Reduction of costs necessary for Australia to exploit green hydrogen potential

According to Rystad Energy, most of those electrolysers are in the pilot phase, and the largest operational facility is the relatively minuscule 1.5 megawatt facility at the Hydrogen Park in South Australia.

They are also owned by everal players including big miners BHP, Fortescue and Anglo American, gas company Woodside, financial firm Macquarie Capital, and electricity companies including Origin, Jemena, Stanwell and Pacific Hydro.

However, in spite of the vast pipeline of projects, Rystad renewables analyst David Dixon, said the viability of these and future hydrogen assets would depend upon massive cost reductions.

As he explains, it cost around $A5 to produce one kilogram of green hydrogen using renewably-powered electrolysers. What is more, the federal government’s target of producing green hydrogen at a cost of $A2 per kilogram would depend on costs falling 75%.

In order to achieve those cost reductions, Mr. Dixon said that the cost of the electrolysers ust fall, as well as the cost of solar and wind energy. Lastly, green hydrogen producers must also find a way to get maximum usage out of their electrolysers.

However, the outlook is not so hopeful for wind and solar.

What is more, recently Australia and Singapore agreed to establish a $30 million partnership to accelerate the deployment of low emissions fuels and technologies like clean hydrogen to reduce emissions from ships and ports.

The Australia-Singapore partnership is part of Australia’s $565.8 million commitment to build new international technology partnerships that make low emissions technologies cheaper and drive investment in Australia-based projects to create up to 2,500 jobs.

Under the partnership, each country will commit up to $10 million over five years to fund industry-led pilot and demonstration projects, with at least $10 million of additional investment expected to be leveraged from the industry.