Hydrogen is a hot topic in the global energy sector – and Australia could be a key player in the emerging international market.1
SETTING THE AGENDA: THE AUSTRALIAN HYDROGEN LANDSCAPE
A recent report commissioned by the Australian Renewable Energy Agency (ARENA) examined the hydrogen export opportunities for Australia, estimating that by 2040 global demand could be valued at between $2.6 billion and $13.4 billion.2 The Australian hydrogen industry could have an associated domestic economic contribution of over $4 billion by 2040, as well as opportunities for over 7,000 full-time equivalent jobs.3
OPPORTUNITIES FOR AUSTRALIA
The development of a ‘hydrogen economy’ is attractive in a resource-rich country like Australia. Whether for domestic or export consumption, this potentially low emissions energy alternative could leverage Australia’s existing international competitive advantages.
At a snapshot, hydrogen may present an opportunity for Australia in the following ways:
- Hydrogen production: maximise cheap electricity to produce hydrogen, with a focus on ‘green hydrogen’, with the ‘levelised cost of hydrogen’ produced by electrolysis expected to range between $2.29-$3.10/kg by 2025.4
- Energy system optimisation: capitalise on existing infrastructure by using hydrogen manufacture to provide grid services to the electricity network and also integrating supply to the gas network, where trials blending hydrogen and gas are already underway.
- End use innovation: commercialise diverse ‘end use’ applications for commercial, industrial and residential users, including hydrogen fuel cell vehicles, heating and power, with hydrogen in transport expected to accelerate over the next 10 years.5
- Social license to operate: developing global best practice for managing environmental impacts, safe handling and community acceptance of hydrogen.
These opportunities are considered below.
STATE GOVERNMENT MOMENTUM
Australian governments are currently investigating the role of hydrogen in Australia’s energy transformation to a lower emissions economy – this includes consideration of the legal and policy landscapes required to grow the ‘hydrogen economy’. Various state governments have released policies and ‘roadmaps’ to encourage investment in hydrogen, including Victoria, Queensland, Western Australia and South Australia.
A NATIONAL HYDROGEN STRATEGY
On 1 July 2019 the ‘Hydrogen Working Group’, established by the Council of Australian Governments' (COAG) Energy Council and chaired by Chief Scientist Alan Finkel AO released a series of issue papers for public consultation in the next stage of developing a National Hydrogen Strategy (Issue Papers).
The purpose of the Issue Papers is to consider key issues in the development of policies and action in identified hydrogen opportunities. In this Legal Briefing we provide a brief overview of barriers and government initiatives identified in the Issue Papers.
The Hydrogen Working Group will release the draft National Hydrogen Strategy for public consultation in September 2019 and will present the final strategy to COAG Ministers in late 2019.
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ENDNOTES
- ACIL Allen, Opportunities for Australia from Hydrogen Exports, August 2018.
- ARENA report.
- ACIL Allen, Opportunities for Australia from Hydrogen Exports, August 2018.
- ACIL Allen, Opportunities for Australia from Hydrogen Exports, August 2018, p 30.
- Hydrogen Council (2017), Hydrogen scaling up, a sustainable pathway for the global energy transition. p 26-27.
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