Wednesday, 17 February 2021
Statements by Senators
I rise today to speak about what I consider to be one of the most exciting opportunities in Tasmania today: renewable hydrogen production. As a state, Tasmania's clean, green image is already synonymous with renewable energy, but hydrogen is an energy source where we are truly leading the way. At the beginning of this month, National Energy Resources Australia announced Bell Bay Advanced Manufacturing Zone as one of the successful applicants for its seed funding program, awarding the organisation $100,000 to form a regional hydrogen technology cluster. The Tasmanian government matched the NERA grant, providing Bell Bay Advanced Manufacturing Zone with an additional $100,000 to further develop Tasmania's renewable energy future. This announcement comes hot on the heels of Woodside Energy signing a memorandum of understanding with the Tasmanian government for its renewable hydrogen facility in the manufacturing zone in January. A final investment decision is expected in the second half of this year, with Woodside planning to start hydrogen production at the site by 2023 if the project is to go ahead.
Fortescue Metals Group is investigating the feasibility of developing a green ammonia plant at Bell Bay, as part of the Tasmanian government's Renewable Hydrogen Industry Development Funding Program. The project will include constructing a 250-megawatt green hydrogen plant to produce up to 250,000 tonnes of green ammonia per year for domestic use and international export.
Bell Bay Advanced Manufacturing Zone chief executive, Susie Bower, said a facility of this size would be one of the largest in the world and it would be powered solely by Tasmanian renewable energy. Not only do these projects show the energy industry is behind Tasmania's aspiration to become a leader in large-scale renewable hydrogen production but such projects create jobs for Tasmanians in construction and operational rules, and support our economy. The combination of the state's abundant and low-cost renewable energy options and the unanimous adoption of the National Hydrogen Strategy by Australia's energy ministers in November 2019 shows Tasmania has the means to match the desire for this renewable energy source.
Australia aims to be a major player in the global hydrogen industry by 2030, so the timing is definitely right. Our existing hydro power combined with wind power means that Tasmania can produce renewable hydrogen at a cost 10 or 15 per cent lower than other mainland power grids. We are hydro-ready. Bell Bay Advanced Manufacturing Zone is located in Tasmania's north, at the mouth of the Tamar River, allowing the deepwater ports, stable transmission and the transport infrastructure needed for a renewable hydrogen industry. This makes Bell Bay one of Australia's strategically important locations, particularly as it sits within the north-east renewable energy zone. Northern Tasmania is already throwing its support behind hydrogen. In December, I attended a breakfast, hosted by the Northern Tasmanian Development Corporation, Bell Bay Advanced Manufacturing Zone and the Launceston Chamber of Commerce, specifically held to explore the leadership role this region could take in green hydrogen production.
Hydrogen is a clean fuel that can power cars, trucks and ships, heat homes and industries, and generate electricity. It is also one of the most plentiful elements in the universe. To put hydrogen's capacity as a fuel source into perspective, Australia's former Chief Scientist Dr Alan Finkel, who led the National Hydrogen Strategy, said that one kilogram of hydrogen is enough to travel up to 100 kilometres in a Hyundai NEXO SUV or power a 1,400-watt electric split cycle air conditioner for 14½ hours. Further, around one tonne of hydrogen is equivalent to 3.4 times the average annual consumption of an Australian house with gas heating. Indeed, Hyundai has already started delivering hydrogen electric vehicles in Switzerland and is planning to put 1,600 trucks on Swiss roads by 2025. Transport, stock and services manufacturer Alstom has already produced a hydrogen powered electric train in the Netherlands. Green steel making is under pilot in Sweden, and international shipping fleets are using clean ammonia, made from hydrogen, as a fuel source via modified diesel engines.
Closer to home, the Australian government's 'Future fuels strategy discussion paper', released earlier this month, considers how road transport will develop in Australia. The paper explains how new technology for vehicles, including hydrogen fuel cells, will give consumers more choice, reduce emissions and increase fuel security and air quality. There are several commercial hydrogen fleet and refuelling trials planned or already underway in Australia. These include hydrogen fuel cell electric forklifts, cars, shuttle and regional buses, and trucks for mining and refineries. These vehicles are supported by demonstration refuelling facilities located around the country. The Australian government, through the Australian Renewable Energy Agency, has already invested more than $400 million for hydrogen transport related demonstration projects, including with Toyota Australia and BOC Limited. There is clearly a global appetite for this resource. However, hydrogen does not occur naturally in a useful energy form. Instead, it needs to be produced from substances containing hydrogen, such as water, solar, wind, natural gas or biomass.
Renewable energy can be used to electrolyse water to produce hydrogen and oxygen. When renewable electricity is used, little or no carbon emissions are produced during manufacture and use. Most of Australia's energy is generated from non-renewable fossil fuels. However, this is not the case for Tasmania, where large-scale renewable energy infrastructure has been developed over more than a century. Tasmania has achieved 100 per cent self-sufficiency in renewable energy, and the state plans to double its renewable generation to 200 per cent of its needs by 2040. The draft Tasmanian Renewable Hydrogen Action Plan puts the value of the Australian hydrogen export market at $2.2 billion by 2030 and $5.7 billion by 2040. Conservative estimates suggest that global demand for hydrogen as an energy source will exceed eight million tonnes by 2030 and about 35 million tonnes by 2040. Japan and South Korea have already indicated they will need to import significant quantities of clean hydrogen as a substitute for fossil fuel for energy and transport.
The Australian government has already signed a cooperation agreement with Japan and a letter of intent with South Korea to underpin future hydrogen export, and it has a plan to develop an international certification scheme for hydrogen, working closely with local and international companies. International supply chains to move hydrogen in bulk quantities safely are already being investigated. Such options include transporting liquefied hydrogen by ship or via other hydrogen-carrying forms such as ammonia or liquid organic hydrogen carriers.
Tasmania's draft action plan states hydrogen production and distribution costs are high now compared to other fuels, but they should drop as production scales up and with further technological development. The COAG Energy Council's Hydrogen for Australia's future report shows development of hydrogen technology has been aided by the falling cost of generating renewable electricity. Over the past decade, costs associated with generating electricity from wind and solar photovoltaic—PV—have fallen significantly, by around 70 per cent for wind and 80 per cent for solar PV. The cost of making a hydrogen fuel cell has fallen by about 60 per cent since 2006.
This is an ambitious vision, but growing demand will likely create pressure to accelerate the use of hydrogen energy. As Dr Finkel wrote in The Conversation:
Hydrogen is just the fuel the world needs to support a clean energy future: zero-emissions, flexible, storable, and safe.
The best way to work towards adopting hydrogen as our fuel of choice is for all of us—governments, industry and communities—to work together. This includes keeping a strong focus on streamlining regulation and ensuring safety as we delve into this emergent industry, opening up international markets and encouraging commercial investment.
The Tasmanian government's draft action plan estimates that a 100-megawatt renewable hydrogen production facility would contribute around 120 ongoing jobs regionally. Further, a 1,000-megawatt facility, which could be feasible by 2030, would contribute an estimated 1,200 regional jobs and could support around 200 megawatts of renewable energy investment.
I mentioned earlier job creation opportunities at the Bell Bay Advanced Manufacturing Zone. Those jobs, coupled with the estimates included in the Tasmanian draft plan, are just the beginning. Outside Tasmania the hydrogen industry could generate thousands more jobs and add billions to our gross domestic product. Most importantly, hydrogen could help Australia integrate renewable generation into our electric grid, reducing our reliance on fossil fuels. Now is the time for Australia to fully embrace renewable hydrogen production, with Tasmania leading the charge. (Time expired)