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Hydrogen ” Asia Pacific’s fuel of the future

With countries such as Singapore, Japan and Australia heavily backing hydrogen’s potential, it is only fitting to explore hydrogen’s impact on the energy transition, as well as its wider potential across APAC.

According to the Hydrogen Council, hydrogen technologies could provide 18% of the world’s total energy needs by 2050 and may power more than 425 million vehicles worldwide by that time. This is a reason to explore hydrogen’s impact on the energy transition, as well as its wider potential across APAC.

This article was originally published as part of the PEI print edition in 
Smart Energy International Issue 4-2020
Read the full PEI section, the full combined digimag or subscribe to receive a print copy.

Hydrogen technology typically comes in three main colours, namely: Green hydrogen, which is produced from water electrolysis and renewable energy and is carbon neutral; Blue hydrogen, which incorporates carbon capture and storage into the steam methane reformation processes, reducing carbon emissions; and Brown hydrogen, which is produced from fossil fuels and accounts for around 95% of global production.

Hydrogen is considered one of the main drivers of the entire energy transition. This transition refers to the decarbonisation of energy supply and a shift from fossil to renewable energy sources. This has placed a lot of pressure on the power system from both the generation and demand sides, as grids that were designed decades ago simply can’t cope with the variability of inputs from different sources. The solution to that pressure is flexibility and hydrogen is generally seen as a likely source of flexibility for the whole electricity system.

Hydrogen use cases

Hydrogen has a multitude of uses even though some argue that it will take many years before the power source becomes economically viable at scale.

Hydrogen is converted quite easily to and from electricity and it can be stored for long periods with minimal losses. It plays a prominent role in the Asia Pacific region as

ࢀ¢ industrial feedstock ” hydrogen is used to produce industrial products such as ammonia, important for the farming and mining sectors, especially in Australia;

ࢀ¢ grid stabiliser ” hydrogen electrolysers can ramp up and down their load to match the output of renewable energy like wind and solar;

ࢀ¢ transport fuel ” hydrogen fuel cells offer an alternative to batteries for powering larger electric motors;

ࢀ¢ power generation ” hydrogen can be fed through a gas turbine or fuel cell to generate electricity.

The use of hydrogen engines is becoming more popular, with dual-fuel engines allowing the use of hydrogen with natural gas, some engines accommodating up to 25% hydrogen. Increasingly, we also see the use of hydrogen buses and electric vehicles which now have greater range and coverage. In the maritime space, hydrogen is becoming a niche product with engines and vessels geared to decarbonizing the shipping sector.

“Hydrogen is generally seen as a likely source of flexibility for the whole electricity system”

From an Australian perspective, hydrogen’s domestic applications have been especially prominent in blending into natural gas networks. The fuel source is expediting the region’s decarbonisation and the country has done well to adopt a systemic approach to building hydrogen projects at scale.

APAC’s journey

All countries within the APAC region share the same objective when it comes to hydrogen, which is to complement the electricity network and accelerate the energy transition agenda.

The technology journey started in 2018 when significant amounts of funding were made available for research and development. This was followed by many discussions with focus groups and a variety of stakeholders, to educate and ensure buy-in from the market. Subsequently, in 2019, Australia set up a Clean Energy Innovation Hub, which invited participation from investors like Toyota with its advanced fuel cell technology. Siemens has pledged 5GW of renewables development in Western Australia, providing the scale for green hydrogen.

This started a process resulting in many policy and practical developments to secure hydrogen’s future. For example, Minister for Resources and Northern Australia Matt Canavan and Japan’s Minister of Economy, Trade and Industry, Hiroshi Kajiyama, signed a Joint Statement on Cooperation on hydrogen and fuel cells to demonstrate a commitment to cooperating on the deployment of hydrogen.

Also, in Australia, the Clean Energy Finance Corporation launched a $300 million Advancing Hydrogen Fund, designed to support the growth of a clean, innovative, safe and competitive Australian hydrogen industry. The grant programme aims to demonstrate the technical and commercial viability of hydrogen production at large-scale using electrolysis.

Finally, the Australian Renewable Energy Agency (ARENA) together with the Australian Government announced $1.28 million in funding, for the establishment of the Australian Hydrogen Centre. The project will investigate blending hydrogen into existing natural gas pipelines in South Australia and Victoria. Also, $995,000 in funding was granted to Yara Pilbara Fertilisers Pty Ltd to support a feasibility study for the production of renewable hydrogen and ammonia for fertiliser production in Western Australia’s Pilbara mining region.

China shows great potential for market growth, especially as increased use of renewables has led to greater grid instability. In Thailand, hybrid systems have become more popular, encouraged by policy reform. Centralised generation is mixed with smart distributed generation which presents a large renewable hydrogen market. Furthermore, the Thai government is encouraging electric transport, which opens up the market for hydrogen fuel cells.

Decarbonisation is complex and achieving a transformed energy system will require a variety of solutions.

There are instances where blue hydrogen makes perfect sense, together with carbon capture with storage. In other instances, green hydrogen will work best, driving down costs through the use of electrolysers.

It boils down to minimising intermittency and cost while maximising flexibility and adopting the business models to accommodate these system changes.

In terms of market opportunities, Australia presents a hub for renewable hydrogen and blue hydrogen, due to the active mining, agriculture and ammonia sectors. It’s about finding the right investment opportunity.

Market hindrances

Lack of policy ” The use of hydrogen can be empowered by government policy encouraging generation and effective transportation.

Transportation ” Transporting hydrogen between countries is expensive and challenging. There is currently only one vessel in the world that can transport hydrogen, with a capacity of 170 tons.

DNV GL is working on several concept designs for vessels able to transfer more than 500 tons of hydrogen.

Cost ” Hydrogen storage is costly and possibly the fuel’s greatest criticism. The use of electrolysis and alkaline neutralizers at scale will drive down cost. However, it will be almost a decade before we see true commercial viability. Using a levelised cost approach that includes investments, fuel and carbon costs is preferable.

What’s next

Hydrogen will have a significant role to play in the energy market, particularly given its diverse uses and applications.

It is likely to be some time before hydrogen becomes a powerhouse in the energy market. However, it’s clear that with a collaborative approach to market development, the technological advances that are currently taking place in the renewable energy sector, and the reduced costs of producing green energy, hydrogen will be commercially viable in next to no time.

Pamela Largue
Pamela is a senior content creator and editor and has been a part of the Clarion content team for over seven years. She specializes in international power and energy-related content.