain. Japan imported fossil fuel energy but were first with a hydrogen strategy and needed to bring in a cleaner liquid that was versatile – “liquid hydrogen, ammonia, cleaner methanol”, which was challenging.
“Why liquid instead of ammonia? Each has its pros and cons. We think customers will bring it on based on their needs; if they need ammonia, they will bring it in for industrial purposes; they may co-fire some coal plants with ammonia. If you want hydrogen, you will bring it in as liquid hydrogen; to take ammonia to Japan, use clean energy to crack out hydrogen from ammonia doesn’t seem to make a lot of sense,” he said.
Dr Au said the most mature hydrogen economies in the world, the US and Japan, were moving hydrogen around as liquid.
Queried whether hydrogen could be stored for a long period given it is the tiniest molecule, Mr Stone said hydrogen had been around for decades; the space industry had achieved a lot of technical improvement in storage.
“We have to start … get going, learn and do again. It’s 2023 – not a lot of time to reach carbon zero. Trust the science,” he said.
Dr Au said liquefied hydrogen had long been stored.
“Hydrogen carries ammonia, we know how to store ammonia for a long period; methanol is a hydrogen carrier, we know how to store that. These are all ways you can think about hydrogen storage,” she said.
“It doesn’t have to be in elementary form, it can be liquid. We know how to store it; there are safety procedures on handling different forms of hydrogen. It’s a question of extracting it if you are going to use it for fuel cells that take methanol, gas turbines that take ammonia, marine engines’ ammonia, ammonia methanol – there are hydrogen and hydrogen derivatives.”
Queried about the danger of hydrogen exploding, Dr Au said safety was paramount in all projects.
“We follow all the regular procedures. It’s not as if we don’t already utilise hydrogen; a great deal of hydrogen is used in fossil fuel form,” she said.
Regarding safety, “we must make sure people understand and we have a social licence to operate”.
“We have a substantial liquefaction industry, we use internal combustion in our cars, drive them around – we understand the concern. For us, it’s more communication. We already are using very highly combustible fossil fuels in our daily lives.”
Hydrogen was light, in a pressure vessel leak, the hydrogen “goes up into the air, unlike petrol”.
“You have a leak, it cools and it’s actually more dangerous in terms of fire and combustion. We must communicate how hydrogen behaves and put in place measures to manage the safety aspects and we can move forward in terms of our energy future,” she said.
Queried whether HESC would share the cost of rehabilitating the Loy Yang mine, Mr Stone said the amount of coal the project would use was small compared with what was used at Loy Yang A and B.
“AGL is responsible for the coal supply. They will continue their rehabilitation of their mine and they are working on that now and will continue. The sale of coal to us will include rehabilitation. We would encourage that; our organisation is into sustainability as well – and the cost is part of coal price,” he said.
“It does not necessarily mean we will put CO2 into the atmosphere, and it will be carbon neutrality, particularly if mix biomass. Pragmatism will ultimately be vital. Green hydrogen is not necessarily neutral.”
Each project would have its own carbon holistic life cycles. For example, renewables required mining operations in the production of the components; they were refined and shipped around the world: and PV panels and wind turbines lasted about 15-20 years.
“Hopefully we can lift our recycling of those things. I think we need to look at everything holistically and not just focus on coal,” he said.
