Western Australia has set an ambitious target of 100 gigawatts of renewable energy for green hydrogen within a decade, with that figure to double by 2040.
Hydrogen Minister Alannah MacTiernan set out the state’s aims to become a leader in green hydrogen at a Committee for Economic Development of Australia (CEDA) event in Perth last week.
“It’s really very tricky and very controversial to try and project what the size of this industry is going to be, but, when we look at what is happening, we think it is not beyond the pale to suggest that in the next 10 years that we could be producing up to 100GW of renewable energy for hydrogen and by 2040 that could be up to 200GW of power,” MacTiernan said.
“To give you a sense of scale, all of Australia today annually uses around 70GW of power. But if we are going to be an exporter … we obviously have to get very serious.”
Prakash Sharma, energy analyst Wood Mackenzie’s Asia Pacific head of markets and transitions, told Upstream that, although the targets are aggressive, they will be required for Australia to become a dominant player in the green hydrogen market.
“Assuming 100GW renewables would come from solar and wind power projects, and the entire output goes into electrolysers, you produce about 5 million tonnes of green hydrogen. That’s about 5% of global hydrogen production today,” he said.
Australia has ambitions to become a leading hydrogen exporter and MacTiernan said Western Australia can capitalise on the experience of its liquefied natural gas industry, which has passed Qatar as the world’s largest LNG exporter.
“That took decades of committing to a vision learned from experience and industry and government working together and leveraging the connection between the domestic and export opportunities,” she said.
MacTiernan said the state government is already working with governments in South Korea and Japan to develop the hydrogen export industry.
An advantage Western Australia has in growing its renewables industry is its vast land mass, which MacTiernan highlighted covers an area about the size of Western Europe. It also has excellent wind and solar resources.
Russell James, general manager for business development west at Canadian conglomerate ATCO, noted at the same CEDA event that Japan and South Korea have restricted land for renewables generation.
“The land mass and the energy requirements to install 20, 30, 100GW of power just isn’t prevalent elsewhere apart from places like Australia,” he said.
However, the state still face challenges. MacTiernan noted that the government is working on the framework to overcome the “very complicated set of legislative and regulatory hurdles”.
Most of the large tracts of land suitable for renewable-energy generation in Western Australia are already covered by, for instance, pastoral leases, which MacTiernan indicated could lead to land tenure issues.
She acknowledged that the government would need to work on a new tenure type for renewables projects and engage with native title holders, as well as consider the environmental consequences.
“We’ve been working with the [Environmental Protection Authority] so that we can have a really standardised process for this, because there are going to be so many projects coming up for environmental approval,” MacTiernan said.
Another major hurdle the state’s nascent hydrogen industry faces is demand aggregation, which the minister said creates a “chicken and the egg” scenario, with companies needing a market to sell into before committing capital.
“You can’t have a market if you are not producing it,” MacTiernan said.
“So how we pull that together is very much the work that we are doing at the moment — how we get a sort of critical mass of both demand and supply working together at the same time to get over this, what I say is, the early commercialisation hump.”
Sharma noted Western Australia’s ambition to have 100GW of renewables capacity for green hydrogen production within the next 10 years also faces challenges on the equipment manufacturing side.
“While there is sufficient manufacturing capacity to produce solar panels and wind turbines, electrolyser manufacturing is in its nascent stage and requires significant scale-up and investments,” he told Upstream.
“There are opportunities to vertically integrate the hydrogen value chain and mitigate supply risks that may appear in the future.”
MacTiernan said Western Australia is looking to capitalise on manufacturing demand, claiming the government wants the state to be “technology makers, not takers”.
It wants Western Australia to produce the componentry required for green hydrogen, including the electrolysers, and it recently committed an additional A$10 million (US$7.8 million) towards wind turbine manufacturing.
“We are going to need huge amounts of wind turbines. We don’t want to be just taking that technology from overseas,” she said.