Can Australian Green Hydrogen Replace Russian Gas?

From NOT A LOT OF PEOPLE KNOW THAT


By Paul Homewood

This is a story that has got our old friend, Ambrose Evans-Pritchard, excited lately:

https://www.ft.com/content/0d14e8e9-63a1-400b-81af-e705d6eaaba9

According to AEP:

“Look at the deal just reached between Andy Fortescue and EON to ship green hydrogen (as ammonia) from his 200 GW planned solar and wind zone in Australia to Germany. Simply amazing. This is where the world is going”

The first thing to point out is that there is no deal to ship anything. It is simply a commitment to a research and study partnership. In particular, there is no obligation at all for Fortescue to spend a penny beyond this research. [Fortescue Future Industries, FFI, is, by the way the company. Andy Forrest is its Chairman – “Andy Fortescue” does not exist!]

But is green hydrogen really the breakthrough AEP thinks?

The first thing to note is that hydrogen does not grow on trees! FFI plan to use wind and solar power in Australia to produce hydrogen via electrolysis, an expensive process which also wastes some of the energy input.

The hydrogen is then combined with nitrogen in another expensive process to produce ammonia, which is more energy dense, and thus cheaper to ship. The ammonia then has to be cracked in another expensive process to split the hydrogen out again.

It therefore goes without saying that in energy terms hydrogen is much more expensive than the electricity used in the first place.

Solar power, of course, will be relatively cheap in the deserts of Australia. The IEA carried out a detailed study on hydrogen a couple of years ago, and reckoned that green hydrogen there would cost around $2.20 per kg:

Hydrogen Costs From Hybrid Solar Pv And Onshore Wind Systems In The Long Term

https://www.iea.org/reports/the-future-of-hydrogen

That translates to $72.60/MWh, say £55/MWh. But on top of that we need to add all of the other costs.

The current, extremely high wholesale price of gas is about 270p/therm, or £92/MWh. Even now,  green hydrogen is unlikely to offer any significant savings, once all of the other costs are added in.

But there is no reason why natural gas costs should stay as high as they are now. Historically, market prices, which have reflected the “real” costs of extraction, have been around £14/MWh.

Allowed to function freely, markets will quickly correct the current imbalance of supply and demand, and prices will fall accordingly. It clearly makes no sense at all to spend literally hundreds of millions developing a green hydrogen alternative.

Indeed if we go down this route, we are locking in the current unaffordably high prices of gas for the long term.

So why are FFI and E.ON getting into bed on this one? The answer is simple – subsidy hunting.

There is no question from a technical point of view that green hydrogen can be produced and shipped in bulk in this way. But neither FFI or E.ON, nor for that matter their bankers, are going to invest big money just in the hope that the Ukraine crisis goes on forever.

There is only one way this project will get off the ground. They will be wholly dependent on subsidies from the EU or German government. This is most likely to be in the form of Contracts for Difference, already being mooted for hydrogen production in the UK.

Such a scheme would offer a guaranteed price to FFI and E.ON, with the cost passed on to consumers.

Finally, let’s put the production numbers into perspective.

The deal talks about 5 million tonnes of hydrogen a year. That equates to 165 TWh. In comparison, the UK consumes 855 TWh a year. Europe as a whole uses close to 6000 TWh annually.

Clearly this FFI project will make no more than a dent in the overall gas market.

Finally, one last number. The FT talk of a 200 GW wind and solar zone in Australia to make this happen.

Currently the global capacity of solar power is only 707 GW, and in Australia it is a tiny 17 GW.

It seems like we will need an awful lot of solar panels, simply to replace a tiny amount of gas!

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tmatsi
April 7, 2022 6:11 pm

Even it is feasible (doubtful) it might take a while to martial the capital, the approvals and install the manufacturing infrastructure in Australia. There is also a small matter of availability of ships to transfer the Ammonia and the equipment to recover the Hydrogen at the other end.

LdB
Reply to  tmatsi
April 7, 2022 6:15 pm

Also the small matter of importing all the materials for all that construction to happen. So next we need a green steel plant and green concrete plant built before we can build all the green hydrogen plants infrastructure.

