New Zealand unveils hydrogen vision

New Zealand unveils hydrogen vision

The New Zealand Government has today unveiled its national vision for hydrogen.

Aiming to achieve a net zero carbon economy by 2050, this ambitious goal requires the transition away from an energy system which relies heavily on hydrocarbons (oil, coal and gas) to one that is based on renewable energy sources.

Hydrogen is poised to fulfil its potential as a clean alternative to hydrocarbons in the global pursuit of decarbonisation to address climate change.

New Zealand is one of several countries investigating the most appropriate applications and transition pathway for hydrogen within their energy system and economy, making best use of their existing natural, social, cultural, human and financial resources.

Today, Energy and Resources Minister Megan Woods announced the Green Paper – A Vision for Hydrogen in New Zealand – that lays out the role hydrogen can play in New Zealand’s economy.

While hydrogen produced from fossil fuels and industrial processes (brown, blue and grey) may play a role in the transition of New Zealand’s regions and existing industries, the government considers there is greater opportunity for New Zealand in exploring the use of its renewable energy to produce green hydrogen as an alternative fuel for domestic use and for export.

Global momentum can be seen in the recent policy announcements by governments in South Korea, China, Japan, France, Norway, California, Australia and others – as well as New Zealand – regarding green hydrogen’s investigation and use in demonstration projects in energy, industrial and transport.

“For a country blessed with abundant renewable energy, the ability to convert our clean electricity into green hydrogen which can fetch a premium on global markets is a major economic opportunity,” Woods said.

“There’s already clear international interest in hydrogen sourced from New Zealand. Last year, we signed a world-first memorandum of co-operation with Japan to encourage collaboration between us on hydrogen initiatives.”

“We’re already seeing significant investment in hydrogen locally, with projects like the joint venture between Ballance Agri-Nutrients and Hiringa Energy to produce commercial-scale green hydrogen in Taranaki and Tuaropaki Trust’s partnership with Japanese multinational Obayashi Corporation to construct a pilot hydrogen production facility using geothermal electricity near Tāupo.”

Hydrogen production, transportation and storage technologies are advancing rapidly and renewable energy systems are on the way to cost parity with fossil fuel-based systems.

Today, green hydrogen production costs are challenging (electricity costs factor significantly in the economics of electrolysis) and higher than brown hydrogen produced from natural gas which is coupled with the release of the greenhouse gas CO2.

Predictions vary over exactly when green hydrogen is expected to reach cost parity with fossil fuel-based hydrogen. The IEA, in its 2019 report (20), predicts that the cost of producing hydrogen from renewable energy could fall by 30% by 2030 as a result of the declining cost of renewables and scaling up of hydrogen production.

Other challenges to developing hydrogen in the short to medium term could be overcome by technological advances and investment, enabled and supported by appropriate government policy platforms.

“The paper is part of a renewable energy strategy work programme which is also looking to address barriers to investment in new renewable energy as we work to reach 100% renewable electricity by 2035 and to transition to a clean, green and carbon neutral economy by 2050,” Woods explained.

“This Green Paper discusses how hydrogen could fit into New Zealand’s wider energy and transport system.”

“The paper builds on existing work, identifying the possible applications, benefits and barriers to the uptake of hydrogen in our energy, transport and export sectors.”

“It explores the role that hydrogen could play in different pathways to decarbonisation, and energy resilience.”

“Today’s launch is another step in the government’s plan to tackle the long-term challenge of reducing emissions to fight climate change.”

“It sits alongside the government’s decision to end new offshore oil and gas exploration, our investment in a National New Energy Development Centre in Taranaki, backing cutting edge renewable energy technology, greater support for low emissions vehicles and helping businesses to invest in low emissions industrial processing.”

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