IEA report outlines ‘Future of Hydrogen’

An  International Energy Agency report on The Future of Hydrogen was released at the G20 Ministerial Meeting on Energy Transitions and Global Environment for Sustainable Growth, held in Karuizawa, Japan, on the weekend. It offers a positive outlook for the development of green hydrogen using renewable energy sources such as solar.

The report was accompanied by Japan’s Minister for Economy, Trade and Industry, Hiroshige Seko, restating his country’s commitment to clean-coal technologies, such as carbon capture and storage (CCS) and carbon capture and utilization (CCU).

“It’s inevitable that in some countries, coal thermal has to be used,” Seko said. “Japan’s coal thermal power, compared with conventional coal thermal power, has fewer carbon dioxide emissions and we should provide and implement it in developing countries.”

Was it in the same spirit that Minister Seko signed a Memorandum of Cooperation with Angus Taylor, Australia’s Minister for Energy and Emissions Reduction, to promote trade and investment, support research and innovation, and tackle energy security, reliability and affordability challenges?

Hydrogen, black or green?

There’s no doubt that development of hydrogen technologies is high on both countries’ energy agendas. Japan’s Basic Hydrogen Strategy has been devised and revised under various names since 2014, with the latest update formulated in March this year. Among many key points, it seeks to slash the cost of hydrogen to equal the cost of LNG in Japan, and has set targets for fuel-cell uptake in several heavy-vehicle categories by 2030. As chair of the G20 during 2019, Japan also commissioned the The Future of Hydrogen report to help shape the agenda of G20 talks.

Australian initiatives include the Federal Government’s A$25 million ($17.18 million) investment in clean-hydrogen research and development through the Australian Renewable Energy Agency (ARENA), and also A$50 million (matched by a further A$50 million from the Victorian government) in a controversial coal-to-hydrogen project, in which Japan has an interest, in Victoria’s La Trobe Valley.

“Hydrogen is already made in very large quantities all around the world from gas and from coal, and those pathways will play a role in providing the transition to low-carbon hydrogen a bit of scale at the outset,” Dr. Daniel Roberts, leader of the CSIRO Hydrogen Energy Systems Future Science Platform, said during a briefing on hydrogen earlier this month at the Australian Science Media Centre (AusSMC).

According to the IEA report on The Future of Hydrogen, fossil-fuelled production of hydrogen is currently responsible for “annual CO2 emissions equivalent to those of Indonesia and the United Kingdom combined”. The report says that “harnessing this existing scale on the way to a clean energy future requires both the capture of CO2 from hydrogen production from fossil fuels and greater supplies of hydrogen from clean electricity.”

The solar PV-powered beacon

The report cites the recent success of solar PV, wind, batteries and electric vehicles in showing that countries can use policy and support innovation “to build global clean industries”.

Although the cost of producing hydrogen from low-carbon energy is still a barrier to widespread uptake of green hydrogen, IEA analysis shows that the cost of producing hydrogen from renewable electricity could fall around 30% by 2030 as a result of declining costs of renewables and scaling up of hydrogen production. The report also suggests that “fuel cells, refuelling equipment and electrolysers (which produce hydrogen from electricity and water) can all benefit from mass manufacturing.”

At the AusSMC Hydrogen Briefing, Professor Douglas MacFarlane — leader of the energy program in the ARC Centre of Excellence for Electromaterials Science — said he was confident that over the long term, green hydrogen based on solar and electrolysis will dominate the market.

“This will be driven by economics as the price of installing and maintaining very large-scale solar farms decreases — people are already talking about $20MWh — and also as the cost of large-scale electrolysis drops. We and others are researching the latter to bring down the cost of the materials,” MacFarlane said.

Over the near term, The Future of Hydrogen report identifies four opportunities to accelerate the widespread use of clean hydrogen:

1. Make industrial ports the nerve centres for scaling up the use of clean hydrogen. Today, much of the refining and chemicals production that uses hydrogen based on fossil fuels is already concentrated in coastal industrial zones around the world, such as the North Sea in Europe, the Gulf Coast in North America and southeastern China. Encouraging these plants to shift to cleaner hydrogen production would drive down overall costs. These large sources of hydrogen supply can also fuel ships and trucks serving the ports and power other nearby industrial facilities like steel plants.
2. Build on existing infrastructure, such as millions of kilometres of natural gas pipelines. Introducing clean hydrogen to replace just 5% of the volume of countries’ natural gas supplies would significantly boost demand for hydrogen and drive down costs.
3. Expand hydrogen in transport through fleets, freight and corridors. Powering high-mileage cars, trucks and buses to carry passengers and goods along popular routes can make fuel-cell vehicles more competitive.
4. Launch the hydrogen trade’s first international shipping routes. Lessons from the successful growth of the global LNG market can be leveraged. International hydrogen trade needs to start soon if it is to make an impact on the global energy system.

“International co-operation is vital to accelerate the growth of versatile, clean hydrogen around the world,” concludes the report, and in that sense, the signing of the Australia-Japan Memorandum of Cooperation is a positive step.

Australian collaborations with Japan, such as the recent plan to export green hydrogen from Queensland — as well as the Victorian brown-coal-to-hydrogen project, which aims to capture and store the 100 tonnes of CO2 generated during its pilot phase in 2020 — can both be viewed as exploratory steps toward a clean-hydrogen industry.

But in the context of Japan’s plans to build as many as 30 new coal-fired power stations in its own territory, as well as its financing of new coal-fired plants in Asia, the collective intent behind the various initiatives remains unclear, particularly now that the Australian government is clearing the way for coal-mining companies to break new ground, in the absence of any policy for a clear long-term transition to renewable-energy.