Last edited 1 month ago by LdB
gbaikie
Reply to  LdB
April 7, 2022 6:41 pm

“Australia alumina production in 2020 was 21.2 million tonnes. Australia maintained its position as the second largest producer of alumina and the world’s largest exporter, with 18 Mt exported in 2020. Australian primary aluminium metal production was 1.59 million tonnes in 2020, the world’s sixth largest producer.”

Australia make a aluminum with the solar electrical power, rather exporting nearly all their alumina.
Of course all the alumina wouldn’t be exported if they had cheap electrical power.
And don’t have cheap electrical power because of their silly “alternative energy” programs.

Scissor
Reply to  gbaikie
April 7, 2022 8:27 pm

That’s a lot of sand paper (and other stuff).

Dave Fair
Reply to  gbaikie
April 7, 2022 8:51 pm

How do aluminum processing lines handle the solar generation curve? Having been involved in providing relatively cheap and abundant hydroelectric energy to aluminum smelters in the Pacific Northwest, I tell you they don’t handle outages very well; in-process molten aluminum solidifies rapidly.

gbaikie
Reply to  Dave Fair
April 8, 2022 12:24 am

Well, if they were serious, they have high power transmission spanning the continent- going thru 3 time zones.
This not only helpful for solar energy, but useful for all the ways generating electrical power.

Dave Fair
Reply to  gbaikie
April 8, 2022 2:58 am

At what cost?

gbaikie
Reply to  Dave Fair
April 8, 2022 10:57 pm

Well generally, a high cost.
I would start with question of how much is the cost of land area needed for such transmission lines.
And btw like railroads of 18th century, land near the transmission line “could be” made more valuable.
This seems like it this gets into political issue- who own this land and do such owners want high power transmission lines.
So if politicians can determine how much the land costs for transmission lines, then that could be beginning point.
I would not have plans for one transmission route, rather have plans for many possible routes and have idea of costs of lands needs for each of these routes.
As general thing the faster such transmission can constructed, the better, but I would spend a lot time on the political issue of what lands would used.
Once have a few routes, get bids on the routes, and allow best bids to do it first, but add others bids, if first bid, is taking to longer to build it, then time given in the bid.
Or I think rather than 1 transmission route, it seems it would not be particularly bad if end up with two or three of them.

Graeme#4
Reply to  gbaikie
April 8, 2022 3:34 am

No thank you! Western Australia, with its cheap coal/gas electricity, does NOT want to be connected to the so-called “National” Grid, and see its reliable power disappear and its energy costs greatly increase. And at around A$2.5m for every kilometre of transmission line, why would anybody think that’s a good idea.

Drake
Reply to  gbaikie
April 8, 2022 9:50 am

Yep, and what % of the aluminum produced would need to be used for the conductors spanning these long distances? And how much steel to build the towers? And how much cement for the concrete foundations? And how much copper for the transformers? All of which materials that could be and should be used for the actual benefit of human beings in general.

BUT, you are correct, the construction of these UNNECESSARY transmission lines would subsidize solar and wind unreliable facilities for the benefit of the Crony Capitalists to be able to cash in even more than they already are.

gbaikie
Reply to  Drake
April 10, 2022 12:30 pm

I think solar energy works better on Mars, than on Earth even though TOA sunlight is 60% less at Mars distance. One reason
is you could make grid which connects all time zones on Mars.
Though lunar polar region work better, than Earth or Mars.
You use polar regions on Mars or the Moon because there is not thick atmosphere.
On Earth with it’s thick atmosphere you have about 6 hours per 24 hrs a day called peak solar energy. And on Mars our peak hours are 12 hours of 24 hours. And in lunar polar region, some locations call get 80% of year’s time with “peak solar hours”- lunar region is small, needed fairly small grid to get “all time zones or since Earth blocks lunar sunlight, one get sunlight about 99% of time with grid.
In Earth GEO orbit, one also has Earth blocking sunlight and so again about 99% of the time with sunlight, and in LEO one get sunlight about 60% of the time {Earth being closer blocks 40% of the time].
Anyhow solar panels were made for space, and they work in space, but generally they don’t work on Earth. And work the worst near Earth polar regions {like in Germany] but solar energy on Earth work best in deserts near or in the tropical.
Aussie land or Sahara desert is where solar panels would the best, and they work better if on grid which covers many time zones.
It is possible to make cheaper grids. A government making anything is never vaguely cheap, but making something covering many time zones is mainly a political problem- which might managed by private sector- though political bodies tend interfere. So it seems though it might seem too difficult elected political bodies, handle such political issues, it seems likely it’s only way it could be done.
If politicians imagine they can handle such politicians issues, I would say, show me, if you can.
But the construction of grid would need to done competitively, to get the lowest cost.

