Hydrogen is gathering significant momentum globally as it shifts into economical and flexible fuels, energy carriers and enablers for the rapid and widespread deployment and international trade in renewable energy.
Evaluation of commercial business opportunities for hydrogen will depend on critical evaluation and interrogation of technological, economic, social, environmental and political drivers and obstacles. This article provides a broad overview of these drivers and obstacles and covers the latest developments in the developing hydrogen industry.
Apart from being isolated in some cases, most of the technology needed to support the development of the hydrogen industry exists and has been operated safely with acceptable performance at least on a pilot scale. The use of hydrogen distributed as a fuel and energy carrier to serve the mobility and power generation market makes use of its wide use in a number of process and manufacturing industries (chemicals, petrochemicals, oil hydrogenation, glass, pharmaceuticals, microchip cleaning, the aerospace industry, turbine cooling) . It also benefits from the various production options available including coal gasification, methane vapor reform, partial oxidation of hydrocarbons, water electrolysis and biological production. The Western Australia-based Hazer Group has developed a new process using unprocessed natural gas and iron ore to create a “clean, low cost and low emissions: hydrogen.
Hydrogen flexibility is suitable for regular transitions from high energy dependence on fossil fuels to renewable energy and biofuels and from highly centralized to distributed energy systems. Hydrogen is safely transported over short and long distances in pipes through special compressor units or through compressed or liquid hydrogen cylinder trailers. It can be stored securely in the form of gas, liquid or solid for mobile and stationary applications in the short and long term at any location and on any scale, from micro tubes for handheld mobile devices to large storage vessels for mass and intercontinental transportation. . export. Hydrogen unit operations are integrated with the use of special hydrogen lines, valves, and vents with hydrogen flow which is tightly controlled and accurately measured. Hydrogen leaks can be identified by ultrasonic gas leak sensors and detectors.
The market appetite for hydrogen has increased rapidly with automotive, electricity, gas and water utility companies, fertilizer producers, urea and explosives, mine operators and local councils now investing in trials of hydrogen power plants and hydrogen fuel cells throughout the Australia. Many other large and small companies seriously evaluate the scale and timing of their future investments in hydrogen with careful guidance on the cost of producing critical hydrogen and breakeven points.
The mobility sector was the initial driver in the global hydrogen industry led by Toyota, Hyundai and Honda in the light duty vehicle sector and Nikola, Toyota and Hyundai in the heavy duty vehicle sector. There are 432 hydrogen fueling stations currently operating worldwide, with 226 planned for commissioning and more than 19,500 light fuel cell electric vehicles (FCEV) on world roads by the end of 2019 (US: 42%, South Korea: 26%, Japan: 19%, Europe: 13% and China: 1%). Orders placed dominated by Asian buyers will increase this to more than 50,000 by the end of 2020.
Market opportunities exist for Battery Electric Vehicles (BEVs) and FCEVs for short, regular, urban trips. However, due to high volumetric density and fast refueling, hydrogen FCEVs are considered more suitable for long distance travel from heavy duty vehicles such as trucks and coaches. The Moreland City Council in Melbourne is testing two Toyota Mirai FCEVs. The third hydrogen fueling station in Australia will be built at the Bulwer Island Refinery in Brisbane to refuel QFleet FCEVs. Other proposed hydrogen mobility projects are planned for the City of Ballarat and Canberra. There is also a growing growth rate and trials of trains, trams, ships, hydrogen fueled ships, and fuel cell electric planes.
In the power sector, a turbine in the nominal capacity of 440 MW runs with a mixture of natural gas and hydrogen and a special hydrogen fuel turbine using Wet Low Emission Technology currently being trialled by Mitsubishi Hitachi Power Systems, GE Power, Siemens Energy and Ansaldo Energia for power plants large-scale electricity and low emissions.
