By Simon Brooks*
With Mornington Peninsula Shire Council’s declaration of a climate emergency in mid-2019, and the August 2020 adoption of the climate emergency plan there is an expectation by many that the shire clearly communicates a position on some of the big energy infrastructure projects planned for our country, state and in particular within the municipality.
I was privileged to be a councillor who was able to help drive these initiatives and I’m hopeful the new group of councillors will keep up the momentum with support from the shire staff and senior officers.
Climate change is placing us at significant risk and will increasingly cost local government to respond and adapt to the very real impacts of climate change.
Where the activities of others add to this risk, we have a duty to shine a light on these activities and question their relevance. With this comes a responsibility that we also publicly set a level of expectation that best practice is followed by others.
Hydrogen is being held up as a key component of our transition away from a carbon-based energy economy.
This article is based on a resolution of council in February 2020 to set a level of expectation that the state and federal governments adequately assess the risks versus the benefits of the hydrogen-from-brown coal process now being trialed through the hydrogen energy supply chain (HECS) project.
The hydrogen gas is being liquefied and being exported from a plant at the port of Hastings.
The Japanese in particular have been actively investing in hydrogen production research and infrastructure over several decades, actions that have been accelerated by the Fukushima nuclear disaster. Australia’s national hydrogen strategy identifies the potential for Australia to be a significant hydrogen producer and net exporter.
According to a research paper by IFRI (a France-based international research agency) the in-principle agreement between Japan and Australia to undertake the HECS project was reached more than 10 years ago, locking-in the trial now underway.
At present hydrogen is produced in two key ways: through extraction from fossil fuels, usually natural gas (blue hydrogen) or through electrolysis of water using electricity (green hydrogen).
The extraction process from fossil fuels varies depending on the source, but they all produce by-products, including emissions. In order to ensure that the process to extract hydrogen doesn’t produce more emissions it is seeking to avoid, CCS (carbon capture storage) is increasingly seen as mandatory.
The HECS project states that to progress from trial to commercial phase CCS must be attainable. To achieve this, areas of the Bass Strait have been under investigation for storing the emissions under the sea floor (Carbon Net project).
The splitting of water into hydrogen and oxygen through electrolysis produces no other by-products or emissions. It does require significant electricity and a supply of water. There are two projects underway in South Australia using this technology, and other smaller projects are emerging utilising small-scale and containerised electrolysers including by Toyota at Altona.
Other significant green hydrogen projects are being mooted, notably including from Fortescue Metals.
The differences between the two approaches are quite stark and assumptions are being tested on both sides of the equation.
The founder of Zen Energy and a pioneer of the new energy market, Professor Richard Turner, says that the technology to produce hydrogen through electrolysis (electricity through water) has advanced significantly and was becoming a commercially viable and environmentally clean way of producing hydrogen. He sees excess renewable energy being used to produce hydrogen to provide both combustible energy and electricity through fuel cells.
Conversely, his view was that the hydrogen-from-coal process was risky as it relied on the largely unproven and expensive CCS technology.
His colleague Professor Ross Garnaut’s perspective was that while hydrogen from coal may be seen as a transitional pathway, and that the feasibility of CCS in the Bass Strait was a valid investigation, he saw producing hydrogen through renewable energy as ultimately being both the cheaper and long-term pathway.
The vast reserves of brown coal in the Latrobe Valley are seen by many as a resource that is too significant to be ignored and that the emissions challenge can be solved. As with any existing market, there are vested interests that would prefer to see continued exploitation of a cheap and abundant resource.
Meanwhile, other clean technologies are rapidly evolving.
There is plenty of information comparing the cost of producing hydrogen from coal versus hydrogen through electrolysis.
The CSRIO’s 2018 National Hydrogen Pathway report suggests the cost of producing hydrogen through renewable electricity powered electrolysis will be cost competitive to that of using brown coal by 2025.
Research from Germany claims the cost of hydrogen through electrolysis will quite likely match the cost of hydrogen from fossil fuel by 2025 without the cost of CCS.
A 2019 IRENA (International Renewable Energy Agency) hydrogen paper states: “The lowest cost wind and solar projects can provide hydrogen at a cost comparable to that of hydrogen produced from fossil fuels.” This research assumes that the cost of renewables, in particular wind, will continue to fall at a modest rate.
To balance the argument, the CCS industry estimates it will cost $120-$150 to store a tonne of emissions. There are claims that the technology will reduce in price as more schemes come online with comparisons being made to the reduction in cost of production of lithium-based batteries. Currently there are only a very small number of large commercial CCS projects operating.
There is a growing view that this is a large upfront and ongoing investment for what at best is a transitional technology that may already be non-competitive.
The CSIRO report also states that in order to make CCS cost competitive it is necessary to build a large plant (500,000 kg/day). In its analysis of hydrogen through electrolysis this technology is much more scalable and can be located where required.
Interestingly, the CSRIO report states that the risk over time of stored emissions would need to be managed by government rather than private industry. One of the few existing CCS projects (in Canada) has this risk management structure, which is an admission that there is a permanent and ongoing need to monitor and manage stored emissions.
In summary the HECS trial is taking 160 tonnes of brown coal, burning it, producing three tonnes of hydrogen and 100 tonnes of emissions. The trial will offset its emissions by buying carbon credits. The technology to capture the emissions and store them in the Bass Strait has not been finalised, proven or been shown to be economically viable.
If the CCS process is proven and is viable, there will still be a legacy of stored emissions to be monitored and managed.
To spread the cost of CCS over time the commercial project will have to be large and therefore will lock significant investment and technology in place when strong evidence suggests it will be less economical in the very near future.
With the HECS project it is clear that the direction set 10 years ago is increasingly at odds with the reality of now; environmentally, technologically and economically.
Given the evidence that is emerging and rate of change in clean hydrogen production, it will be difficult to justify progressing the HECS from a trial to large-scale production.
In line with the shire’s climate emergency declaration and the climate emergency plan we need to be making it clear from a local level that we will not accept anything other than best practice and best outcomes from the other two levels of government.
* Simon Brooks was a councillor for Mornington Peninsula Shire’s Seawinds Ward 2016-20.