Otwayer
Reply to  gbaikie
April 8, 2022 4:40 am

Absolutely crazy as….don’t start me on steel, seriously wtf

mkelly
Reply to  gbaikie
April 8, 2022 6:52 am

When I lived in Iceland there was an aluminum smelter near Keflavik. The alumina was brought via ships from Indonesia (I think). It was smelted into large ingots because Iceland had very cheap abundant electricity from hydro.

I toured the plant and found it fascinating.

Streetcred
Reply to  tmatsi
April 7, 2022 8:43 pm

… and ships are substantial gross polluters, burning the worst level of tar !

April 7, 2022 6:13 pm

Hydrogen is the vague miracle that is supposed to make renewables reliable, the vaguer the better.

Scissor
Reply to  David Wojick
April 7, 2022 6:30 pm

As a chemist, I know that hydrogen is colorless. Chlorine is somewhat green, however.

niceguy
Reply to  David Wojick
April 7, 2022 7:43 pm

And allegedly far right French “RN” (Rassemblement National) is promoting that intermediate hydrogen scam! (intermediate: conceived as a better alternative for electrochemical storage notably for cars).

[Far right? Give me a break. They hate Macron because he is too “libéral” which means in France: Reagan-like.]

Stephen Mueller
April 7, 2022 6:35 pm

Shipping Ammonia on ships might be a problem if a ship sinks or is damaged.

Scissor
Reply to  Stephen Mueller
April 7, 2022 6:57 pm

Ammonia is already shipped all over the world.

Stephen Mueller
Reply to  Scissor
April 8, 2022 2:59 pm

not in the volumes their talking about.

Walter Sobchak
Reply to  Stephen Mueller
April 7, 2022 7:17 pm

You would be able to use the water the ship sinks in to scrub your kitchen floor.

Tom Halla
April 7, 2022 6:46 pm

The last energy crisis in the US was solved simply by voting Jimmy Carter out, and lifting price controls.
This is a political issue.

Alan M
April 7, 2022 7:15 pm

Yeah sure, can’t even get “Twiggy’s” name right

Walter Sobchak
April 7, 2022 7:21 pm

“The ammonia then has to be cracked in another expensive process to split the hydrogen out again.”

Why bother? The ammonia will burn, and can be used as a fuel.
https://en.wikipedia.org/wiki/Ammonia#Other

Scissor
Reply to  Walter Sobchak
April 7, 2022 8:15 pm

I can think of worse things.

Eng_Ian
Reply to  Walter Sobchak
April 7, 2022 10:37 pm

The reaction would have to be well managed to prevent the production of NO and subsequent NO2. Most countries have very strict limits on the production/emission of these molecules.

I guess that means using a low heat of combustion.

niceguy
April 7, 2022 7:39 pm

Why replace something that works for us?
I feel fine morally buying from Russia. Like 100%.
But then say I’m rooting against Russia (I really have no skin in that particular game but imagine).

Then I will buy the cheapest there is, even from Russia.
It isn’t like Russia is selling fine wine, so fine I’m the only one in the world capable of tasting it and no other person is willing to pay a comparable amount of money for it.
For most of what Russia sells, everybody in the world can appreciate (oil/gas). It doesn’t make a diff if I don’t buy it.
So either way, I want to buy Russian.

Michael Elliott
Reply to  niceguy
April 7, 2022 8:08 pm

So how much of this “Feel Good” exercise is going to be paid for by the Taxpayer.

Michael VK5ELL

niceguy
Reply to  Michael Elliott
April 7, 2022 8:46 pm

Trivia: for several year, France has been propping up (lending money to) allegedly “failing”, “nearly bankrupt” nat electricity provider EDF … all the while refusing to pay what the gov said they would repay to EDF!!!

