Page 4 - AsiaElec Week 35

AsiaElec COMMENTARY AsiaElec

Australia well-placed to exploit

green hydrogen potential

Economies of scale and the falling cost of renewables make Australia well placed to exploit
its future green hydrogen potential, writes Richard Lockhart

AUSTRALIA SIGNIFICANT and continued cost reductions Using data supplied by the International Renew-
to solar PV and wind technologies, as well as cost ables Energy Agency (IRENA), the authors point
WHAT: reductions to electrolysers, will mean that the out that “typical up-front capital costs for solar
The cost of green cost of green hydrogen in Australia could reach PV installations fell by 79% from 2010 to 2019
hydrogen could fall to A$3 A$3 ($2.2) per kg in the near future. and by 24% for onshore wind generators.”
per kg in the near future. New research from the Australian National Furthermore, “the levelised cost of electricity
University said that added that a “stretch goal” of (LCOE) for large-scale solar PV installations in
WHY: A$2 per kg will likely come into reach, “possibly 2020 is between A$41-60 per MWh in Australia,
Falling costs for rapidly.” according to Crawford School of Public Policy’s
renewables and The report comes as Australia is providing Centre for Climate & Energy Policy estimates …
electrolysers will make more federal support for green hydrogen pro- and A$49-64 per MWh internationally, accord-
green hydrogen cheaper duction projects. ing to the IRENA auction database.”
than gas-derived fuel With renewable electricity costs falling dra-
Green hydrogen matically, the next focus is the efficiency and
WHAT NEXT: Researchers from the university’s Crawford capital cost of electrolysers – the device which
More funding and School of Public Policy’s Centre for Climate splits water into hydrogen and oxygen using
investment support is & Energy Policy investigated whether green electrical energy.
needed to roll out more hydrogen, which is made by electrolysis using As with renewable electricity, though to a
production facilities in electricity from renewable sources, could be much lesser degree, capital costs of electrolys-
order to take advantage produced at a lower cost that hydrogen produced ers have also seen some reduction in recent
of falling costs from fossil fuels. The main cost factors creating years, and the authors believe that electrolyser With renewable
a barrier to affordable green hydrogen are the manufacturing costs could fall “substantially as
cost of the electricity and the cost of electrolys- demand for electrolysers increases.” electricity
ers, together with capacity utilisation rates, the The authors show that for every A$10 per costs falling
report’s authors, T Longden, F Jotzo, M Prasad MWh decrease in electricity costs there is an
and R Andrews, found. attendant decrease in hydrogen production dramatically, the
However, the report noted that the costs of costs of A$0.47 per kg.
wind and solar have fallen dramatically over the Taking into account a series of other factors, next focus is the
last few years and are expected to fall even fur- the 2020 estimates for green hydrogen produc-
ther in the years ahead. tion from solar (capacity factor 30%) ranged efficiency and
“In many parts of the world, wind and solar from A$3.12 per kg to A$3.82 per kg. capital cost of
power is already the cheapest form of energy for Looking forward, however, and based
any new-built generating capacity. Its average on a mean cost of solar PV in 2030 of A$33 electrolysers
cost is cheaper than electricity from natural gas per MWh, hydrogen costs could decrease to
in many places, including Australia, and is often between A$2.25 per kg and A$2.94 per kg.
cheaper than wholesale prices on the grid,” the
report says. Economies of scale
Therefore, green hydrogen is now becoming Things get even better when onshore wind gen-
more competitive in relation to so-called black eration is involved, with its higher capacity fac-
hydrogen, which is made using fossil fuel elec- tor of 45%. Hydrogen production costs ranged
tricity, especially when you take into consider- from A$3.10 per kg to A$3.60 per kg in 2020 and
ation fossil fuel-generated hydrogen’s “highly A$2.70 per kg to A$3.20 per kg in 2030 – though
emissions-intensive” nature. 2030 figures do not anticipate a dramatic mean
Even when coupled with carbon capture and cost of wind as they do solar.
storage (CCS), the authors point out that fossil With lower range projections for wind elec-
fuel-generated hydrogen still suffers from “sig- tricity by 2030 of A$40 per MWh (compared
nificant remaining carbon dioxide emissions.” with around A$50 per MWh), green hydrogen
Falling costs production costs could fall to A$2.40 per kg to

P4 www. NEWSBASE .com Week 35 02•September•2020