Any one of the green hydrogen hubs identified in South Australia’s new Hydrogen Export Prospectus could at least double the current installed capacity of solar and wind farms in South Australia, South Australian Premier Steven Marshall said last week.
The state already has some 2 GW of combined large-scale wind and solar and has committed to becoming net 100% powered by renewable energy by 2030. It aims to export excess renewable generation to other National Electricity Market (NEM) states via a new interconnector known as Project EnergyConnect, and to other nations as hydrogen or ammonia.
“Hydrogen is shaping up as a game changer in the fight against climate change and our aim is to get the cost down so that it’s a commercially attractive option for heavy transport, power generation and use by industry,” said Dan van Holst Pellekaan, South Australia’s minister for energy and mining.
The prospectus was heralded in the South Australian Hydrogen Action Plan, which was published in September 2019. It has been researched and developed, along with an interactive modelling tool, by KPMG and engineering solutions consultancy WSP.
It identifies a number of favourable configuration options to develop competitive hydrogen export supply chains within South Australia and builds out four configurations in detail. They include green hydrogen hubs in Port Bonython, Cape Hardy/Port Spencer, and Port Adelaide. There is also the possibility of building a blue-hydrogen hub, using natural gas extracted from the Cooper Basin, processed in the vicinity of Moomba, and exported through Port Bonython.
Each of the green hubs builds on Renewable Energy Zones identified by the Australian Energy Market Operator (AEMO). They all have port access within 75 kilometers of renewable resources, and are calculated to produce hydrogen at AUD 3.50 (US$2.48) per kilogram, using electrolysis driven by renewable energy, with an estimated cost of between AUD 38 and AUD 47 per megawatt hour. The blue hydrogen option comes in at AUD 2.5/kgH2, with an estimated cost of gas at AUD 8 per gigajoule.
The included supply chain costs are production, transport, downstream processing, and export terminals. The outcomes benefit from current record low interest rates, which reduce the cost of capital.
The Port Bonython green hub assumes 2.3-6.5 GW renewable energy development to feed electrolyzers of 1.2-2.5 GW. The Cape/Hardy Port Spencer green hub assumes 1.1-61 GW of generation to feed 0.6-2.6 GW of electrolyzer capacity. The Port Adelaide green hydrogen hub would use existing renewable infrastructure, with energy acquired via power purchase agreements, to kickstart the renewable hydrogen economy, although production will be limited due to the current potential capacity of the grid.
The South Australian government has also identified support mechanisms that can assist the budding industry to overcome potential development barriers. Global demand for hydrogen has been forecast by global analysts to increase more than eightfold by 2050, as the world seeks to decarbonize industrial processes and transport fleets.
Analysis has targeted exports of hydrogen by 2030, and accelerated deployment is expected to drive down the costs of supply-chain technologies, as it has for the solar and battery industries. The overall level of accuracy of the free on board (FOB) calculated costs in the Hydrogen Export Prospectus are estimated to be in the order +/- 40%, due to the current immaturity of the hydrogen industry and the breadth of the study.
South Australia already sees a commercial market for green hydrogen produced at its Hydrogen Park South Australia site in Tonsley Innovation District, even in advance of the 1.25 MW proton exchange membrane electrolyzer (Australia’s largest to date) being fully commissioned. In October, BOC signed an MOU to install a compressor at the site and take excess hydrogen for delivery by tube trailer to its customers in South Australia and potentially in Western Australia.
South Australia’s Hydrogen Action Plan also integrates with its Electric Vehicle Action Plan, which is currently under development. The government says it includes a role for fuel cell vehicles that use hydrogen rather than batteries to power passenger vehicles, and includes the infrastructure to support the refueling of a substantial fuel-celled fleet.
“This new prospectus and modelling tool cements our credentials as a world-class place to do business and a leading renewable hydrogen producer and supplier to the world,” said van Holst Pellekan.
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