So EDF buys back “renewable energy”(*) as asked by gov, at a crazy rate (above free market price), gov says we will repay the difference, never repays, EDF is in bad shape (bad for shareowners – France is the main shareowner!!! – bad for morals, bad for everything)…

Summary: France has just made every effort to make its national, mostly state owned, “publicly shared” electric energy corp look bad.
I don’t get why almost nobody was talking about that. Too trivial?

(*) the only workable definition of “renewable” is “free”, so how can you buy it?

Craig from Oz
April 7, 2022 8:01 pm

Solar power, of course, will be relatively cheap in the deserts of Australia

Really?

Here is a thing about the deserts of Australia – the vast majority of people don’t live there.

Also don’t believe for a moment you get 24/7 sunshine. I have lived and worked in regional Australia (Roxby). Not the most isolated place in Australia, but still far away from the nearest ‘real’ town to scare people who have never left a city. Some days in the winter we would never see the sun. Clouds all day. Cold wind. Never warmed up. Sure in the summer we often got wall to wall blue, but there were still days when we didn’t.

Sorry, but the phrase ‘of course’ has no place in that sentence.

Scissor
Reply to  Craig from Oz
April 7, 2022 8:16 pm

I don’t suppose there is any sand or dust there.

Streetcred
Reply to  Scissor
April 7, 2022 8:48 pm

The dust gets in everywhere … it will get inside the solar panel casing as well !
Can you even begin to imagine the maintenance issues including the water required to wash the panels !?

Last edited 1 month ago by Streetcred
Dave Fair
Reply to  Scissor
April 7, 2022 8:55 pm

Maybe you could train Wallabies to clean the panels? [Aussies, please don’t jump on me; it just sounded funny.]

Mr.
Reply to  Dave Fair
April 7, 2022 10:15 pm

No point in cleaning them.
The cockatoos would be back to crap all over them as fast they dried off.

RickWill
Reply to  Craig from Oz
April 7, 2022 11:13 pm

If you want the sunniest place in Australia then Halls Creek is the place to be. Minimum month is 8.94 full sunlight hours a day for a full tracking array. The best month is November at 9.94 sunshine hours.
https://www.rpc.com.au/pdf/Solar_Radiation_Figures.pdf

I have doubts that the cost estimate for making green hydrogen is based on the plant working at a monthly average capacity factor of 37%. And I do not know of any chemical process that likes to be constantly adjusting the process based on variable input of electricity.

To get continuous operation, they will need to produce excess hydrogen, store it on site and then use it to power fuel cells to keep the process running when the sun is not shining. Accounting for the capacity factor of the array and the system conversion losses, the rated hydrogen production capacity would be about 4 times the exported output. I doubt that the sums are based on such inconvenient detail.

April 7, 2022 8:02 pm

Well I remember by high school chemistry from years back and the other day I heard a quiz on the radio asking someone “which gas in the atmoshere is the most prevalent” or similar words.
In my mind, I immediately thought “nitrogen” and so did the poor guy who said the same thing, Of course the radio man said no “it is hydrogen”. Implying no doubt that Hydrogen cars must be the new in thing for saving the planet.

Well check this out – What elements are found in the Earth’s atmosphere? » Geology Science

or what-elements-make-up-the-earths-atmosphere.png (1200×648) (saymedia-content.com)

or lookup Wikipedia.

Cheers

Roger

Scissor
Reply to  Roger Roger
April 7, 2022 8:25 pm

Weird quiz question.

In the universe, hydrogen is the most abundant element.

Nick Graves
Reply to  Scissor
April 8, 2022 12:32 am

I’m beginning to think you’re all wrong and the answer IS stupidity after all.

Perhaps we should promote the idea of using stupendium (symbol Du) as an alternative fuel.

Dave Fair
Reply to  Scissor
April 8, 2022 2:55 am

Earth’ s atmosphere is not the universe.

Waza
April 7, 2022 8:27 pm

It is my observation that Twiggy Forrest practices a type of reciprocal altruism.
While he genuinely supports worthwhile causes, he also seems to support causes just to get people off his back.
He wants to be seen to be a good billionaire.

