The NSW state government has moved a giant step forward towards a green hydrogen future by unveiling its strategy to attract $80 billion in new hydrogen infrastructure as it accelerates its shift to zero emissions offering $3 billion in incentives as it seeks to de carbonise the economy.
The state’s new treasurer and energy minister, Matt Kean unveiled the plan alongside the new premier and man he replaced as treasurer, Dominic Perrottet, along with its renewable infrastructure roadmap – to drive “deep carbonisation” and position the state as a ‘green energy superpower’.
Most importantly for the transport sector Perrotet and Kean are spruiking a ‘hydrogen fuelling network’ covering the state and most particularly the main trunk routes for interstate trucks from the Victorian border to Sydney and up the coast to Queensland along the Hume and Pacific motorways.
Heavy trucks and buses are seen as prime targets for hydrogen fuel cell power with the weight advantage offered by the need for a much smaller battery bank giving hydrogen a clear advantage over battery electric for long distance high grossing vehicles.
The NSW plan envisages 10,000 hydrogen fuel cell vehicles on the road by 2030, and 20 per cent of the government’s heavy vehicle fleet running on green hydrogen and the state’s plan includes exemptions from government charges for green hydrogen production along with the proposed network of hydrogen refuelling stations across the state.
The lack of refuelling facilities has so far held back a move to hydrogen powered cars and trucks with some car manufacturers including auto giants Toyota and Hyundai insisting that hydrogen fuel cell vehicles of all sizes can be competitive.
Premier Perrotet said that NSW major trading partners see hydrogen as part of their energy future, and that the state has the skills, infrastructure and renewable energy resources to compete globally in this new industry.
Perrotet now oversees a conservative government that is clearly embracing a net zero emission future and which unlike its federal L-NP colleagues has united its coalition partners from the Nationals, to forge ahead with decarbonisation in the face of some open resistance.
Treasurer Matt Kean revealed that up to $3 billion in incentives will be offered to green hydrogen producers who connect to parts of the network with spare capacity and will include a 90 per cent exemption from electricity network charges.
“Only Hydrogen will not only help the state halve our emissions by 2030 and get to net zero by 2050, it will create new opportunities for our heavy industry, and an economic bonanza of investment and jobs,” Kean said.
“This strategy is forecast to more than halve the cost of green hydrogen production in NSW and will make NSW the best place to invest in hydrogen in the world.”
The NSW announcement comes hot on the heels of an announcement by the Queensland government last week, revealing a a series of renewable hydrogen and green ammonia production plans, including two that will be part of a partnership with WA billionaire Andrew ‘Twiggy’ Forrest, along with a solar and battery hydrogen facility by CS Energy.
WA has also revealed its own plans for up to 100GW of hydrogen capacity by 2030, driven by huge projects proposed by CWP Global and Intercontinental.
Twiggy Forrest is driving the hydrogen push through his new subsidiary Fortescue Future Industries, which he founded and chairs, and said he welcomed the NSW strategy and its ambition to set itself up as an energy and economic superpower.
“At FFI we are doing everything we can as a business to lead the world effort to lower emissions. We are planning to deliver 15 million tonnes of renewable green hydrogen to the world by 2030 increasing to 50 million tonnes per year thereafter,” Forrest said.
Forrest’s plans dwarf the seemingly modest NSW goals that will aim to be producing just 110,000 tonnes of green hydrogen per annum from 700 mWs of electrolyser capacity for under $AU2.80 per kg by 2030, which is clearly only a fraction of the global capacity envisaged by Forrest.
The NSW plan has been given a strong endorsement by the Australian Hydrogen Council which applauded the state’s Hydrogen Strategy.
“Setting aside $3 billion to support the scale up of our hydrogen industry is a leap in the right direction, a clear demonstration to us that the NSW Government is serious about meeting its net zero commitments and the role of hydrogen to get there,” said CEO of the Australian Hydrogen Council, Dr Fiona Simon.
“The strategy contains precisely the type of policy commitments, targets and funding that we have called for in our recent white paper ‘Unlocking Australia’s Hydrogen Opportunity’, and we are delighted to see the NSW Government taking this next evolutionary step.
“In line with our white paper, the NSW Government has committed to prioritising heavy transport, trucks and refuelling infrastructure; heavy transport is a key sector that needs hydrogen to decarbonise, replacing petrol and diesel with hydrogen.
“Australia has enormous opportunity to lead the world in the production, use and export of hydrogen and the NSW Government has demonstrated the leadership needed to drive the creation of the clean hydrogen industry.
“We are glad the NSW Government has stepped up to the level at which our trading partners are competing. Plans and funding like this will mean Australia should not miss the boat on international opportunities and instead, will be well positioned to be a leading producer and user of hydrogen in Australia and globally.
“This kind of strategy will draw through huge amounts of investment needed to secure local jobs of the future, from now.
“An Australian hydrogen industry will require large scale electrolysers, renewable electricity, hydrogen storage, water and water pipelines, electricity infrastructure, CCS as appropriate, and hydrogen pipelines. Planning, with the right funding and targets, is a vital part of getting this industry to scale and we look forward to working with the NSW Government to chart the State’s path to net zero using hydrogen,” Dr Simon concluded.
“Achieving these stretch targets will transform NSW into Australia’s largest consumer of green hydrogen and position the State to become a hydrogen export superpower,” the state’s hydrogen plan states.
The NSW plan assumes that the value of the concessions will cut the cost of producing green, or renewable, hydrogen by at least two thirds overall by 2030 but does not include technology advances. However it believes further cost reductions achieved through technology innovations and the falling cost of renewable energy should put the state within reach of $2 per kg cost for green hydrogen by the end of the decade.
The concessions NSW has proposed for networks will, according to the plan, see new electrolysers in operation by 2030 with concessions of approximately 90 per cent for network use of system charges, which it says will ‘incentivise the use of existing spare capacity in the state’s network infrastructure and incentivise investment at scale to reduce costs even further’.
“Without hydrogen, a decarbonised energy system based entirely on electricity would be more flow based requiring demand and supply to be constantly matched in real time, across wide distances,” the NSW plan states.