Demystifying the hydrogen hype

‘The Emerging Role of Hydrogen in Energy Transition’ was the topic of a recent WSP Future Ready Innovation Lab webinar featuring subject matter experts: Bernadette Fitzgerald, Director Sustainability; Andrew Ward, Principal Engineer – New Energy; and Simon Blake, Maritime Lead – Bridges, Maritime & Structures.

The sustainability perspective

Bernadette began the discussion, “Why are we talking about hydrogen? Because it is a zero-carbon fuel when burned with oxygen. When used in a fuel cell – charged hydrogen ions generate electricity, much like a battery.

“Currently 98 per cent of hydrogen is made from fossil fuels.

“Most of the world’s hydrogen is produced through the CO₂ intensive processes of Steam Methane Reforming (SMR) and coal gasification – respectively identified as ‘grey’ and ‘black-brown’ hydrogen. When coupled with a Carbon Capture and Sequestration (CCS) process, hydrogen could conceivably be generated at a near zero Greenhouse Gas (GHG) emission intensity – although this process is still in its infancy.

“When produced through an electrolysis process that makes use of renewable electricity, the outcome is ‘green’ or CO₂-neutral hydrogen. However, electrolysis does use a significant amount of electricity and water – where to source this water is a major sustainability consideration.”

The table below summarises the main hydrogen generation technologies and each associated GHG emissions and water consumption requirements.

What is hydrogen and is it clean?

“The SMR process is a material carbon emitter, accounting for almost one per cent of total Australian GHG emissions.

“Currently hydrogen is mainly used for ammonia production in Australia. Traditionally the ammonia is produced through the SMR process, producing a ‘grey’ ammonia. Accelerating the transition to ‘green’ ammonia, produced using hydrogen derived from renewable energy, provides potential to position Australia as a leading global producer and exporter.”

According to the Australian Renewable Energy Agency (ARENA) global hydrogen production is relatively stable at around 55 million tonnes per year. Currently, non-energy uses of hydrogen dominate consumption, with production of ammonia accounting for around half of hydrogen demand. Use of hydrogen for energy purposes is estimated to be between one and two per cent of total consumption.

Bernadette continues, “While increased electrification of the global economy is still considered the key to rapid decarbonisation, there continues to be sectors that will be ‘hard to abate’ through electrification alone. In the Hydrogen Energy Market Study recently completed for the Clean Energy Finance Corporation, hydrogen was considered to represent the most credible pathway to the decarbonisation of sectors like international aviation and maritime shipping, in addition to production processes like steel manufacturing that lack scalable electrification options.

“In 2019, these sectors together were responsible for 30 per cent of Australia’s GHG emissions.”

Is green hydrogen the fuel of the future?

Using green hydrogen as either a feedstock or energy source is currently not economically viable; however, in the near-term commercially attractive uses could include transport applications like line haul trucking and return to base vehicles like buses, remote power, ammonia production and refining applications.

Bernadette adds, “We see the following mechanisms as key to driving down green hydrogen supply costs: the continuation of renewable energy price declines; improved efficiency in electrolysis processes, and cost-effective water supply options. Access to low cost finance and government policy levers will drive greater commercialisation production processes. It will also be imperative that projects are delivered with high environmental outcomes to drive the social licence required to operate these hydrogen production facilities.

“Towards 2050, the range of sectors where hydrogen may be commercially viable extends to include steel manufacturing; power generation; high grade industrial heating; regional and international aviation; shipping; and blending (hydrogen) into the existing natural gas networks. Some of these sectors, particularly those that are difficult to directly electrify and which have a very high dependency on hydrogen for decarbonisation, may adopt earlier through willingness to pay a green premium, receive grants, concessional finance, or mandatory regulation as we move towards net zero as a nation.”

Andrew concurs, “Green hydrogen is unmatched as a green chemical feedstock in the production of ammonia for fertiliser in agriculture. It’s also a key contender for the zero-carbon production of steel. In addition, it is uniquely positioned to provide backup for the variable renewable grids of the future and as strategic energy storage to resilience for unplanned major power outages or shortfalls.

Image Source: Australia’s National Hydrogen Strategy

“We are at the start of the learning curve for hydrogen production. Although our Future Ready Innovation Lab audience strongly indicated an opinion of ‘steady progress’ in the positioning of green hydrogen by 2035, there must be a ‘demand side’ reality check. Green hydrogen will need to out-compete incumbents and other green alternatives on a case by case basis.

“Green hydrogen production is currently twice as expensive as natural gas with a current ‘best case’ of AUD4 per kilogram. It will need to get down to at least AUD2 per kilogram by 2030 to be competitive with other types of energy production.

