Green pivot: can Australia master the hydrogen trade?
Australia is in a bind. It is at the heart of the pivot to clean energy: it contains some of the world’s best solar irradiance and vast potential for large-scale carbon capture and storage; it showed the world the path forward with its stationary storage flexibility at the much vaunted Hornsdale power reserve facility; and it moved quickly to capitalise on low-carbon hydrogen production. Yet it remains one of the largest sources for carbon-intensive energy exports in the world. The extractive industries are still delivering thermal coal for power generation and metallurgical coal for carbon-intensive steel making in Asian markets. Even liquefied natural gas’s green credentials are being questioned. Are these two pathways compatible? The treasury and economy certainly benefit. But there is a huge opportunity to redress the source of those funds and jobs, while fulfilling the aspirations to reach net zero emissions by 2050. In our estimates, the low-carbon hydrogen economy could grow to become so substantial that 15% of all energy may be ultimately ‘carried’ by hydrogen by 2050. It is certainly needed to keep the world from breaching 2°C. Can Australia master the hydrogen trade? It is believed that it has a very good chance. Blessed with first-mover investment advantage, and tremendous solar and wind resourcing, Australia is already on a pathway to become a producer of green hydrogen below US$2/kg by 2030. How might it then construct a supply chain to compete in the international market with established trading partners and end users ready to renew old acquaintances? Its route is assessed to mastery of the hydrogen trade, analyse critical competitors for end use and compare costs with other exporters of hydrogen.