Hydrogen industry hubs to tap clean fuel boom
Hydrogen industry hubs are being set up across the country by National Energy Resources Australia to capitalise on an emerging business opportunity in what is being touted as a global clean fuel boom.
Many advanced nations have committed to net-zero emissions by mid-century and hydrogen is considered a growth industry due to its ability to store clean energy from renewable sources.
Early stage businesses in Australia’s nascent hydrogen industry will share in Commonwealth seed funding.Credit:AFR
Federal Energy and Emissions Reduction Minister Angus Taylor said the industry’s potential “cannot be ignored” and argued that Australia can attract $70 billion of investments over the next decade.
NERA is federally-funded and pools together with private business for industry growth.
Its chief executive Miranda Taylor said hydrogen presents an “enormous opportunity for Australia”.
“The world is on a decarbonisation journey and it’s a case of making sure Australia doesn’t get left behind,” Ms Taylor said.
Companies have already been selected to work in the hubs, and will share in $1.75 million in seed funding. The hubs are designed to gather companies working on new hydrogen technology in all areas of the supply chain to drive business growth and innovation.
Mr Taylor said the hydrogen industry could potentially reduce domestic energy costs if technological advances bring down the cost of production.
“Importantly, if we can get hydrogen produced at under $2 a kilogram, it will be able to play a role in our domestic energy mix, bringing down energy prices,” he said.
NERA has $1.7 million in seed funding available over 18 months for business working in hydrogen hubs which will be set up in 13 industry clusters in every state and territory.
“These regional clusters, all of which have the support of their state and territory governments, have been established around key, existing hydrogen projects and technology supply chains in
strategic locations that have a demonstrated capacity to support them,” Ms Taylor said.
The federal government has committed $70 million to help develop a regional hydrogen export hub, and Australia has signed agreements with Japan, Korea, Germany and Singapore to investigate hydrogen supply chains to provide those countries with clean fuel, and the Asian Renewable Energy Hub is developing plans for a whopping 26 gigawatt green hydrogen export project in the Pilbara.
The Clean Energy Finance Corporation has a $300 million fund for hydrogen projects – including those powered by fossil fuels, and the Australian Renewable Energy Agency has $70 million available for green hydrogen projects.
Hydrogen is a rare element which means it needs to be manufactured. The energy and materials can be provided by either renewable power and water, or coal and gas.
There are three methods to extract hydrogen. One is electrolysis that uses electricity to ‘split’ water, which can be powered by renewables in an emissions-free process and is known as green hydrogen.
Thermochemical reactions drive the other two methods. One uses gas and the other uses coal or gas, and for either to be a clean energy source they require carbon capture and storage to stop the emissions from the fossil fuels entering the atmosphere. These are known as blue hydrogen.
The Morrison government’s low emissions investment road map is “technology neutral” which means public funding is available to green and blue hydrogen. For fossil fuel production to be ‘clean’ carbon capture has to be tacked on to capture the emissions.
Proponents of renewable energy and some business leaders have raised concerns that financial support for hydrogen production powered by fossil fuels could artificially prolong the operation of the nation’s ageing fleet of coal-fired power stations, or create demand for gas which would be better directed to wind and solar projects.
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