Australian Gas Infrastructure Group (AGIG) owns and operates one of Australia’s largest gas infrastructure businesses with operations across every mainland state and the Northern Territory supplying over two million customers. We talk to its CEO Ben Wilson about its vision to be the leading gas infrastructure business in Australia by delivering for customers, being a good employer, and being sustainably cost efficient.
Can you tell us a bit about what AGIG’s focus is right now and what the major projects you’re working on are?
At AGIG, we are investing heavily in the long-term interests of our customers, the energy industry and the environment. We have several hydrogen projects in the pipeline which include:
- Our first hydrogen blending projects at Hydrogen Park South Australia (HyP SA) and Hydrogen Park Gladstone (HyP Gladstone);
- Detailed plans to introduce hydrogen in gas networks through the Australian Hydrogen Centre;
- Assessment of how hydrogen can be introduced into the Dampier to Bunbury natural gas pipeline (DBP) in Western Australia; and
- We are also pursuing biomethane opportunities.
What are the big opportunities that hydrogen presents for Australia, and in what forms?
As the global energy sector is transforming, governments and industry around the world are moving to enable an environment for the emerging hydrogen industry to grow and thrive. Australia is well placed to be a major hydrogen player.
The 2019 National Hydrogen Strategy had forecast a new hydrogen industry could contribute $1.7 billion and 2800 jobs to the national economy by 2030. Benefits will include jobs, contributing to a cleaner environment, prosperity, and enhanced fuel security.
The Strategy also identifies blending hydrogen in Australia’s gas networks as a priority area to build this new industry. Our gas networks are hydrogen ready and key to stimulating early large-scale hydrogen demand growth without needing new infrastructure for hydrogen’s use, and projects can be done now while developing other markets like transport and export.
Tell us a bit about HyP SA and now HyP Gladstone–what is the aim of these projects and do they have an end date/milestone you hope to reach with them?
Located at the Tonsley Innovation District in Adelaide’s southern suburbs, HyP SA will produce renewable hydrogen using renewable electricity and water to demonstrate its use as a carbon-free source of energy.
The renewable green hydrogen will be blended with natural gas at volumes of up to five per cent to supply approximately 700 nearby homes and businesses via the existing gas network.
When production commences later in 2020, HyP SA will deliver a lower emission gas to customers in South Australia. We are also targeting supply to other markets via tube trailers (long storage tubes on the back of semi-trailers) to industry and the transport sector.
HyP Gladstone continues AGIG’s hydrogen leadership by extending our renewable gas footprint into Queensland and delivering the first whole of gas network decarbonisation project.
Beginning production in the second half of 2022, HyP Gladstone 10 per cent renewable hydrogen blend builds on the five per cent supplied to customers from HyP SA and will be the highest volume of hydrogen delivered by an existing gas network. It will also be the first project to supply a renewable hydrogen blend to industrial facilities via the existing gas network.
Both projects are being delivered with strong support from the respective state government as key projects to unlock their wider hydrogen economy ambitions.
Can you tell us a bit about the AGIG’s role with the Australian Hydrogen Centre and what the AHC’s main goals are?
AGIG and the energy sector generally have a clear vision for a low carbon future using renewable and carbon neutral gases such as hydrogen and biomethane.
We need to deliver on this vision if Australia is to meet the national and state-based emissions reductions targets, whilst also maintaining reliability of energy supply and providing the lowest cost to our customers.
In late 2019, we established the Australian Hydrogen Centre (AHC) along with a number of partners to deliver feasibility studies on blending 10 per cent renewable hydrogen into towns and cities and plans for a 100 per cent hydrogen future. It will also share key learnings from HyP SA to pave the way for other renewable gas projects.
The AHC would not be possible without the support of the Australian Renewable Energy Agency and the founding members: South Australia’s Department for Energy and Mining; Victoria’s Department of Environment, Land, Water and Planning; gas and energy infrastructure businesses, AGN (part of AGIG) and AusNet Services, and leading renewable energy companies, ENGIE and Neoen.
Is it in AGIG’s vision to one day use 100 per cent hydrogen and biomethane gases in its pipelines?
HyP SA and HyP Gladstone’s operations at volumes of up to five per cent and 10 per cent respectively mark the first step to lowering carbon emissions. Elsewhere in the world, hydrogen is already blended with natural gas and used in homes and businesses. For example, the UK will begin supplying a 20 per cent hydrogen blend in 2020.
We are also pursuing more projects, aiming to blend up to 10 per cent hydrogen across the other regions we currently serve, before considering 100 per cent conversion. Enabling this transition is work we have been undertaking for years to ensure our gas distribution network is ‘hydrogen-ready’ including replacing our older infrastructure with polyethylene pipes.
Ultimately our transmission infrastructure may also be used to transport blends of, or even, 100 per cent hydrogen if required and our work such as our DBP Feasibility Study will determine this.
Developing technical plans to eventually move to 100 per cent hydrogen is a focus of work by the AHC.
What do you think needs to be done on a policy level to further Australia’s hydrogen industry?
The National Hydrogen Strategy and other state-based hydrogen strategies recognise the need for private and public sectors to work together to create, test and prove Australia’s hydrogen supply chains.
The Strategy outlines how governments and industry will work towards building a large-scale hydrogen industry. Examples of support provided since are $70 million in grants from ARENA by $300 million in loans from the Clean Energy Finance Corporation.
Access to funding such as that provided by ARENA has been key in delivering cost efficient renewable electricity in Australia and similar funding needs to continue to be made available to the renewable gas sector.
In addition to financial support, policy and regulatory reform to enable and support low carbon gas blending and stimulate demand are crucially needed in the short term to enable commercial scale hydrogen projects to proceed, and in the medium term to establish a thriving renewable hydrogen industry in Victoria.
Over time this support will allow the industry to achieve the cost reductions seen in the solar and battery sectors though the scale gas networks. As such, we think there is merit in renewable gas blending targets, which enable governments to achieve their decarbonisation objectives and to seize the potential benefits of the emerging hydrogen economy.
Is there anything else you would like to add?
Beyond our own learnings, our work also emphasises collaboration and total transparency to ensure full engagement with all stakeholders and consumers as we enhance the nation’s energy mix.
Additional examples include our partnership with the Future Fuels Cooperative Research Centre, and the Australian Industry Energy Transitions Initiative. Both centres have received Australian Government support to deliver industry focused research, development and demonstration partnership enabling the decarbonisation of Australia’s energy mix and hard-to-abate industries.