• Climate hub
  • 16 Sep 2021
  • 6 min read

The hype on hydrogen

By Amy Hamilton Chadwick

The vital role of hydrogen in a low carbon future

New Zealand’s power demand might double by 2050, and electricity might only supply around half of that energy, according to the Business NZ Energy Council’s energy future modelling work. That means we’ll need supplementary energy sources to help power the country – and they need to be renewable and sustainable.

“We need to think about what sort of fuels might work well for the New Zealand context and where we can deliver real sustainable solutions.” says Tina Schirr, Executive Director of the Business Energy Council (BEC). “We should be open minded on what’s going on elsewhere, who we can partner with, and then how we can make it a New Zealand story.”

Green hydrogen is made from renewable sources of electricity and has great potential to step up into that role: it’s clean, sustainable, and extremely abundant. It’s a face lift for its cousins blue and grey hydrogen that are both made from fossil fuels.

Hydrogen explained: grey, blue and green.
Hydrogen explained: grey, blue and green.

Capturing extra power at an affordable price

Right now, hydrogen is expensive to produce, transport and store. But by cooperating with other countries, we can accelerate both our supply and demand. That will bring down the price of hydrogen until it’s competitive with gas and petrol. And the upsides of hydrogen, says Schirr, make it well worth the investment to get over the initial cost hurdles.

“There are times in the year when we need extra power, when our water reserves are too low. At the moment we need to use gas as a back-up and coal. Hydrogen could be one of the solutions allowing us to store our excess hydroelectricity and use it later.” Shirr said.

The world is jumping on hydrogen

Across the world, big bets are being made on hydrogen. The United States has set a goal to reach 100 percent carbon pollution-free electricity by 2035 with hydrogen a key to achieving that. The Biden administration has committed $75 million to fund 31 projects to advance next-generation clean hydrogen technologies and is looking to reduce the cost of clean hydrogen by 80% to $US1 per 1 kilogram within a decade. The European Union has set the ambitious goal of building electrolysers capable of converting 40 GWh of renewable electricity into hydrogen by 2030. China plans to have one million hydrogen powered vehicles on the road by the end of 2030, South Korea is building fuelling and other infrastructure in six cities where it hopes to make hydrogen the main source of energy by 2025.

Across the Tasman, Prime Minister Scott Morrison has proposed spending an extra $572 million on hydrogen and carbon sequestration projects to support the goal of becoming a major global hydrogen supplier by 2030. Western Australia's state government has created a $56 million fund to stimulate local demand for renewable hydrogen in transport and industrial settings and to drive investment into developing it further. Iron ore billionaire Andrew Forrest casually describes plans of delivering 15 million tonnes of green hydrogen by 2030, the foretaste of an industry he expects to be worth $17 trillion by 2050.

Here in New Zealand, if we can capture more power from our hydro dams, we have the choice of using it on-shore or selling it to a nation like Japan which depends on imports for over 90% of its primary energy supply. Australia is already capturing and exporting their solar power using green hydrogen and we can do the same with our hydro power. With a mix of local use and exports, we could drive greater demand, innovation, and investment – all of which could help reducing the costs of hydrogen.

The truth about hydrogen's dirty problem - green hydrogen explained

We don’t need to go it alone

Because we have local climate change goals, we also tend to think locally about solutions. But that’s a mistake because climate change doesn’t stop at our borders, says Schirr. Globally, $300 billion has been allocated for hydrogen research and projects by 2030. We already have bilateral agreements in place with Germany, South Korea and Japan – Germany, in particular, has committed $2 billion for hydrogen projects with international partners that Kiwi businesses could tap into.

New Zealand already has a big head start on producing hydrogen, because our high proportion of renewable power means we can produce hydrogen without burning any coal. By learning from other nations, we can match hydrogen supply with the most effective uses – which aren’t always obvious, says Schirr.

What can green hydrogen be used for?

“There’s a lot of focus on transport and heating, but there are so many other potential applications, both domestic and industrial. For example, fuel cell technology has been used in hospitals for decades in Germany, because they’re an extremely fast source of energy. Our scenarios,Kea and Tui, have also shown that looking ahead, hydrogen could be cost-effective not only in industrial heating, but also in off-road and agricultural vehicles like tractors, particularly in remote areas.”  

Hydrogen is already becoming more widely used locally, and that’s likely to grow with the development of a hydrogen refuelling network across New Zealand. One of the world’s first nationwide networks, it’s being developed by Hiringa Energy and Waitomo, with construction set to begin in 2022 on eight sites from Whangarei to Invercargill.

Hydrogen powered buses from Auckland Transport
Hydrogen powered buses from Auckland Transport

And we already have a brand-new hydrogen bus on our streets, launched in March 2021 by Auckland Transport and built in Christchurch, which is being trialled for two years. With transport responsible for 40% of Auckland’s carbon emissions, if the hydrogen bus proves cost-effective it could be the trailblazer for a new, cleaner public transport system.

Co-founder and owner, Andrew Clennett, has long seen potential in green hydrogen and believes with the new wave of commitments by countries and companies the cost barrier will fall away as he outlined in this TED Talk.

Schirr believes that finding the right balance for producing, using and exporting green hydrogen can help New Zealand in our drive to lead the world in climate change. “It can give us a flexible, storable fuel, create more green jobs, and help decarbonise our economy – we’ll be watching the hydrogen and other clean fuel industries with interest.”

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