WA’s renewable hydrogen future more than hot air

Western Australia (WA) is set to play a leading role in the development of renewable hydrogen infrastructure, facilitated by amenable State Government policy settings and the establishment of bodies like the Western Australian Renewable Hydrogen Council to facilitate industry engagement.

Michael Cairnduff 23 Oct 2020
5 mins

Western Australia (WA) is set to play a leading role in the development of renewable hydrogen infrastructure, facilitated by amenable State Government policy settings and the establishment of bodies like the Western Australian Renewable Hydrogen Council to facilitate industry engagement.

The Government of Western Australia first released its Renewable Hydrogen Strategy in July 2019 and has made genuine on-the-ground progress with myriad initiatives to underpin investment in the sector since.

Speaking at a Petroleum Club of Western Australia event, WA Minister for Regional Development, Alannah MacTiernan, said the strategy would continue to focus on core areas of industry support including hydrogen blending in natural gas networks.

“We have identified 240 pieces of legislation that might need to be changed. We have also directed $1.68 million to private and public sector entities to support feasibility studies across seven proposed projects,” Minister MacTiernan said.

The renewable hydrogen sector has also become a key priority of the WA Government’s $5.5 billion COVID-19 economic recovery plan, which has delivered a further commitment of $18 million in funding in addition to the initial $10 million allocated when the strategy was released.

“An extra $18 million will support this dynamic and rapidly growing industry, and to make sure WA has a critical part of it,” she said.
“We have recently approved $8.7 million for capital works projects, including FMG’s mobility project at Christmas Creek … the ATCO hydrogen refuelling station at Jandakot … and the Horizon [Power} microgrid demonstration project in Shark Bay.

“From the additional funding announced … we have another $5 million to run a second round of grants funding … including looking at doing some blending studies, which is going to be really important.

“We believe that blending into the existing gas reticulation system is going to be a really important way of developing this industry early and we are providing $1 million towards a detailed supply chain study.”

The WA Government has also identified Oakajee, 23 kilometres north of Geraldton, as a Strategic Industrial Area (SIA) to become a renewable hydrogen hub.

This area of the Mid-West is recognised for its world-class wind and solar energy potential – ideal for producing renewable hydrogen. Initial assessments indicate the 4,070 hectare buffer area could generate up to 270 megawatts of wind power and 1,250 megawatts of solar energy at internationally competitive prices.

Minister MacTiernan has called for expressions of interest from commercial groups looking to produce or use renewable hydrogen within the Oakajee SIA. The WA Government is also leveraging its international offices to promote this opportunity globally. Submissions close on 24 December 2020.

The Oakajee SIA is connected to the State’s major road network and existing Geraldton Port via the North West Coastal Highway. There are also provisions in place for the area to be linked to the Australian Gas Infrastructure Group (AGIG) owned and operated Dampier to Bunbury Natural Gas Pipeline.
This opportunity has enabled the WA Government to fast-track its renewable energy target by 10 years.

“If we kept 2040 as our target, we were going to be laggards rather than at the forefront. We want to have 10% of our reticulated gas being hydrogen by 2030,” she said.

“In the same way the Renewable Energy Target in Australia really drives the development of solar and wind, in our view, to have this target here is really going to drive the early stages of hydrogen production until the point it can stand on its own.

“Across the State there are at least 30 renewable hydrogen projects and proposals, some of them differ in levels of sophistication and readiness, but it is really extraordinary to see the amount of activity. The [hydrogen] industry is an important part of trying to decarbonise our economy, but it is also giving us enormous opportunities when we start looking at becoming a serious manufacturer.

“Traditionally our problem in minerals processing and a lot of manufacturing has been the cost of energy here in WA. The gas reservation policy we introduced in 2007 is really now making us very competitive with the Eastern States, but we believe the renewable hydrogen industry is the things that is going to make us internationally competitive.”
As one of Australia’s largest gas distribution and infrastructure businesses in Australia, AGIG has taken the lead on assessing the technical and financial feasibility of blending hydrogen into its existing gas assets.

AGIG Chief Executive Officer Ben Wilson said currently all of the company’s pipelines were full of natural gas, but before the end of the calendar year, AGIG would be blending renewable hydrogen into its network for the first time in Adelaide. This will be followed by blending renewable hydrogen in the Gladstone network in Queensland in 2022.

“Customers like using gas as it is reliable and great for heating, but they also expect us to do more to decarbonise. Hydrogen is good for customers because it delivers lowest cost decarbonisation and also retains the benefits of gas that customers love – the flame and the reliability,” Mr Wilson said

“Hydrogen is good for the gas networks and our employees, and it is also good for Australia as it develops a new industry, new jobs and growth with potential export opportunities.”

The reason for hydrogen’s cost competitiveness against electricity in generating heat is linked to the scale of gas in energy terms. For example, in Australia largest gas market of Victoria, the gas network delivers three times as many joules as the electricity network.

If you were to move all of that heat demand off the gas network and move it to the electricity network, even allowing efficiency difference you would effectively need to at least double the capacity of the electricity network to cater for it.

“That would cost an astronomical amount and it is much cheaper to do it via hydrogen if you can, so it is good for customers as well as for the networks. Finally, it is also good for Australia as a whole. All of these brilliant opportunities the WA Government is looking to support depend on us getting started and blending into the network is the best start-up use case,” he said.

“This is because customers do not need to do anything different for us to blend up to about 10% hydrogen, so you can build scale as 10% hydrogen in the network is a lot of hydrogen. It is a great anchor use case to then help unlock these further opportunities.”

The gas sector led by a number of key organisations such as Energy Networks Australia, Australian Pipelines and Gas Association, Gas Energy Australia, Gas Appliance Manufactures Association of Australia, Australian Petroleum Production and Exploration Association and the Australian Gas Industry Trust published a document called “Gas Vision 2050”, outlining what it predicted at that stage to be the three time horizons for hydrogen gas transition. The document forecast the period 0-5 years to be focused on R&D and studies, with the view of reinforcing hydrogen as a technically feasible alternative. In October 2020 “Gas Vision 2050” was updated to reflect the rapid progress made since the original publication.

“Three years ago, batteries were a ‘thing’, hydrogen was not a ‘thing’. Hydrogen is now a thing, so that first stage is ticked off. Now we move into the second stage, which is hydrogen blending. By 2030, we want every gas network in Australia to be on 10% hydrogen.

“We call that ‘Hydrogen is Plan A’ because if we achieve that there is no longer a debate about how we decarbonise heat – is it hydrogen or electrification – hydrogen will be Plan A. Then in the 2030s, we want to start the full-scale transition to 100% hydrogen in the gas networks, so then we fully decarbonise. We want to achieve that by 2040 – that is Gas Vision 2050.

“So, how are we doing? We are now doing, we are no longer talking, we are now doing, with multiple projects now under way around Australia.”

Michael Cairnduff More from author

Michael is a trusted government relations and public affairs adviser. He is the Director of Cannings Purple's Government Relations team and has a high level of experience within Australia’s key export sectors including resources, energy and agriculture as well as in the infrastructure industries that support those developments.

Michael provides specialist advice and facilitation support to public company boards and senior private company executives on government and stakeholder engagement; issues and reputation management; and public communications. He also plays an active advocacy role on behalf the key sectors within which his clients work.

Michael has 22 years of professional experience in technical communication and has a thorough understanding of existing heavy industries and downstream processing, as well as market trends and future capabilities as businesses in these sectors embrace new projects and technology to reduce their carbon footprint.

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