Expert reveals Australia’s hydrogen early adopters

Rendered image of a hydrogen molecule (tasmania)
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Australia has enormous opportunity to become a green hydrogen world leader, according to Lana Van Wyk, principal at Hatch Advisory—a multidisciplinary leader in delivering engineering, operational and development projects in the metals, energy and infrastructure industries.

With billions in government funding expected to be released in a decade, an expert in metals, infrastructure and energy reveals early adopters—the metals refining, ammonium nitrate manufacturing and hydrogen transport and refuelling sectors—are in an outstanding position to leverage state and federal funding programs.

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To build Australia’s domestic green hydrogen economy, billions of dollars in public investment is needed over the next 10 years to receive several times that value in return from the private sector. The federal government has already begun investing in projects, but early adopters will also need willing and engaged state governments to ensure projects get over the line.

Between 2018 and 2020, ARENA, the Australian Government’s renewable energy investment arm, funded $40 million for hydrogen projects. A further $300 million in federal government hydrogen funding was announced in 2020, and more recently an announcement of $275 million in support for hydrogen hubs in 2021. A recent Australian Hydrogen Council white paper recommended $20 billion of hydrogen project support is needed over the next decade[1].

With investment beginning to roll out, there are a number of industries best placed to leverage this funding to begin forming the domestic hydrogen industry.

Apart from academic research programs into innovative technologies, the first movers who have gained funding for hydrogen projects are industry players in metals refining and ammonium nitrate manufacturing. These industries already have an existing use case for hydrogen to integrate electrolysers with existing brownfield operations. We’re also seeing funding for hydrogen transport and refuelling projects due to market testing and proof of concept studies by vehicle engine manufacturers.

Early adopters are companies that are most likely to build hydrogen electrolysers. If we look at who can build electrolysers, it could be remote defence sites with 100 per cent availability requirements and high landed energy costs. We could see high-end net zero leaders as first movers, such as Alphabet and Atlassian, who may want to have 100 per cent net zero energy supply to their facilities and outlets, requiring energy storage systems with greater capabilities than existing battery storage systems.

Early adopters could also include water treatment facilities with a demand for pure oxygen or domestic pipeline operators who traditionally cannot supply gas due to regulation but can produce hydrogen and use their own pipelines. This would provide an additional revenue stream using their existing infrastructure.

I predict companies and agencies such as Atlassian, BOC, Origin Energy, Jemena, FMG, Trafigura, Woodside, Wesfarmers, Rio Tinto Aluminium and Government fuel security departments will be the first movers.

However, only suitable industries should be exploring green hydrogen at this early stage and reveals the common characteristics that define early adopters.

Not all industries have the right set of criteria to be the first to help drive hydrogen demand and reduce overall costs. Firstly, there needs to be an existing prohibitive cost of energy, either natural gas or diesel fuel delivered to remote areas, such as Mount Baw Baw. If we look at the mining industry in the Pilbara, truck and train fleets consume around 5000ML per year of diesel in very remote areas. Companies like Incitec Pivot have long been vocal about the existential threat of high east coast gas prices on their long-term future. There’s an opportunity here for pipeline operators such as AGIG (Australian Gas Infrastructure Group) and Jemena to inject hydrogen into domestic gas pipelines at high price points.

For hydrogen to be viable, a just-in-time supply model is needed that does not require substantial amounts of expensive hydrogen storage. This is to ensure they can produce hydrogen at the rate it is consumed. They would need to have access to low-cost renewable energy supply and electrical infrastructure to ensure supply reliability. Companies also need to have existing mature technology in place for a transition to hydrogen.

Successful proponents must demonstrate to their boards that they have community acceptance, customer agreements, sophisticated commercial arrangements, and technology partnerships in place. In addition to those, a range of development, planning, environmental and land approvals are required.  

I believe companies that don’t receive government funding would need a strong investor able to implement sophisticated commercial arrangements for supply, technology, and engineering and design risk.

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Behind the early adopters will be the fast followers. After the first adopters, we could see energy companies, such as Origin Energy, leveraging Australia’s duck curve to generate and store hydrogen at a time when electricity supply exceeds demand, and where there is a hydrogen customer adjacent to the facility. 

Another fast follower could be those industries in long distance hauling, such as supermarket chains, or Toll and Linfox, who will use hydrogen as a replacement fuel to travel 800km on just 100kg of hydrogen.

[1] Australian Hydrogen Council, 2021, ‘Unlocking Australia’s hydrogen opportunity’:

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