Proton exchange membrane fuel cells (PEM) remain a relatively expensive cost component in the hydrogen system at $ 1,000 / kW, but have achieved energy efficiency and performance targets for market acceptance especially for mobility applications.
Jemena, Atco Gas and the Australian Gas Network (HyPark South Australia and HyPark Gladstone) all invest in hydrogen trials for natural gas substitution in pipelines, some with financial support from government funding. The Australian Hydrogen Center plans to inject up to 10% renewable hydrogen into the gas distribution networks of certain cities in the states of South Australia and Victoria by the end of 2022. Hydrogen-fueled boilers are also in the initial stages of development for the supply of heating rooms in commercial buildings and as a source of industrial process steam and heat. Yara Fertilizer, Incitec Pivot, and H2 Utility are testing renewable hydrogen plants for ammonia production in Western Australia, Queensland and South Australia. BOC, Origin Energy, Woodside Energy, H2 Utility, Renewable Hydrogen Australia and Siemens plan to export mostly hydrogen or ammonia. Queensland State Development Minister Cameron Dick announced at the Central Queensland Hydrogen Forum on 26 February 2020 that H2 Utility had purchased a 171-hectare site in the Gladstone State Development Area to build and operate a 3 GW PEM electrolycer for the production and export of green hydrogen and ammonia.
The net present value and the internal rate of return of renewable hydrogen projects and, in large part, the growth of the renewable hydrogen market is largely determined by electricity costs. Solar-scale wind and solar PV farms in certain locations throughout Australia provide abundant, affordable and reliable energy with low level energy costs (LCOE) of $ 34 / MWh and $ 45 / MWh respectively. This represents less LCOE than coal plants that best produce power with an LCOE of $ 60 / MWh.
Although the level of LCOE reduction from solar PV and wind has subsided over the past few years, the cost of renewable hydrogen is estimated to fall to the range of $ 2.0 to $ 3.2 / kg H2 in many locations throughout Australia by 2030 and below or close to even point limits for various applications (trucks: $ 3.6 / kg, cars: $ 2.9 / kg, ammonia production: $ 2.5 / kg and refinery hydrogen separation: $ 2.5 / kg).
The largest known electrolycer located at Namie, Japan north of the former Fukushima Daichi nuclear plant, has just started operating at a nominal capacity of 10 MW. This will produce enough hydrogen up to 560 full hydrogen FCEVs. The new Toyota Mirai FCEV model is reported to travel 30% further than the standard model per kg of hydrogen consumed.
Construction of the Canadian Air Liquide 20 MW electrolysis system (3,000 tons per year) in Becancour, Quebec is ongoing and will be completed by the end of the year. There are two 20 MW (4,000 normal cubic meters per hour) PL electrolyser plants planned for construction in Europe which are estimated to produce hydrogen at a cost of US $ 6.0 / kg. This is predicted to fall 60% to US $ 2.6 / kg in 2030.
Minister of Commonwealth Energy, Honorable. Angus Taylor recently appointed Australia’s Chief Scientist Dr. Alan Finkel to lead a committee that will work on reducing the cost of electrolytic hydrogen production in Australia to less than $ 2.0 / kg H2. Dr Finkel believes that hydrogen can be produced in Australia with a low price of $ 1.20 in 2050.
Dr Finkel has noted that this is a critical projection because “if hydrogen production can achieve the same level of commercial competitiveness achieved by solar and wind power plants in the electricity sector, this could create substantial economic opportunities for Australia, generating around 7,600 jobs and add about $ 11 billion per year in additional GDP by 2050. If the global market develops faster, that could mean 10,000 other jobs and at least $ 26 billion per year in GDP “.
The capital cost of PEM electrolyser is expected to drop to around $ 400 to $ 600 / kW in five years, adding to the feasibility of large-scale hydrogen export projects, replacing diesel generators for remote area power systems and microgrids, and adding power across the transmission network for network firming.
