Major milestone for Victoria’s HESC project

An artists' impression of the HESC Port of Hastings

The Hydrogen Energy Supply Chain (HESC) Pilot Project has announced the commencement of operations at both Victorian sites of its world-first integrated supply chain.

HESC Project Partners, together with the Australian, Victorian, and Japanese Governments and distinguished guests, marked both milestone at the gasification and gas refining facility in the Latrobe Valley.

The HESC Pilot is developing a complete hydrogen supply chain, creating hydrogen gas via the gasification of Latrobe Valley coal, transport to the Port of Hastings for liquefaction, and shipment to Japan.

The commencement of the Australian arm of operations, using Latrobe Valley coal to produce hydrogen, is a world-first and a great leap forward for the country’s ambition to be a key player in the emerging global hydrogen economy.

The HESC Pilot is being delivered by a consortium of experienced industry partners from Japan and Australia including Kawasaki Heavy Industries, J-POWER, Iwatani Corporation, Marubeni Corporation, AGL and Sumitomo Corporation, supported by the Victorian, Australian and Japanese Governments.

Hirofumi Kawazoe, from Hydrogen Engineering Australia (Kawasaki’s subsidiary company based in Melbourne), said the progress of the HESC Pilot places Victoria and Australia at the forefront of the global energy transition to lower emissions via the fuel of the future, clean hydrogen.

“The next major HESC Pilot development will be the first shipment of hydrogen between Australia and Japan, aboard the world’s first purpose-built liquefied hydrogen carrier, the Suiso Frontier. The eyes of the world will be on Victoria, when shipments of liquefied hydrogen commence this year,” Mr Kawazoe said.

The HESC Pilot is proving it is possible to take Latrobe Valley coal and safely produce and transport hydrogen. It is yielding data and insights that feed into the pathway to commercialisation.

Jeremy Stone from J-POWER Latrobe Valley said the HESC Pilot has created approximately 400 jobs across the Victorian supply chain.

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“A commercial-scale HESC can leverage and build local skills, potentially creating thousands of jobs. This will include long-term employment in a new clean energy industry for the people of Gippsland,” Mr Stone said.

“Latrobe Valley has a proud history powering Australia and today we celebrate the next generation of energy technology in the region.”

The Victorian and Commonwealth Governments’ CarbonNet Project is developing in parallel with HESC and is essential for the hydrogen pilot’s commercialisation. If both projects are commercialised, CO2 captured during hydrogen production would be transported and stored by CarbonNet using carbon capture and storage (CCS) technology. Rather than entering the atmosphere, CO2 emissions will be safely stored in rocks 1.5 kilometres beneath Bass Strait, similar to the way oil and gas has been trapped naturally for millions of years. 

A commercial-scale HESC project could produce 225,000 tonnes of clean hydrogen annually with carbon capture and storage.

“We estimate our project could reduce CO2 emissions by 1.8 million tonnes per year, equivalent to the emissions of some 350,000 petrol cars,” Mr Stone said.

The Victorian Government says the project has the potential to provide clean hydrogen with domestic use-cases, as well as kick-start the emergence of a new, global export industry with huge local economic benefits. 

The HESC Project will also help develop the infrastructure and highly skilled workers that are crucial ingredients for the emergence of an Australian hydrogen industry.

The HESC consortium thanked its staff and contractors in both the Latrobe Valley and Hastings for their work to date, including overcoming the many challenges COVID-19 presents.

“Without the support of the local communities, the Victorian, Australian and Japanese Governments, this project would not be possible,” Mr Kawazoe said.

There has however been some doubts cast on the feasibility of producing liquid hydrogen from coal, with one expert saying the economics don’t add up.

Globally recognised catalysis scientist and entrepreneur Professor Thomas Maschmeyer has raised questions about proposals to generate liquid hydrogen from brown coal fields by gasification in the wake of news that Victoria’s Yallourn power plant would cease operation.

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Professor Maschmeyer, who is the recipient of the 2020 Prime Minister’s Prize for Innovation said, “At this stage I cannot believe that the economics or environmental aspects for this proposal stack-up and cannot see the case for support with public money.”

“There does not exist any commercial scale capture of carbon dioxide of the type required for such a venture and the overall capital and operational expenditure for the process as a whole will be very high,” he said.

“Gasification is very energy intensive at the best of times. Gasifying brown coal is unheard of. All the water, which makes up 50 percent of brown coal, has to be evaporated first for no gain. The inorganic sandy part then forms slag in the reactor, leaving not much organic matter to gasify per tonne of as-mined coal.

“The extracted gas then has to be cleaned and pass another reactor to generate a pure hydrogen stream, which needs to be separated from the CO2.

“Following this, the costs of capturing, compressing and transporting the CO2 generated for reinjection into a well will be very significant in terms of capital expenditure, operating costs, energy used and associated CO2 emissions.

“All of this means this project is a very early idea and should be scrutinised in terms of simple energy and mass balances (i.e. efficiency and waste generated) as well as economics to enable an appraisal for its feasibility.”