Streetcred
Reply to  Waza
April 7, 2022 8:50 pm

There’s a lot better that he can do than rob taxpayers.

RickWill
Reply to  Waza
April 7, 2022 11:26 pm

Not all of Twiggy’s project have turned out as well as the iron ore business – take a look at Anaconda Nickel. That has taught him to back sure things. Green hydrogen will be a subsidy farm without equal. It will take at least a decade to prove it has no economic merit but Twiggy will make squillions from all the governments spending their taxpayers money on more wishful thinking.

AndyHce
April 7, 2022 9:41 pm

Ammonia shipped to Germany, or elsewhere, might better be used iin the field to feed crops.

Spetzer86
Reply to  AndyHce
April 8, 2022 6:03 am

Might have to be if global supplies continue as low as they currently seem to be.

Gary
April 7, 2022 10:18 pm

No matter how you package it , it still takes more energy to produce H2 than it delivers.
Every billionaire has their “Spruce Goose””

Tom.1
Reply to  Gary
April 8, 2022 4:43 am

How does that work, actually?

Spetzer86
Reply to  Tom.1
April 8, 2022 6:05 am
Drake
Reply to  Gary
April 8, 2022 10:04 am

The “Spruce Goose”, built from mostly wood due to wartime restrictions, actually flew.

It was an amazing success from a design and engineering perspective.

AND it was built for an actual purpose, to transport troops across vast distances rapidly, unlike this scam which is to solve a NON-problem.

high treason
April 7, 2022 10:19 pm

It is pie in the sky stuff. The amounts of expensive storage containers will be massive and the amount of energy coming in will be unreliable.
I will bet anything there will be the odd explosive accident with tons of hydrogen at some stage mixing with what oxygen is left in the air (after the oxygen thieves have taken it) to create a massive Hindenburg type explosion. Perhaps the lithium batteries for EVs on board the ships with the containers of compressed gas will add to the woes of destroying the ships at sea.

Richard Page
Reply to  high treason
April 8, 2022 3:47 am

Speaking of which, I noticed recently that the numbers and types of cars on the Felicity Ace have been released. Quite a few of them are EV’s, as was suspected from the start.

Eng_Ian
April 7, 2022 10:39 pm

And where do you get the lovely pure water from to make the hydrogen. A desert is a desert isn’t it?

Tom.1
April 8, 2022 3:50 am

The first thing to note is that hydrogen does not grow on trees! FFI plan to use wind and solar power in Australia to produce hydrogen via electrolysis, an expensive process which also wastes some of the energy input.

The hydrogen is then combined with nitrogen in another expensive process to produce ammonia, which is more energy dense, and thus cheaper to ship. The ammonia then has to be cracked in another expensive process to split the hydrogen out again.

It therefore goes without saying that in energy terms hydrogen is much more expensive than the electricity used in the first place.

  • There are no processes that do not “waste” some of the energy input.
  • No, it doesn’t go “without saying”. You need to calculate costs and show why the process is not economical.

I don’t really disagree with what you’re saying, but you make the mistake, as so many do here, that because something is “green” is necessarily not practical or economic. The degree to which something is not economic matters, and needs to be demonstrated by calculation. Blithely discarding ideas based on preconceptions is just not the way to go about things.

Meab
Reply to  Tom.1
April 8, 2022 10:04 am

You are completely ignorant if you think that the energy it takes to separate hydrogen is all recovered when you burn the hydrogen. Some of the energy is lost to waste heat.

It never ceases to amaze me how those who shout the loudest often know the least.

Drake
Reply to  Tom.1
April 8, 2022 10:21 am

ALL GREEN ENERGY is UNECONOMIC!!

If it weren’t, it would not be so highly SUBSIDIZED. There would be no need to MANDATE utilities to purchase such crap. There would no MINIMUM MANDATED % of unreliable energy production for utilities.

So Tom.1, pick at all the NITS you want to, but “It therefore goes without saying ……”

ALL green “energy” solutions are wasteful EXPENSIVE solutions to non problems. Calculating the EXACT mount of the WASTE is what you seem to think is MOST important.

