Creating a Green Hydrogen Future - Part 1: The fuel for a decarbonised world

In the first part of our Green Hydrogen series, Shane Gowan - Energy Transition Lead and Phil Robson - Energy and Manufacturing Manager for Beca, discuss Green Hydrogen and why it’s seen as a potential low carbon replacement for fossil fuels. Also explored are opportunities for the development of lucrative Green Hydrogen export industries in both Australia and New Zealand.
 

There is no doubt the need to keep global warming to no more than 1.5 degrees Celsius above pre-industrial levels (in accordance with the Agreement recently ratified at COP26) has become a global political imperative, that is driving fresh research and investment into decarbonising primary energy.

As an international community, we must move away from our reliance on fossil fuels and decarbonise our energy sources. Meeting this huge challenge dictates that low or no carbon replacements for energy sources such as coal, diesel, petrol, jet fuel and ultimately natural gas need to be found.

Through the creation of a world-scale Green Hydrogen industry in both Australia and New Zealand (two nations with abundant renewable energy resources), we have a real opportunity to develop energy independence, as well as potentially lucrative export markets.

However, to achieve this, a coordinated national energy strategy in both nations is required to ensure sufficient renewable electricity is available to create Green Hydrogen, and to do so at a price that attracts the necessary capital investment for production, storage and distribution facilities. This will require strong leadership and vision to make the timely changes needed to position Oceania as a world leader in energy decarbonisation.

Hydrogen and Green Hydrogen

So why is hydrogen and in particular green hydrogen so attractive as an alternative energy source?

Hydrogen is the most abundant element in the Universe. It is present on Earth not as molecular hydrogen itself, but most commonly as a water molecule (H₂O) or attached to carbon in the form of various hydrocarbon substances such as coal, natural gas and crude oil. Therefore, hydrogen as a gas on its own, needs to be manufactured.

An advantage of hydrogen is that on a weight basis (i.e. energy per KG), it is relatively energy intensive. In fact, when measured in this way it has double the energy intensity of natural gas which means that it’s a highly versatile energy source. Hydrogen is currently produced in significant quantities on a global scale with current demand for pure hydrogen estimated at around 70 million tonnes per year, mostly for use in the production of refined oil products, chemicals and fertiliser manufacturing.

95% of hydrogen produced today is manufactured through steam reforming of natural gas or coal gasification. Carbon dioxide (CO2) is a by-product of these processes, however only a small portion of this CO₂ is captured for use in products such as fizzy drinks, with the remainder emitted into the atmosphere.

As this hydrogen is then used as part of an industrial process, it is defined as “Grey Hydrogen”. If the CO₂ is captured via carbon capture and sequestration (CCS), where the CO₂ is stored in underground geological formations - then the hydrogen is called “Blue Hydrogen”.

So, what is “Green Hydrogen” in that case? Essentially it refers to hydrogen that is produced without the emission of CO₂ - by splitting a water molecule into hydrogen and oxygen through electrolysis, using renewable electricity.

The different forms of hydrogen as classified in terms of colour are described in the diagram below:  

Green Hydrogen in New Zealand

New Zealand is in the enviable position of having our electricity generated by predominantly renewable sources, (approximately 80% is generated by a combination of hydro, geothermal, solar and wind). But this alone is not enough for the country to meet its carbon reduction commitments, even with the government targeting 100% renewable electricity generation by 2030.

One of the key challenges we face in reducing and ultimately eliminating fossil fuel-based energy sources is that a high intensity energy source that is carbon free needs to be commercially viable and available at scale. Hydrogen as a replacement for fossil fuels in a wide variety of applications is rapidly gaining momentum on a global basis.

The New Zealand Government has developed a renewable energy strategy work programme, with one of eight workstreams being the development of a green hydrogen strategy. Under this workstream, a hydrogen vision was developed in 2019 and a hydrogen roadmap is under development.

The Green Hydrogen Vision Paper states that “Green hydrogen has the potential to play a significant role in our energy system and could play an important role in decarbonising parts of our economy.”

Green Hydrogen in Australia

Australia is also well positioned to take advantage of the opportunities this massive shift towards decarbonisation presents, particularly with this island continent blessed with abundant solar and wind resources –  key ingredients required to produce Green Hydrogen.

Sensing the opportunity to develop a lucrative new export market that complements its existing minerals and metals sector (which is responsible for approximately 8% of GDP), in 2019 the Council of Australian Governments (COAG) endorsed a National Hydrogen Strategy that aims to position the nation as a major player by 2030, with a “clean, innovative, safe and competitive hydrogen industry”.

Whilst the Federal Government has ambitions to advance a Green Hydrogen industry in Australia, the private sector is already taking action, including utility provider TransGrid, who operate much of the electricity transmission network across New South Wales and the Australian Capital Territory.

Their recently launched ‘Energy Vision’ document sets out a pathway for how Australia can become a “clean energy superpower” by 2050 through “exporting zero-emissions green hydrogen, metals, and other products and services to the world”. It also shares internal modelling that projects the cost of Green Hydrogen production will fall below $2/KG by the early 2030’s and as low as $1/KG by 2050, at major large-scale production sites across the east coast. Whilst there is still some way to go in developing large-scale, lucrative export-oriented Green Hydrogen industries across the Oceania region, there is no doubt the appetite for investment in this new technology exists across both the public and private sectors. There’s also the immense promise Green Hydrogen holds as a clean alternative to traditional fossil fuels and a means to fuel this huge global decarbonisation shift that’s now taking place across the developed world!

About Beca

Beca is one of Asia Pacific’s largest independent advisory, design and engineering consultancies. After a century of operation, we’ve grown from a family-owned business to one of the most progressive, client-centric professional services consultancies in the region. Beca employs more than 3,300 employees across 21 offices and has delivered projects in more than 70 countries.

In December 2020, Beca won the Deloitte Sustainable Business Leadership award, which recognises businesses that are working towards the creation of long term environmental, social and economic value. Beca’s commitment to sustainability includes pledging to reduce its carbon emissions by 32% by 2030 and working with clients to enable them to achieve their own sustainability aspirations.

Beca is also a member of the New Zealand Hydrogen Council and we are involved in a number of Green Hydrogen projects across the Asia Pacific region.

If you’d like to pursue a Green Hydrogen project yourself, we can make it happen – from business case development, feasibility studies, decarbonisation planning through to project implementation. Contact us today to see how we can help!