Australia plans to be a big green hydrogen exporter to Asian markets – but they don’t need it

It is available in its latest budget, the federal government has promised hundreds of millions of dollars to expand Australia’s green hydrogen capabilities.

Green hydrogen is made by electrolysis of water, powered by solar and wind electricity, and it’s key to the government’s “technology not taxes” approach to meeting its climate target of net-zero emissions by 2050.

The government is aiming to create a major green hydrogen export industry, especially to China. JapanAustralia signed an export agreement in January for the product. But our latest researchThis suggests that the likely scale may be exaggerated.

We show Japan that it has enough solar energy and wind energy to be self sufficient in energy and doesn’t need to import fossil fuels nor Australian green hydrogen. Indeed, Australia as a “renewable energy superpower” is far from a sure thing.

Japan is blessed with plenty of sun and wind

“Green” hydrogen could be used to generate electricity and also to form chemicals such as ammoniaSynthetic jet fuel.

Hydrogen fuel is one of the low-emission technologies in the federal budget This will help you share.Over A$1Billion This includes$300 million to produce clean hydrogen in Darwin, as well as liquefied natural gases.

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Australia plans to be a Top-three hydrogen exporterBy 2030, Asian markets will be covered by green hydrogen. The idea is that green hydrogen will help replace Australia’s declining coal and gas exports as countries make good on their promises to bring national greenhouse gas emissions down to zero.

Many of these discussions are based on the false assumption that overcrowded jurisdictions like Japan and Europe lack sufficient solar and wind resources.

Our recent studyWe examined the future role of renewable power in Japan and simulated a scenario where Japan has a 100% renewable electricity supply.

We found that Japan has 14x more offshore and solar energy potential than it needs to supply its current electricity demands.

Electrifying nearly everything – transport, heating, industry and aviation – Doubles or triples the demand for electricityJapan still has five to seven times the solar and offshore wind energy capacity than it needs.

Japan can eliminate fossil fuel imports by building enough wind and solar farms without increasing energy prices. This eliminates three quarters its greenhouse gas emissions, and eliminates the security risk of relying on foreign energy suppliers.

Japanese energy is also less expensive

Our study included an hourly energy balance model based on representative demand data and 40 year of historical hourly wind and solar meteorological data.

We foundThe levelized cost of electricity in Japan’s energy system dominated by solar and winds is US$86-110 (A$115-147)/ megawatt hour. Levelized cost is the standard method of costing electricity generation over a generator’s lifetime.

This is similar to Japan’s 2020 average spot market prices (US$102 per megawatt hour) – and it’s about half the cost of electricity generated in Japan using imported green hydrogen from Australia.

It is therefore much more expensive than producing electricity from local solar or wind power.

Essentially, it’s because 70% of the energy goes unusedConverting Australian solar and wind energy to hydrogen compounds, shipping it back to Japan, then converting the hydrogen into electricity or motive power in cars.

Hydrogen is therefore an energy source. Not likely to become a major export industry.

How about exporting sustainable chemicals. To produce synthetic aviation fuel, ammonia and other chemicals, hydrogen atoms are needed.

These products require hydrogen, carbon and oxygen. They are all easily available in unlimited quantities from both water and air. Japan can easily make its own sustainable chemicals, rather than import hydrogen or finished chemicals.

The Japanese cost advantage for sustainable chemicals is less than for energy, so there may be some export opportunities.

What about other countries?

Only a few countries have large-scale fossil fuel reserves, but most countries have plenty solar and/or winds. Because most countries are able to harvest energy from their own resources and trade in it less, the future decarbonised planet will have much less energy trade.

Solar and wind both are included three quartersEach year, there are more power stations being built around the globe than ever before because they produce less energy than fossil fuels. Globally, around 250 gigawatts of solar and wind power are being installed each year. Double every three to four year

Densely populated coastal areas – including Japan, Korea, Taiwan, the Philippines, Vietnam and northern Europe – have There are vast offshore wind resourcesTo complement onshore solarWind.

What’s more, densely populated IndonesiaThere are enough calm tropical waters to power the entire globe. floating solar panels.

Will international markets need Australian energy for when the sun isn’t shining, nor the wind blowing? Most likely not. Most countries have the resources to supply their energy needs reliably and continuously without having to import Australian products.

This is because Most countriesAll countries, including Japan and Australia, have a vast capacity. Pumped hydro off the river, which can store energy to balance out solar and wind at times when they’re not available. Additionally, batteries and stronger internal transmission networks can help.

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Australia’s prospects

Get rid of fossil fuels, and electrify almost everything with renewables Reduce greenhouse emissions by 35%This reduces the risk of extreme weather change. It eliminates security risks from relying on other countries for energy, as illustrated by Europe’s dependence on Russian gas.

It will also reduce energy costs and eliminate oil-related warfare, oil leaks, cooling water usage, oil spills and coal mine fires.

Australia’s coal and gas exports must decline to zero before mid-century to meet the global climate target, and solar and wind are doing most of the heavy lifting through renewable electrification of nearly everything.

However, our research shows that even though Australian solar and winds are superior than most, they may not be sufficient to offset the additional costs and losses associated with exporting hydrogen for chemical production or energy supply.

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The export of Australian renewable energy has a huge potential. Export of ironIn this instance, hydrogen produced by solar and wind could replace coking charcoal.

This allows Australia to export iron ore rather than iron. In this instance, the raw material (ironore), solar and wind are all found at the same place: the Pilbara.

Although hydrogen will be an important part of the future global clean economy it will be used primarily for chemical production and not energy production. It’s important to keep perspective: electricity from solar and wind will continue to be far more important.