A hydrogen fueling station operator in California aims to sell hydrogen over the next 3-5 years at a price of US $ 10 / kg (US $ 0.98 per liter of gasoline). Although FCEVs are relatively expensive in the range of US $ 40,000 to US $ 60,000, they are starting to offer a total cost of ownership parity with BEVs for applications that require long distances and heavy loads. As such, they are projected to be cheaper to run than BEV and internal combustion engine (ICE) vehicles in 10 years. Meanwhile, the application of hydrogen mobility will be limited by the high costs of hydrogen refueling stations compared to gasoline and diesel equivalents.
The Asia Pacific hydrogen market is accelerating faster than anything else (Image 1) and is expected to reach € 30 billion ($ 52 billion) by 2030. Investors are pinning their hopes for long-term financial returns on sustainable performance and increasing costs resulting from:
- the development of composite and other new materials which are very specific and available for catalyst coatings, membranes and storage vessels;
- system optimization of integrated hydrogen systems; and
- reduction of costs from increased production and plant capacity installation and deployment.
The Center for Cooperative Research for Future Fuels, CSIRO and many universities and research organizations around the world are working on new materials, system efficiency and cost reduction for advanced hydrogen technology and pipelines, electrolyser, fuel cells, hydrogen storage and system design optimal integrated.
In general, there appears to be greater market acceptance and positive acceptance of the economic and environmental benefits of hydrogen. It is clear that renewable hydrogen will provide the best environmental results even when the impacts of solar agricultural land and the challenges with disposal and recycling of used solar cells and wind blades are considered (Table 1).
Table 1: Intensity of emissions from various hydrogen production routes in Australia
Many argue that investment in and adoption of renewable hydrogen must be accelerated ahead of a cost curve that is warned by the broad economic impact of climate change when the average equivalent concentration of global carbon dioxide (CO2-e) surges above 410 parts per million. Although many Australian and global businesses do significant resources on the decarbonization of their operations, more than 40% of listed ASX 200 companies have not set emission reduction targets.
Although renewable electricity generation in Australia increases by more than 10% per year and contributes more than 20% of all electricity generation, its contribution to primary energy production is under 1%. It remains imperative to pursue all low carbon technologies as soon as possible including hydrogen and carbon capture and storage (CCS) and possibly nuclear – if we want to understand the gravity of the effects of climate change and the big challenges going forward to improve them.
Recent studies and surveys by the University of Queensland have identified gaps in knowledge and understanding of hydrogen technology and what can and cannot be reasonably achieved in the short and long term. Cynical energy practitioners who may be conservative continue to harbor reservation feeling deeply citing concerns with limitations of fundamental thermodynamics, low efficiency and relatively high costs associated with hydrogen production, compression, storage and conversion. This concern reflects the same doubts about the future feasibility and cost of solar PV systems many years ago.
Public awareness and acceptance of hydrogen as a safe and reliable fuel is mandatory, especially since hydrogen will be used in our cars, for heating and cooking in Australian homes, offices and industrial plants in the near future. The Toyota Hydrogen Center in Altona, Melbourne operates a hydrogen fueling station to refuel Toyota Mirai FCEV, demonstrate technology and increase public awareness and acceptance of technology.
Certified hydrogen technology training programs from native experts and skills development at all levels of professional, trade and academic education must be carried out as soon as possible.
AIE members will recognize the importance of monitoring technological developments and regulations abroad and the implications of increasing dependence on imported crude oil, refined oil products, industrial chemicals and vehicles and automotive components.
China, Japan, the Republic of Korea, the United States, Britain, France, Germany, the Netherlands, Norway and other European countries are leading global cargo in hydrogen by investing millions of dollars in commercial scale mobility and renewable energy projects.
Many European countries, India, Mexico and California have set dates for when gasoline and diesel-fueled ICE sales will be banned while others have set clear targets for increasing the number of FCEVs and publicly funded hydrogen fueling stations. The British government is currently looking to put forward the date when sales of gasoline and new diesel cars and vans will stop from 2040 to 2035, or earlier if a faster transition seems feasible.
