The government predicts green hydrogen exports and domestic use could be worth up to A$50 billion within 30 years, helping the world achieve deep decarbonisation.
But how close are we really to a green hydrogen industry? And which states are best placed to host it? My research shows that as of next year, and based on where the cheapest renewables are, the best places to produce green hydrogen are far north Queensland and Tasmania.
As ever more renewable energy pours into our grid, this picture will change. By the end of the decade, the north Queensland coast could become the hydrogen powerhouse. By 2040, dirt-cheap solar should make inland areas across New South Wales, Queensland, Victoria and South Australia the lowest cost producers.
Why is there so much buzz around green hydrogen? In short, because it offers us a zero emissions way to transport energy. Take cheap renewable energy and use it to split water into hydrogen and oxygen using an electrolyser. Store the hydrogen on trucks, ship it overseas, or send it by pipeline. Then use the hydrogen for transport, manufacturing or electricity production.
All the technology exists – it’s the cost holding the industry back at present. That’s where Australia and its wealth of cheap renewable energy comes in.
Making hydrogen is nothing new – it has a long history of use in fertiliser production and oil refining. But until now, the main source for hydrogen was gas, a fossil fuel.
In the last few years, however, there has been a sudden surge of interest and investment in green hydrogen, and new technology pathways have emerged to produce cheap green hydrogen. As global decarbonisation gathers steam, Japan, South Korea and parts of Europe are looking for clean alternatives to replace the role fossil fuels have played in their economies.
Australia is exceptionally well placed to deliver these alternatives, with world-beating renewable resources and ports set up for our existing fossil fuel exports, such as coal and LNG.
In 2019, we sold almost $64 billion of black coal, with most going to Japan, South Korea, India and China. As these countries decarbonise, the coal industry will shrink. Green hydrogen could be an excellent replacement.