Green hydrogen an emerging opportunity for regions

Australia’s shift away from fossil mining and energy towards renewables could present regions with new industrial opportunities in the coming decades, the Future Energy conference in Adelaide has heard.

With a particular focus on hydrogen – a significant investment area of the South Australian government – the conference heard from several industry and research experts about the benefits expected to be generated by the industry in Australia.

Hydrogen is often cited as a major clean fuel export opportunity in Australia, supported by state and federal governments, energy companies and environmental NGOs alike. But the support of the latter almost exclusively hinges on the development of fully renewable ‘green’ hydrogen.

Aerial view of whyalla
Whyalla, South Australia. Credit: John White Photos / Getty Images

That form of the gas is generated by electrolysing water to separate hydrogen and oxygen, powered by a renewably generated electrical current from a nearby solar or wind plant.

Estimates suggest around 90% of global greenhouse gas emissions are covered by net zero targets, with major economies like the US, Europe and China’s commitments accounting for a quarter of global emissions alone. Industry leaders identify Australia as a net energy exporter as being uniquely placed to supply major economies in an electrified future.

Green hydrogen is a zero-carbon fuel, but most hydrogen is generated using fossil fuels – like gas – diminishing its decarbonisation impact for both producing nations like Australia, and customers around the world. The International Energy Agency estimates six times the amount of hydrogen in market today will be required for world needs.

That presents an opportunity for green, renewable hydrogen to enter the market. To do so will require a massive increase in electrolysers – the necessary tools to split water into useable products.

Estimates suggest more than 100 million tonnes of hydrogen used in chemical and transport fuel manufacture is derived from fossil fuels. In Australia, the largest current electrolyser is 1.25MW, based at the SA Hydrogen Park at Tonsely – just metres from where the Future Energy conference is being held. A 10MW electrolyser is being built by Engie for a fertiliser plant in Karratha due for completion next year; Australian Gas Networks is constructing one of its own at its Hydrogen Park in Wodonga, due in 2025. In Whyalla, the South Australian government is constructing what is set to be the world’s largest electrolyser – 250MW – in Whyalla.

A further 100GW of green hydrogen projects are in the pipeline, many in regional locations.

This, says Paul Hodgson, chief executive officer of the Scaling Green Hydrogen Cooperative Research Centre, speaks to the opportunity of generating clean fuels and resources for use where they’re needed – not just for pure export, but for regional water supplies, agricultural needs and fuels for hydrogen-powered infrastructure.

He says local electrolysers can provide both a fuel – hydrogen – and distributed water as part of that infrastructure.

For communities that feel the pinch of non-gridded electricity, high diesel prices or require fossil fuels to support their generators, Hodgson sees a chance for greater local “energy sovereignty” as part of the renewable transition.

“This is the opportunity for a region to go, ‘we’ve got land, we’ve got an energy need, we’ve got a chemical need, and being at the end of the supply chain, we can actually create our own local microgrids that capture electricity from the sun or from wind,” Hodgson tells Cosmos.

He points to opportunities in renewable electricity for battery storage, fresh water creation through desalination, and hydrogen as either a fuel source or to support green fertiliser for agriculture or to operate heavy machinery.

“If I’m in an agricultural region, all of a sudden, now I’ve got access to energy, water, chemicals, that can also drive other economic development.

“If you’ve got those three, maybe you can bring manufacturing to town, maybe you can bring refurbishment to town, maybe you can bring a whole bunch of services to town, because now you’ve actually got a really strong foundation for regional economic development.”

The Scaling Green Hydrogen CRC is a collaborative venture that aims to de-risk the energy transition through partnerships with industry and government. It counts 17 Australian universities, the CSIRO, four state governments and the commonwealth among its initial investors, which Hodgson hopes will keep the initiative going for at least a decade.

While scaling green hydrogen is the name of the game, Hodgson emphasises that individual industries are still exploring which fuels will be necessary to meet their needs in a decarbonised environment. In some cases, fully renewable technology may not be fit for purpose, nor will centralising renewable tech be of great benefit to communities.

Hodgson instead expects existing current infrastructure will need to be used as much as possible to reduce waste and drive costs down to ensure a smooth transition for existing fuel customers and energy users. 

“When we talk ‘scaling,’ we’re not just talking big and centralised in the way that a lot of energy has been done in the past, we’re talking about a network effect… about it being scaled, but in a distributed way, rather than in a centralised way,” Hodgson says.

“There will be a need for both.”

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