Australia's H2 Trade May be Worth US$ 90 billion in 2050: WoodMac

Jun 17, 2021 11:44 AM ET
  • Low-carbon hydrogen can end up being a US$ 50 billion to US$ 90 billion export industry for Australia in 2050, states Wood Mackenzie.

Australia prices continually in the leading tiers for solar irradiance as well as has vast capacity for largescale carbon capture as well as storage space (CCS). It has actually showed the world the course forward with its stationary battery storage space flexibility at the much-vaunted Hornsdale power reserve facility as well as has actually moved quickly to capitalise on low-carbon hydrogen production.

With an expanding project pipe, gauged at 2.94 gigawatts (GW) of named eco-friendly hydrogen electrolyser ability as of 2020, Australia is currently the globe's second largest proprietor of hydrogen projects after the Netherlands. Simply this year alone, Australia's pipeline of advanced and also early stage project advancements has actually expanded a more 45% to 4.25 GW.

Talking at the APPEA seminar today, Wood Mackenzie Head of Markets and Transitions, Prakash Sharma claimed: "Australia's key export markets-- Japan, South Korea, China, India as well as Europe-- are large carbon emitters and web importers of natural deposits. Their import demands have progressively raised in the past twenty years and currently typical at more than 70% of their overall power need. As these countries increase environment ambitions, they will require to source clean energy to decarbonise steel, chemicals, concrete, sturdy movement, shipping as well as power generation.

" In a net-zero emissions globe, a steady and also reliable source of low-carbon hydrogen supply comes to be crucial since it is difficult to inform how a given molecule of hydrogen has actually been generated. An assurance of beginning is for that reason critical to allow for very little environmental influence, i.e., carbon leakage. Specification also help with danger analysis and also clear market pricing. Australia stands to profit as regulations of hydrogen delivery, transport, storage as well as item quality are set as well as approved globally.

" Australia's share in the around the world traded market for low-carbon hydrogen or its by-products can reach 25-45 million tonnes (Mt) by 2050, equivalent to US$ 50 to US$ 90 billion in potential export profits."

Price competition continues to be an irritating factor; nevertheless, Wood Mackenzie believes there are pathways to competition for end-user sectors. Price reductions will be mostly driven by large-scale, automatic production of electrolysers, an increase in system size and also a decrease in eco-friendly power expenses.

The difficulty is figuring out the very best transportation approach for Australia's export supply chains. All three types of seaborne transport under consideration, liquid hydrogen (LH2), liquid organic hydrogen providers (LOHC) and also ammonia (NH3) have advantages and also challenges. The effective service provider selection depends on the end-use, purity and storage needs. As an example, LH2 is chosen if the end-use needs liquid or high-purity hydrogen such as flexibility applications. On the other hand, ammonia gains where it can be used straight as a feedstock preventing the cost of breaking NH3 back into hydrogen.

Sharma said: "Our exclusive hydrogen setting you back as well as energy change circumstance modelling show Australia's hydrogen supplied prices can drop below US$ 2/kg longer-term, making it competitive in all end-use cases in crucial markets of northeast Asia.

" We estimate ammonia would be the very first hydrogen-carrier in the export market helped with by Australia from mid-2020s. Low-carbon hydrogen demand in Japan as well as Korea gets to 30 Mt in 2050 with ammonia taking one-third market share on this path."

Although there is no expedition danger to eco-friendly hydrogen manufacturing, the export supply chain-- storage space, compression, transportation, decompression-- is currently made complex and incipient. The size of the reward for Australia depends on the rate as well as range at which global hydrogen market creates; the variety is large 73-- 145 Mt in 2050 and the opportunities are aplenty.

Sharma stated: "Our team believe Australia can get over hydrogen's logistical challenge like it successfully carried out in coal seam gas to LNG projects, automated trucks and remote-control mining procedures as well as large-scale CCS releases. Leveraging experience from hydrogen pilot programmes and greater investment in r & d, regular government support, collaborations and offtake arrangements from Japanese as well as Korean firms would be vital.

" This is a lifetime possibility for Australia to harness its renewable resource resources as well as end up being a leading player in the zero-carbon energy trade. It would certainly be difficult for huge Oriental economies to reach climate goals without clean power products from Australia."