What’s in Store for Natural Gas as Hydrogen Enters the Pipeline?

Natural gas will have an important role to play in a low emissions future and will be a key partner in Australia’s renewable energy supply chain.

Already considered a ‘clean’ fuel, natural gas produces the least amount of carbon dioxide of all fossil fuels. However, what many people don’t realise is that natural gas will also have a prominent role in the development of Australia’s new hydrogen industry.

The Paris Agreement commits Australia to reducing emissions to 26-28% of 2005 levels by 2050. The establishment of a hydrogen supply chain to power industry, electricity generation and exports, is now considered to be an important way to help meet the Paris targets.

Sustainable future – clean hydrogen

Within Australia’s National Hydrogen Strategy, the Council of Australian Governments (COAG) Energy Council set a vision for the future of Australia’s energy industry in 2018, outlining the requirements and benefits of a clean, innovative, safe and internationally competitive hydrogen industry.

The Council’s Hydrogen Working Group, chaired by Chief Scientist Alan Finkel, has prioritised developing Australia’s robust national hydrogen strategy for 2020-2030. A hydrogen industry will enable Australia to:

  • significantly reduce carbon emissions and contribute to a cleaner environment;
  • develop a thriving export market, adding billions to GDP in the coming decades;
  • generate jobs and property in the Australian market;
  • enhance Australia’s fuel security.

In a speech to the National Press Club in February 2020, Dr Finkel suggested that Australia is well positioned to adopt a thriving hydrogen market:

“There’s a nearly A$2 trillion global market for hydrogen come 2050, assuming that we can drive the price of producing hydrogen to substantially lower than A$2 per kilogram.  In Australia, we’ve got the available land, the natural resources, the technology smarts, the global networks, and the industry expertise. And we now have the commitment, with the ‘National Hydrogen Strategy’ unanimously adopted at a meeting by the Commonwealth, State, and Territory Governments late last year.”

The fuel provides a flexible, abundant and renewable resource that would have a revolutionary impact:

We have two viable ways to extract hydrogen, with near-zero emissions. First, we can split water in a process called electrolysis, using renewable electricity. Second, we can use coal and natural gas to split the water, and capture and permanently bury the carbon dioxide emitted along the way.”

Implementation of an impactful renewable hydrogen industry is reliant upon natural gas and existing gas networks. Australian Renewable Energy Agency (ARENA), among others, has invested in a series of demonstration projects to assess the viability of renewable hydrogen in a range of applications. The demonstration projects will test the effectiveness of blending 5-10% hydrogen into existing gas networks in the short term, and transition toward 100% hydrogen networks in the long term.

Above all, the projects highlight the complimentary nature of gas and hydrogen in contributing to the decarbonation of Australia’s energy industry. ARENA CEO Darren Miller said:

“The natural gas network could be a key piece of infrastructure to support decarbonisation of the national energy system. The network has the potential to be used for the long-term storage of renewably produced hydrogen and limit the need for electrification alternatives, which can be costly.”

SPOTLIGHT: Hydrogen Park South Australia (HyP SA)

Supported by Australian Gas Infrastructure Group (AGIG), Adelaide-based Australian Gas Networks (AGN) and the South Australian Government, HyP SA is an $11.4 million project aiming to demonstrate the feasibility of blending hydrogen into the South Australian gas network.

AGIG Chief Customer Officer, Mr Andrew Staniford, reports that:

“The aim of the demonstration plant is to reflect how energy will be provided to businesses and homes in the future.  It will also illustrate the complementary nature of gas and electricity in meeting the decarbonisation challenge – a key in balancing the energy trilemma.”

The project will produce hydrogen from renewable electricity and water using a 1.25MW PEM electrolyser, which will then be injected into the local gas distribution network to provide low-carbon gas to over 700 homes and businesses in Mitchell Park, Adelaide. The planning and design of the project began in August 2018 and a blend of 5% renewable hydrogen with natural gas will be delivered from mid-2020.

The project is expected to highlight the complimentary nature of gas and electricity in meeting the decarbonisation challenge.

Industry, government and academia are working closely to deliver on targets. AGN’s Chief Executive Officer, Mr Ben Wilson, confirmed that customers receiving the 5% blended gas will not notice any practical or financial change:

“Customers receiving the blended 5% renewable gas will not notice any difference in their gas supply. There is no additional cost to customers receiving the blended 5% renewable gas and the change will not impact any arrangements these customers have with their existing natural gas retailer.”

Hon Steven Marshall MP Premier of South Australia and Hon Dan van Holst Pellekaan MP Minister for Energy and Mining Government of South Australia further reinforced South Australia’s commitment to working with multiple stakeholders:

“While South Australia is not alone in setting its sights on developing a hydrogen economy, the State has a first mover advantage. We believe we can deliver green hydrogen to our trading partners to meet their ambitious plans. We are already working with the Commonwealth and all State and Territory Governments to develop a National Hydrogen Strategy for 2020-2030.”

Scope & breadth

In a demonstration of Australia’s commitment to developing a sustainable hydrogen industry, further research and demonstration projects are in progress across the country. The learnings from these projects will elevate Australia’s technical capabilities and lead to larger scale implementations.

A focus will be on injecting renewable gas into existing networks, delivering cleaner gas across Australia and enabling a hydrogen industry that is financially competitive with natural gas within the next 5-10 years.

Existing projects across Australia:

  • ACT: Evoenergy – Hydrogen Test Facility
  • WA: ATCO Clean Energy Innovation Hub
  • NSW: Jemena Western Sydney Green Gas Project
  • VIC: Woodside Monash Energy Partnership
  • National: Future Fuels Cooperative Research Centre
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