Victoria devotes $10 million more to hydrogen, and joins the dots of a green hydrogen economy

As part of a Renewable Hydrogen Development Plan launched on Friday, the Victorian Government has allocated $10 million in additional support for budding hydrogen development. Pilots, trials and demonstrations of green hydrogen technology will have access to $6.2 million in new grant support, while potential industrial users of green hydrogen can apply for a scoop of a further $1 million that will help develop business cases and feasibility studies for use of renewable hydrogen. Both funding lines come under the existing Accelerating Victoria’s Hydrogen Industry Program.

A hallmark of the Renewable Hydrogen Development Plan is its integration of new and existing hydrogen initiatives with planned renewable energy infrastructure, gas networks that can be adapted to distribute hydrogen blends, education of workforces to innovate and administer safe hydrogen production and distribution, transport networks that will utilise hydrogen, and export facilities.

“I commend the Victorian Government on its comprehensive plan focused on renewable hydrogen opportunities,” said Dr Fiona Simon, CEO of the Australian Hydrogen Council (AHC), on Friday.

The Council is the representative body of the Australian hydrogen industry, and includes members likely to align with the Plan, such as Arup, Australian Gas Infrastructure Group, BusTech Group, Engie, H2H Energy, Horizon Power, Star Scientific, Sumitomo Australia, Toyota Australia and Transit Systems.

Simon said that the AHC has also been calling for “a Federal Hydrogen Market Development Plan” that includes a target date for reaching the Commonwealth Government’s viability mark for H2 under $2 per kilogram to produce.

That is, if hydrogen needs to be available at $2 or less per kilogram to be competitive with alternative fuels deployed at large scale across the country, the AHC wants to see at least “the minimum number of projects needed to reach the price target”, says Simon.

The Victorian Renewable Hydrogen Development Plan references the H2 under $2 national “stretch goal” as a mechanism for tracking “how hydrogen is progressing on its cost curve”,  and proceeds to outline Victoria’s vision for “a thriving renewable hydrogen economy”.

That vision recognises the many industrial, state-based and national programs now underway to accelerate hydrogen development. It aims, for example, to assist projects to plug into the Clean Energy Finance Corporation’s $300 million Advancing Hydrogen Fund, and to dovetail with National Energy Resources Australia’s (NERA) Regional Hydrogen Technology Clusters to build “a well-connected supply chain network”.

Although the Plan focuses on renewable hydrogen, the Victorian Government says its development “has been informed by and aligns with the policies, projects and initiatives which support other forms of hydrogen production in Victoria”. It refers to the $496 million Hydrogen Energy Supply Chain (HESC) pilot which is testing the feasibility of exporting brown hydrogen produced by burning coal onsite at AGL’s Loy Yang power station, capturing the carbon generated, and exporting “clean-burning” hydrogen fuel to Japan via a first-of-its-kind in Australia liquefaction and loading terminal at Victoria’s Port of Hastings.

Marshalling the state’s inherent advantages and investments

Victoria’s Renewable Hydrogen Development Plan is organised in terms of three “focus areas”, each of which encompasses six desired “outcomes”.

Of the focus areas, establishing a “Foundation for renewable hydrogen” is already underway. It involves regulating and adjusting for cross-sector issues such as safety, skills development and workforce planning; and supporting research and development.

The second focus area — “Connecting the Economy” — will see the strengthening of sector-coupling opportunities.

That is, Victoria will have progressed the integration of renewable hydrogen with its transport sector (Outcome 9); hydrogen will play a clear role in “supporting a secure, reliable and resilient electricity system” (Outcome 10); the industrial sector will be “primed for renewable hydrogen” (Outcome 11); and renewable hydrogen will by this stage enable the export of Australia’s renewable energy.

In the medium to long term, the plan envisages a Victorian state focus on “Leading the way”: that is, the Plan foresees, “Hydrogen opportunities across the state will be linked through market connectivity and a fully integrated supply chain”, strategies and communication will have ensured that ,“The community understands and trusts hydrogen” (Outcome 14); and the Victorian Government will use its purchasing power to strengthen the state’s renewable hydrogen sector (Outcome 15).

The AHC’s Simon believes “There is a distinct opportunity in Victoria to generate sustainable jobs and sustainable energy”, and applauds the political will shown by the Victorian Government to progress to net zero emissions by 2050, while capitalising on the economic opportunities inherent in that transition.

The new $10 million in state government funding, although not yet fully allocated, complements other Andrews’ Labor Government investments such as the $20 million used for a statewide trial seeking solutions for a zero-emissions bus fleet, which includes trialling hydrogen buses; the $10 million recently provided to support CSIRO and Swinburne University of Technology in development of a Hydrogen Technology Demonstration Facility that includes a refuelling station for hydrogen vehicles.

Hydrogen ambitions meet REZ ramp up

Of course, the hydrogen economy will be built on further development of Victoria’s renewable resources, and the Plan acknowledges the role of the state’s six nascent Renewable Energy Zones (REZs) — identified by the Australian Energy Market Operator’s Integrated System Plan as strategic areas in which to colocate solar/wind/hydro generation, storage and energy-hungry industry — as potential hydrogen-production hubs.

It says that renewable hydrogen production sites that are located close to significant renewable generation facilities “have the potential to extract value by avoiding network constraints that might otherwise limit the generation of power from renewable sources”.

At the same time, the large-scale, high-density energy-storage capability of hydrogen has the potential to support the grid and the Victorian Government sees it as “a viable option for holding and distributing energy to match grid power demand”.

The Plan’s main benefit appears to be in co-ordinating Victoria’s enablers of a hydrogen economy (renewable resources, world-class education and research institutions, an extensive gas network, a connected transport system and export infrastructure) with the many initiatives, funding allocations and potential opportunities currently associated with hydrogen both within the state and nationally. 

Driving these towards specific outcomes provides a blueprint to advance the envisioned hydrogen economy, and potentially also Victoria’s stated Renewable Energy Target of 50% in the electricity system by 2030.