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Australia, Japan begin operations of complete, integrated supply chain for hydrogen plant
23 March 2021Bernadette Lee
The Hydrogen Energy Supply Chain (HESC) pilot, an initiative of
the Australian and Japanese governments, began operations in the
Australian state of Victoria on 12 March, a milestone for the
project.
The HESC pilot, launched in 2018, is part of Australia's
national hydrogen strategy and involves developing a complete
hydrogen supply chain, from producing hydrogen gas from brown coal
in Victoria's Latrobe Valley via a coal gasification and
gas-refining process, transportation to the Port of Hastings for
liquefaction, and exporting the liquefied hydrogen to Kobe,
Japan.
"I believe the HESC pilot is a world-first complete, integrated
supply chain. Australia has been producing hydrogen at its
refineries from natural gas for a long time. This would be the
first collaboration of this type," said Logan Reese, research and
analysis associate director at IHS Markit in Brisbane.
The project proves it is possible to take Latrobe Valley coal
and safely produce and transport hydrogen, said the consortium
behind the project in a joint statement 12 March.
"It is yielding data and insights that feed into the pathway to
commercialization," it added.
The consortium includes AGL, Iwatani Corporation, J-POWER,
Kawasaki Heavy Industries, Marubeni Corporation, and Sumitomo
Corporation, with the support of the Victorian state, Australian
and Japanese governments.
First shipment
The next major development in the HESC pilot will be the first
shipment of liquefied hydrogen between Japan and Australia aboard
the world's first purpose-built liquefied hydrogen carrier, the
Suiso Frontier.
"The pilot project will contribute to growing Australia's
hydrogen industry. A successful pilot will be an important step
toward establishing a commercial hydrogen production and export
industry," said the Department of Industry, Science, Energy and
Resources of Australia.
The decision to begin commercial production of liquefied
hydrogen will be made later this decade, with operations targeted
to begin in the 2030s, according to the Department of Industry,
Science, Energy and Resources.
CarbonNet project
The CarbonNet project, an initiative of the Victorian and
Commonwealth governments, is being developed in tandem with the
HESC project, and is critical for the commercialization of the
hydrogen pilot, the consortium said in the statement.
"If both projects are commercialized, [carbon dioxide (CO2)]
captured during hydrogen production would be transported and stored
by CarbonNet using carbon capture and storage (CCS) technology.
Rather than entering the atmosphere, CO2 emissions will be safely
stored in rocks 1.5 kilometers beneath Bass Strait, similar to the
way oil and gas has been trapped naturally for millions of years,"
it added.
A commercial-scale HESC project could produce 225,000 metric ton
(mt) of clean hydrogen annually with carbon capture and storage,
the consortium said.
"We estimate our project could reduce CO2 emissions by 1.8
million mt per year, equivalent to the emissions of some 350,000
petrol cars," said Jeremy Stone, non-executive director of J-POWER
Latrobe Valley.
Helping Australia move toward lower
emissions
Hirofumi Kawazoe, general manager, Hydrogen Engineering
Australia, said the HESC pilot put Victoria and Australia at the
forefront of the global energy transition to lower emissions
through the use of clean hydrogen.
The Victoria government, on 26 February, released its Renewable
Hydrogen Industry Development Plan, which sets out how the state will
invest in the renewable hydrogen industry and the role it could
play in reshaping Victoria's economy in the aftermath of the
COVID-19 pandemic.
Concerns
But there are concerns about the HESC pilot project as well, one
of which is carbon capture.
"I know long-term plans would include offshore carbon storage;
it just wasn't clear if carbon was being captured from the
beginning. This is a very important point, given this project is
coal-based hydrogen," Reese said.
Other concerns are the quality of coal being used, particularly
because the Latrobe Valley is known for its low-grade coal, and
that the coal-fired generation is located in areas which have some
of Australia's highest carbon emitters, according to Reese.
National Hydrogen Strategy
Australia released its national hydrogen strategy in 2019, which
set out the country's goals and areas of development for building a
hydrogen industry. About AUD146 million (US$113 million) has been
committed to hydrogen projects.
Through these projects, Australia hopes to learn more about how
hydrogen can form part of its energy mix through driving down
prices and emissions as well as providing expertise to build a
competitive export industry.
"We plan to accelerate the commercialization of hydrogen, reduce
technical uncertainties and build up our domestic supply chains and
production capabilities. The strategy looks to initially
concentrate hydrogen use in niche hubs that will foster domestic
demand. A strong domestic hydrogen sector will underpin Australia's
exporting capabilities, allowing us to become a leading global
hydrogen player," said Angus Taylor, minister for energy and
emissions reduction, and Matthew Canavan, minister for resources
and northern Australia, in a handbook on the strategy published in
2019.
Original reporting by Soo Cheng Bernadette Lee.
Posted 23 March 2021 by Bernadette Lee, Principal Journalist, Climate and Sustainability, OPIS, IHS Markit
