With over 50 years of experience consulting on and designing hydrogen facilities, Black & Veatch is ideally positioned to support industry operators to create scalable, bankable green hydrogen projects both now and in the future.
Global attention on the green hydrogen industry means that Australia – with its natural abundance of natural resources – needs to accelerate its development of the industry to become a world-leading green hydrogen producer.
According to Black & Veatch’s Vice President and Director Australia Pacific, Mick Scrivens, emerging industries, like green hydrogen production, go through a pattern of ‘forming, norming and storming’.
“Australia is in the forming stage right now,” he says. “But we’re not being slow about it. Every other day of the week there’s an announcement about a new opportunity in the hydrogen space.”
With large and consistent investment in green hydrogen, competition for innovation across many projects is intense.
Black & Veatch’s regional hydrogen expert Chetan Joshi says that the interest in the industry is due, in part, to the limited resources required to produce green hydrogen.
“All you need to produce green hydrogen is solar, wind and water,” he says. “For countries that have limited access to natural resources, it promises potential energy independence.”
In February this year, the Australian government announced that it would review its 2019 National Hydrogen Strategy, which details the nation’s vision for a clean, innovative, safe and competitive hydrogen industry. The Department of Climate Change, Energy, the Environment and Water (DCCEEW) specifically states that the strategy aims to position Australia as a major global player in the industry by 2030.
“The world took notice of that,” says Scrivens. “Over the last few years, we’ve seen global companies, especially in Japan and Germany, setting up collaborative agreements on Australian projects.”
He says that, with its abundance of natural and renewable resources, Australia is a key element in other countries’ decarbonisation efforts.
“Australia offers one of the highest solar radiations in the world – and we’re capturing that energy in a form that can be transported – hydrogen,” he says.
Black & Veatch has situated itself exactly where the innovations are occurring. As part of the Ammonia Energy Association, as well as the Australian Hydrogen Council, the company is actively participating in the discussion around the future of the industry.
“It’s these collaborative bodies that are putting out publications and determining what industry participants are thinking – they help form the nucleus of what is required for a fully operating hydrogen industry,” says Scrivens.
Overcoming green hydrogen production challenges
Challenges need to be overcome to meet the goals set out in the National Hydrogen Strategy.
“We know that around 40 percent of the CAPEX (capital expenditure) for a hydrogen plant is spent on electrolysers,” says Joshi. “It’s unlike solar farms, for example, where the panels – the actual equipment required to generate the resource – cost around 70 per cent.”
The reason this creates a challenge for the industry is that investments, research and design also need to focus on developing the appropriate infrastructure, transport and storage solutions.
“To get to the storming stage, the hydrogen economy needs to scale up to a point where the cost of technology, like equipment, comes down,” says Scrivens.
Continuing to use solar as an example, rooftop solar went through a similar process where investment and interest resulted in competition which, in turn, created innovations that made the technology cheaper and more readily accessible.
Developing strategic decarbonisation roadmaps facilitate the evaluation of existing and emerging technologies, and help steer decision-making over multiple years. For example, to lower capital costs and risks of projects, one approach is to consider developments that leverage existing infrastructure and nearby customers, such as electric transmission lines or gas pipelines to transport the hydrogen. Developers can also take advantage of different renewable sources including hydropower.
Another direction is to maximise the integration of co-located facilities to create multiple revenue streams. This direction for development considers the creation of large hydrogen hubs where multiple, large industrial offtakers – steel makers, power generator, rail hubs and others potential customers – co-locate, reducing the need to convert the hydrogen into other forms for long distance transport.
Black & Veatch’s long history with hydrogen production equips it with the experience and expertise to help clients push into the storming phase.
“We have a client in the US who is constructing a hydrogen electrolyser facility that will store the hydrogen in subterranean salt caverns,” says Scrivens. “They plan to use the hydrogen as a blend in power generation – a small blend at the start, with a goal to scale it up to a larger percentage, possibly 100 per cent. They’ve started construction, they have an end date and an operational date. The client is in the storming phase.”
Joshi says the industry is still looking at low-hanging fruit. He anticipates that over the next ten years operators will move their attention past green hydrogen and start directing it towards other products – namely ammonia.
“Most ammonia is produced through grey or brown processes –like steam methane reforming – which have emissions that need to be offset,” says Scrivens. “So green ammonia would be seen favourably on the global market.”
With a wide variety of uses – from agriculture to mining explosives – ammonia is not only a valuable resource, but also significantly easier to transport compared to hydrogen, which needs to be cooled and kept at -260 C to be liquified and shipped.
“Once green ammonia production reaches a critical scale, we’re likely to see large investments in creating a circular hydrogen economy,” says Joshi. “As the technology develops, operators’ attention will turn to developing more complicated plants and projects, especially once confidence in the early plants has been established.”
Joshi proposes that hydrogen production has other benefits that are yet to be fully capitalised on.
“It’s not just hydrogen that is created through electrolysis,” he says. “There is a lot of oxygen created in the process, and there’s a revenue stream that can be generated from that. If correctly utilised, this can benefit the plant and reduce or offset the overall cost dynamics.”
“Many industries are likely to benefit from the growth in the green hydrogen and ammonia industry,” says Scrivens.
Hydrogen hubs presently being developed will likely supply, as a fuel, affordable decarbonised energy from large renewable resource or hydrogen itself. Other potential benefits include deploying hydrogen as a feedstock in hard-to-carbon-abate cement, steel, chemical, and petrochemical industries; deploying hydrogen as a zero-carbon fuel in fuel-cell vehicles; and producing synthetic fuels like methanol, gasoline, and environmentally friendly aviation fuel using hydrogen.
With the Federal government allocating land for future facilities, and a massive financial injection into early development projects, Black & Veatch is ideally placed to help operators establish hydrogen project viability and bankability as Australia establishes itself front and centre on the global stage.
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