Australia can be a cheap source of green hydrogen but faces competition

Australia can be one of the world’s cheapest sources of green hydrogen production but faces competition from countries such as China, Chile, Morocco and Columbia according to an analysis by the International Renewable Energy Agency (Irena).

Australian sources come in as the fifth cheapest in the world of 25 studied, driven overwhelmingly by onshore solar PV which would account for 90 per cent of power required for electrolysis, with some contribution from onshore wind generation.

The Irena study, Global Hydrogen Trade to Meet the 1.5°C Climate Goal: Green Hydrogen Cost and Potential, looks at availability of land as major constraints for European countries, while the availability of water emerges in others such as those sub-Saharan Africa.

The report said: “The higher cost of green hydrogen compared to fossil fuels has posed a significant challenge to the deployment of green hydrogen.

“In the most optimistic scenario, production costs could reach levels of US$0.65/kgH2 by 2050 in the best locations, while reaching levels of US$1.15/kgH2 in less optimistic cost assumptions.

While Australian projects are still targeting the production of green hydrogen at less than $2/kg, the study suggests that cheapest producers generating green hydrogen for as low as 65 cents per kg by 2050 are China and Chile, followed by Morocco, Columbia and Australia – on the most optimistic scenario.

On the optimistic scenario Australia’s costs are around 70 cents per kg, while on the pessimistic they rise to $1.20 by 2050.

The study concluded that vast green hydrogen potential existed around the world equating to more than 20 times global primary energy demand in 2050.

However the study confirms that Australia’s existing energy trading partners such as South Korea and Japan will be unable to meet their needs from domestic green hydrogen production.

Other countries that would be unlikely to meet their own demand include India, Germany, Italy, and Saudi Arabia.

Picture: Australian Hydrogen Council

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