As an importer of automotive vehicles, Australia inevitably has to develop hydrogen supply networks to support hydrogen-fueled FCEVs or ICEs.
Low domestic diesel reserves, the suspension of Holden’s domestic operations and Australia’s high dependence and vulnerability to Chinese demand for LNG raise national concerns, especially if we are slow to adapt and respond to international developments. However, the emergence of the hydrogen industry can play an important role in increasing trade and stabilizing the energy security of Australia and its neighbors, a major driver which has been largely ignored in recent hydrogen forums and discussions.
Many countries – some of our neighbors not too far away – will not be able to produce enough hydrogen to meet their future domestic energy needs and will inevitably be very dependent on hydrogen imports. Clean energy importing countries such as Japan have articulated geopolitical reasons for choosing hydrogen sources from stable economies such as Australia.
The recent wave of interest in hydrogen is not a brief result of the ongoing coordination efforts of the National Hydrogen Unit led by the Commonwealth Government of Alison Reeve, Nicole Henry and Australia’s Chief Scientist Dr. Alan Finkel who presented the National Hydrogen Strategy (NHS) to the Australian Government Council (NHS) COAG) late last year after extensive consultations with government and industry stakeholders.
In rare and landmark national achievements, the NHS recommendations are endorsed and accepted unanimously and by the COAG Minister of Energy, which presents opportunities for accelerating the development and improvement of hydrogen pilot projects and research.
The NHS expands state government initiatives that have developed or developed hydrogen strategies, road maps and policies that are dedicated to building a framework to support greater hydrogen absorption in the market and attract private investment into their country’s economy. Dr. Finkel has provided the much needed hydrogen leadership above and above its core role as the main scientific advisor to the government.
Although not a popular perspective to share, he and others have identified that hydrogen demand cannot be fulfilled only with renewable hydrogen and not long after 2050.
Commonwealth and most State governments offer grants to support the development of hydrogen projects including a $ 300 million investment from the Advanced Hydrogen Fund from Clean Energy Finance Corporation and $ 70 million from ARENA to support the development and demonstration of electrolyser technology.
National Energy Resources Australia runs a series of hydrogen industry stakeholder workshops throughout the country to consider the benefits and efficacy of investments in the formation of hydrogen clusters.
Australian Standards have appointed Rachelle Doyle of Woodside Energy to lead her ME-093 Hydrogen Technology committee responsible for the development, modification and adoption of new Australian and international standards which include manufacturing, storage, transportation, refueling, fuel cells and hydrogen health, safety and safety, safety. and the environment.
ME-093 committee deliberations are directed at harmonizing Australian and international standards and easing local regulatory barriers or compliance with the development and operation of hydrogen projects. Adelaide is a host 5th International HySafe Conference last year with a process that confirmed that hydrogen does not pose additional safety risks for operators and consumers over conventional fuels.
New hydrogen lobbies and advocacy groups including the Australian Hydrogen Council (formerly Australian Hydrogen Mobility), the Australian Hydrogen Society and the Australian Hydrogen Smart Energy Council have been formed to advance the cause.
The local hydrogen industry is ready for significant development in the coming years – what is unclear is how fast it will develop as a major commercial fuel and commodity and at what scale. This is an area of industrial development that will be very attractive to AIE members who monitor the future development of the energy industry.
This article originally appeared in the March issue of the Australian Institute of Energy (AIE). H2 View has republished it with the author’s permission and AIE.
Luigi Bonadio is a chemical engineer based in Melbourne with more than 25 years of local and international management, engineering and project consulting experience.
He designs and implements energy and clean water management solutions for various government and corporate clients operating in the commercial and industrial, manufacturing and transportation sectors.
Luigi sits on the AIE Melbourne Branch committee.
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