Researchers at Melbourne’s Monash University have unveiled a new open-source economic modelling tool which has projected continuing cost declines and deployment of solar PV will by the end of the decade allow for the production of green hydrogen by electrolysis for $2p/kg.
The Hydrogen Economic Fairways Tool (HEFT), developed by researchers from Monash University in collaboration with government agency Geoscience Australia, is a free online tool that assesses the economic viability of potential hydrogen operations across Australia.
Stuart Walsh, senior lecturer in Resources Engineering at Monash University, said the tool has the ability to conduct detailed geospatial-financial analysis of future large-scale hydrogen projects.
It assesses the quality of energy resources including wind, solar PV, concentrated solar power, steam methane reformation (SMR) with carbon capture and storage (CCS), and coal gasification with CCS, and also considers other associated costs including transportation, infrastructure and storage.
“It’s a tool we’ve developed in collaboration with Geoscience Australia to identify regions of potential development of new hydrogen projects,” Walsh told pv magazine.
“In particular we’re looking at those areas which are best suited for developing hydrogen projects from an economic perspective.”
The Australian government has committed to green hydrogen – generated by electrolysis powered by solar PV and wind energy – as a fuel for the future, formally recognising it as a ‘priority technology’ in the Technology Investment Roadmap announced late last year.
The government has set an economic ‘stretch goal’ to produce green hydrogen for $2p/kg. At that price green hydrogen is expected to be cost competitive with gas produced using fossil fuels.
Walsh said that modelling completed using the HEFT, using technology cost reduction forecasts provided by financial research company BloombergNEF, indicated that the goal is achievable.
“It’s definitely possible, especially over that 10-year timeframe,” he said.
“A lot can change over that period but if the Bloomberg numbers hold up, keeping in mind they are a bit optimistic, then our model predicts you can get to that $2 farm gate production target.”
The HEFT modelling indicates off-grid hydrogen production using solar PV could be as low as $2p/kg by 2030. Adding water and delivery costs would lead to a hydrogen cost just below $3p/kg before shipping.
“The Bloomberg figures are generally accepted as being fairly optimistic estimates, but nevertheless they provide one baseline against which you can judge what the potential future cost will be to produce hydrogen in different places,” Walsh said, adding the speed of achieving the $2p/kg goal depends on many factors, including the momentum of technology adoption, costs of renewable generation facilities, the utilisation factor of the electrolyser, configurations of the hydrogen supply chain, and delivery of supporting infrastructure.
“We’ve seen even over the last couple of years the estimated price of what it costs to produce hydrogen has fallen quite dramatically and people are also predicting that it will continue to fall which is in line with those predictions,” he said.
“It’s just very hard to say at this point what those curves will look like into the future.
“The fact that there is uncertainty, I don’t want to give the impression that that necessarily is a bad thing it’s just that we don’t know. The prices are changing rapidly. They are changing for the better but what that will mean in the future is something that we will be waiting to see.”
The federal government is keen to capture a significant share of the growing global export demand for green hydrogen and state governments have also embraced the vision, announcing their goals and actions in support of the development of a hydrogen industry.
Walsh, who teamed with postdoctoral research associate Chanlong Wang and Geoscience Australia’s Laura Easton and Andrew Feitz on the HEFT project, said the tool could support decision making by policymakers and investors on the location of new infrastructure and development of hydrogen hubs in Australia.
“The Hydrogen Economic Fairways Tool is an online website and it allows anyone to jump on and work out different areas around Australia which are well suited for different types of hydrogen production,” he said.
“Originally it stemmed from a project we had with Geoscience Australia that was looking at economic potential of developing new mining projects and mineral developments.
“From that we developed a code called Bluecap and we realised quite early on that we could extend the codes we were running in Bluecap into other areas and one of the areas that we were particularly keen on looking at was hydrogen production and renewable resources.”
The HEFT is an open-source modelling tool, freely available via Geoscience Australia’s AusH2 portal. The software has been designed to be as flexible as possible and the modular design allows users to input their own assumptions and cost curves and run an analysis on those.
“In addition to that, we’ve also got the Bluecap code itself which is open-source software,” Walsh said.
“We recognise there are some calculations that are perhaps better done on your own machines, whether that be because of the size of the data involved or the type of calculations that you want to run so we’re making the engine that underlies the Hydrogen Economic Fairways Tool available for people download and play with themselves and try their own assumptions and own analyses as well.”
There are also plans to expand the tool’s capabilities with the aim to optimise the development of shared infrastructure to facilitate large-scale hydrogen production and delivery, attracting investment into Australia’s hydrogen industry.
Further inclusions of battery, hydro, pumped hydro energy storage, and delivery infrastructures will be added to the tool. Large-scale hydrogen storage will also be incorporated in future works.
While large-scale hydrogen production has not yet been implemented in Australia, there’s an increasing number of pilot, demonstration and small-scale projects in various development stages around the country.
Walsh expects the rollout of small-scale projects will provide a more concrete base on which to judge green hydrogen production costs and said the early signs are promising.
“We’ve seen some early data that is at least in line with some of the more optimistic estimates so once we see how the projects pan out, it will provide a lot more certainty around the cost estimates,” he said.
Project team member Chanlong Wang is due to present the Hydrogen Economic Fairways Tool at the Energy Next Exhibition in Sydney next month.
Originally scheduled to be staged at the International Convention Centre next week, the event has been pushed back to August 25-26 o Covid-19 restrictions.
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