Commercial scale hydrogen years away says ARENA boss Darren Miller
Hydrogen along with carbon capture and storage were named among the top investment priorities for the Australian Renewable Energy Agency on Thursday.
Hydrogen production at commercial scale may still be a decade away while coal, gas and pumped hydro generation will become more challenging to develop in Australia, the head of the nation’s renewable energy agency said.
Hydrogen along with carbon capture and storage were named among the top investment priorities for the Australian Renewable Energy Agency on Thursday, after the federal government redrafted regulations opposed by Labor and the Greens to allow low emissions technologies to be bankrolled through the scheme.
ARENA chief executive Darren Miller said rolling out hydrogen at scale could take up to 10 years.
“It depends what side of the bed you wake up on any given day as to how optimistic you’re feeling. But I think at the very minimum it’s going to take five years before we get real confidence that these costs are coming down to the levels we want, and probably more realistically a decade,” Mr Miller told a forum where he outlined ARENA’s investment plan.
Still, he conceded the industry had a poor forecasting track record and technology leaps could easily change the timeline.
“The history of this industry is that we get it wrong all the time, systemically wrong. We underestimate the potential of technology to improve, to get confidence from that and for the world to jump on to that and to scale that.”
Australia’s electricity grid is undergoing a rapid transition to renewables, piling pressure on traditional energy sources like coal.
The ARENA boss expects the fossil fuel along with gas and pumped hydro to become more challenging to develop this decade, drawing a contrast with the big technology leaps that have slashed the cost of solar, wind and batteries in the last decade.
“Technology doesn’t get more expensive over time, certainly over any reasonable time horizon. It just gets cheaper and better and easier to scale,” Mr Miller said.
“It’s completely different to natural resources like gas and coal and even trying to build pumped hydro. These things get harder over time because the sites that are available become scarcer, more distant and deeper underground.”
ARENA’s funding will be directed towards the two technologies of hydrogen and carbon capture alongside energy storage, soil carbon management and projects that support the transition to low emissions aluminium and steel and cut the cost of renewable energy generation.
Some of Australia’s biggest energy investors – including iron ore magnate Andrew Forrest – are backing hydrogen projects spanning the nation, betting the clean technology can spur an export opportunity eventually rivalling the country’s fossil fuel revenues.
Labor teamed up with the Greens in June to veto expanding the investment mandate of the renewable energy agency to include carbon capture and hydrogen. Labor argued that while it does not oppose the technologies, the ARENA fund should be used only to fund renewables.
Redrafted regulations saw the changes go through with a focus on Australia’s five low emissions priorities, including clean hydrogen and CCS technologies.
ARENA has provided $1.8bn in funding since 2012 to more than 600 renewable energy projects with a value of just under $8bn.