“This can be achieved through incentivised economies of production as has been seen with solar energy. But it needs to be noted that other sources such as batteries are already carving out a significant market share in certain sectors and may beat out hydrogen before it gains significant traction. However, hydrogen is best placed to target the hard to electrify sectors.”

“In Australia, electricity for the production of renewable hydrogen can optimally be sourced from dedicated onsite renewable energy and/or through contracted grid supplied renewable energy,” explains Bernadette. “With extensive access to renewable energy sources, this is a natural advantage for global export potential. As acknowledged with the recent announcement of a bilateral alliance with Germany.”

Opportunities for export versus complexities in transportation

ARENA outlines that hydrogen energy can be stored as a gas and delivered through existing natural gas pipelines, but these may not exist where they are needed. Hydrogen can also be transported on trucks and in ships if liquified, compressed or converted into a chemical intermediary such as ammonia. The Opportunities for Australia from Hydrogen Exports report calculated that global demand for hydrogen exported from Australia could be over three million tonnes each year by 2040, which could be worth up to AUD10 billion each year to the economy by that time.

Andrew says, “Australia has a critical role to play in forming the global hydrogen market. As a major supplier we can shape how and where hydrogen will be used around the world. Setting a target for Australia to reach net zero GHG emissions by 2050 or sooner would definitely improve our credibility in this regard.”

“Australia comes to the forefront in hydrogen energy production and large-scale exporting because of the opportunity we have in utilising our vast sources of available renewables,” says Simon. “One of the complexities is maximising the efficiency of the shipping transportation solution to overseas markets.

“Like Liquified Natural Gas (LNG) ammonia can be shipped in a refrigerated state; but Liquid Hydrogen (LH₂) requires cooling to much lower temperatures (-253ºC) for transport and the energy required to keep it that cold is significant, reducing its viability. The world’s first and only LH₂ carrier operates out of Australia currently, transporting hydrogen produced from brown coal to Japan.

“Hydrogen can also be shipped in the form of ammonia, which is commonly transported today as a liquid at more reasonable temperature conditions (-33°C). However, ammonia requires an additional process at the receiving end to turn the ammonia back into hydrogen, this process is called ammonia cracking. Liquid Organic Hydrogen Carriers (LOHCs) are also emerging technologies that enable hydrogen to be shipped at ambient temperature and pressure. LOHCs are compounds that have a hydrogen saturated and unsaturated state. Think of it like a battery, where the liquid is charged with hydrogen at the production end and then the hydrogen is extracted at the receival end when the uncharged liquid state is then sent back for re-charging. There are a number of LOHCs being promoted, but the technology is yet to be proven at scale.  

“Compressed Hydrogen (CH₂) is a further future option for transporting hydrogen. A pilot scale CH₂ vessel is being proposed by a company in Australia, but it is yet to begin construction. CH₂ shipping is being promoted as being cost effective against other shipping options for short to medium transit distances, say 2,000 to 4,500 nautical miles.

“With all shipping options, technology for using either hydrogen or ammonia as the fuel for the vessels are also being developed.”

The diagram below details the technical barriers and opportunities in relation to shipping hydrogen for export.

“As well as these technical challenges, the social, environmental and safety issues of transporting theses type of products via the ocean must be considered and satisfactorily resolved,” continues Simon. “Each product has its own set of safety and environmental considerations that will need to be properly considered in each case. For some of the newer products like CH₂ and LOHCs, more work is needed to prove these at scale.

“Choosing a definitive future for carrying the product is a challenge, each situation will be different suiting one solution over another. A lot of studies have been undertaken to compare options for ammonia transport over the whole logistics chain, but outcomes differ considerably. In my opinion a lot more work needs to be done to demonstrate a suitable pathway across the logistics chain and this needs to be project specific. Furthermore, to get the scale of cost decline required to be competitive as an alternative fuel, technology advancement is across every part of the logistics supply chain from production, to shipping and then receival.

“In our work on evaluating several hydrogen production and export projects in Australia, the location of the port is an important consideration to the viability of the export scheme and is often a key driver. The irony is that although remote areas have abundance of renewables, this doesn’t improve the viability unless they are located close to the port as the losses generated reduce the overall project’s feasibility significantly.”

Demystify the hype on hydrogen by identifying the merits and challenges

WSP is currently working with a range of clients to explore the challenges and opportunities of hydrogen.

Specifically, we’re playing a role in projects that are supporting hydrogen production from upstream infrastructure; production and transport; through to liquefaction; conversion and storage; and export.

For more information on hydrogen, contact us below. 

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