As liberals like to say, “If ONE CHILD” dies because of the waste of resources caused by the GREEN ENERGY mandates, “that is ONE CHILD TOO MANY!” And if the massive amounts of dollars wasted on GREEN ENERGY had been spent on electrifying the 3rd world over the last 20+ years, MANY CHILDREN, probably in the millions, would not have died.

Geoff Sherrington
April 8, 2022 3:53 am

Yes, I add my vote to the thesis that Twiggy is full of thoughts about milking subsidies.
Amazing how many of the ultra-wealthy are into subsidy mining.
Indeed, if you examine the sources of wealth of the ultra-wealthy, it often starts with a lucky break or a rare skill that helps to take money from the wallets of others, better than their competition can pickpoket it. But, luck and skill are usually just the seed. After that, there are several well pioneered channels to multiply that wealth fast. Again, these are seldom the result of the skill of the clever chappie, but more often the means to do the wholesale looting of economies that became ripe enough for picking through the acts of others.
That Margaret Thatcher theme of other peoples’ money looms large in these schemes. Subsidy mining is a good example. It is helped by ignorant and corrupt politicians.
Geoff S

Geoff Sherrington
April 8, 2022 3:54 am

If you burn ammonia to avoid the dreaded CO2 greenhouse gas, you make NO2, another dreaded greenhouse gas.
Where is the gain? Geoff S

Bob Irvine
Reply to  Geoff Sherrington
April 8, 2022 5:00 pm

Solar panels typically only reflect 8% of solar energy back to space.
They are designed to absorb solar energy.
Desert landscape has an albedo of about 35%.
We then have about 65 to 70 W/M2 of panel ((35 – 8) 27% incident solar in Australian desert) trapped at the earth’s surface causing significant extra global warming.
We then multiply that by 3 to account for the IPCC’s mythical feedback to warming.

I haven’t done the maths, but it is quite possible that these solar panels will cause more dreaded global warming per unit energy produced than a coal fired power station.

Kevin kilty
April 8, 2022 6:02 am

See that MOU in the picture? Burning that will release more energy than this deal is likely to.

Eric Vieira
April 8, 2022 7:59 am

Due to unavoidable diffusion through steel, a Hydrogen tanker would lose about 30% of
its cargo between US and the Netherlands. Australia is even farther away, so one can maybe have a 50% loss … not counting the losses during production … forget it!
The best vehicle for hydrogen is and will remain: hydrocarbons, preferably liquid ones at RT.

Last edited 1 month ago by Eric Vieira
Nik
April 8, 2022 12:45 pm

The photo shouts, “We fooled them, again!”

Tom.1
April 8, 2022 1:09 pm

According to this: Summary of Electrolytic Hydrogen Production: Milestone Completion Report (nrel.gov)

You might be able to produce electrolytic hydrogen for as little is $3/Kg, or $1.36/Lb, which, on a lower heating value basis, equates to $26/MM BTU. This is five times the cost of BTU’s from NG, and it is an optimistic estimate. Then there are all kinds of other costs. I hope the greenies aren’t counting too heavily on green H2.

ElectrolyticH2Cost.PNG
Bob
April 8, 2022 1:47 pm

Two words gas and nuclear. Third word coal to fill in the gaps. No wind, solar or hydrogen.

H.R.
April 8, 2022 8:12 pm

Can Australian Green Hydrogen Replace Russian Gas?



The simple answer is, “yes!”


Things begin to get sticky when the next question is “At what cost?”

So long as we aren’t attempting to do something not permissible by the Laws of Nature, we can do anything we want to do. It’s all a matter of cost.

What’s that you say? What we want to do will cost more than the annual Global GDP, if all of it is spent on the pipe dream du jour every year for the next 100 years.

Maybe it’s just me, but I’d say there would probably be intense arguments over whether Global Penury is worth it all or not if people understood that current policies are steering the World towards Global penury.

Dsystem
April 8, 2022 9:06 pm

And when you burn hydrogen, you emit the worst of the greenhouse gases – water vapor.

niceguy
Reply to  Dsystem
April 9, 2022 2:28 pm

They take it outside the equation by saying “non condensable greenhouse gases” now.

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