The last few weeks have seen announcements from around the world that continue to position the renewable energy sector as the catalyst that will power the strongest possible recovery from a pandemic-induced global crisis.
The European Commission is pledging to align its Covid-19 economic strategy with the European Green Deal strategy in a historic post-pandemic recovery plan which includes an accelerated push to renewable energy.
Aligned with this, Germany’s National Hydrogen Strategy pledged €9bn to promote hydrogen production and use to accelerate the development of technologies that replace fossil fuels in high temperature industrial processes.
In Australia, the Technology Investment Roadmap announcement on 21st May represents the Australian Federal Government’s most recent and significant commitment to invest in low emissions technologies to grow the economy and accelerate Australia’s climate action agenda.
This is all extremely encouraging and signals that governments are serious about an approach that prioritises investment in renewable energy to help reboot key sectors such as manufacturing.
Additionally, there have been dozens of hydrogen strategies released by national and regional governments and countless reports by consultancies spanning engineering, economics, and science.
With the inquiry, debate and analysis of hydrogen taking place across the globe, it is a good time to take stock of the direction of the industry and some of the assumptions surrounding the sector.
Utilising existing infrastructure
Despite misconception, the reality is that, with efficient and economic deployment of hydrogen, coal-fired power stations and industrial assets can be given a new lease on life. Instead of allowing these plants, with decades of useful life before them, to become stranded assets, they can be retrofit with hydrogen technologies that boost their lifespan in a sustainable way, therefore giving certainty to their management, workforce and investors.
As well as giving a secure future for existing electricity generation infrastructure, the retrofitting of hydrogen power to existing assets will also ensure the ongoing life of the transmission, transportation and other industrial infrastructure associated with the power facility.
Indeed, this certainty of operation will see other co-located industrial facilities flourish, including hydrogen-generating facilities, desalination plants and high energy users such as data centres. Once the application of hydrogen for industrial purposes is proven, a sharp rise will occur in the demand for hydrogen, driving its costs down rapidly to well within the ambitious cost-per-kilogram goals set by various governments.
Export of hydrogen versus domestic use
Many government policies particularly in renewables rich countries such as Australia seem focussed on export as the primary business model for the hydrogen sector. A number of private business ventures have also done the same. But the hydrogen opportunity is much greater than exports.
Not only can we ship it to other countries, policy makers and entrepreneurs need to focus on and invest in the domestic uses of the green hydrogen they harvest as a potential replacement fuel to drive the industrial base of the economy.
Additionally, hydrogen can – when combined with the right power generating technologies – be used to add the necessary stability and power on demand. It can also be used to provide continuous heat and electricity for industrial and residential purposes.
Interestingly, many developing nations are seeing the value in this and in the scalability of hydrogen energy systems as a solution for bringing constant and sustainable energy to remote and difficult locations.
Stimulating demand, flattening the cost curve
Rescuing stranded electricity assets, and providing power solutions for the developing world will, quite significantly, stimulate demand for hydrogen and drive hydrogen down the cost curve.
The series of announcements pertaining to renewable energy provide welcome guide rails for relationships between governments and the emerging hydrogen sector worldwide.
However, the hydrogen sector is developing faster and more broadly than government policies and consultancies envisage.
To avail of all the opportunities hydrogen offers, it is imperative governments continue their energetic leadership of the sector. This includes direct engagement with investors in hydrogen supply chain, judicious investment in government programs and development of regulation for the hydrogen industry.
The work does not have to wait till 2045 or 2060, the technology to create demand and drive down the cost of hydrogen is here now.
About the author
Andrew Horvath is Global Group Chairman of Star Scientific, where he oversees the business strategy and development behind the company’s breakthrough technology, HERO®.