Australia needs to build an end-to-end hydrogen ecosystem across the nation serving multiple hard to abate use-cases in order to meet our 2050 decarbonisation commitments. Avoiding a monopoly trap is key.
The lack of advanced manufacturing of hydrogen at scale is currently hindering Australia’s ability to keep pace with global peers like the UK, which is rapidly deploying long-term hydrogen strategies across several industry verticals, including transport and aviation.
Even the United States, a late starter in this area, has earmarked hundreds of billions of dollars to overhaul production, storage, and distribution of hydrogen.
“Australia currently has no granular plan to match the UK or US,” Rux Energy founder and chief executive Dr Jehan Kanga told the Commercial Disco podcast. The conversation also featured Rux Energy’s ecosystem and communications manager Nicolle Lane.
From a limited pool of deep tech investors and the high-risk nature of CleanTech to the gaps in advanced manufacturing, Australia faces the challenge of creating and filling 100,000 new jobs in hydrogen, a target set by industry and government to achieve by 2030.
Dr Kanga highlighted that the transition to net zero would require an estimated $685 billion over the next 26 years to 2050.
The National Reconstruction Fund’s $15 billion is a commendable start, they said, but more needed to be pooled in order to meet the broader financial needs.
The goal extends beyond clean energy; it encompasses supporting every business in its decarbonisation journey, from industry giants to local shops, without falling into monopolistic practices. While several regional technology hubs in Australia are working on hydrogen initiatives, they must be more integrated and cohesive.
“We have the tech,” Ms Lane said, but we quickly realised the importance of collaboration across the entire decarbonisation and net zero movement.”
The dominance of a single company in supply and distribution won’t align with a net-zero future. Avoiding such monopolies promotes innovation and ensures universal access to this clean energy.
While Rux Energy primarily specialises in hydrogen storage as an advanced materialds company, recent visits to the UK, US, and Singapore have shifted its focus towards coordinating the broader ecosystem, encompassing distribution and supply.
“Three key pillars underpin the global hydrogen ecosystem,” Dr Kanga said, “production, storage, and distribution are pivotal in steering our green revolution.”
While the goal is to produce hydrogen economically at $1 to $1.5 per kilo. Current UK data places production costs between £5 and £10 per kilo. The monopolistic nature of supply chains inflates these costs, resulting in costs to users of up to £300 per kilo.
“This could be a potential crisis for our ecosystem if left unchecked,” Dr Kanga said. “It jeopardises ongoing trials in sectors like aviation and aerospace.”
During their visit to Singapore, Rux Energy pinpointed specific challenges. Singapore, unable to produce its hydrogen, contends with intricate import protocols. Moreover, special bureaucratic approvals come into play for every 200,000 tons of hydrogen moved.
These insights underscore the urgency for Australia to champion a collaborative method in hydrogen supply and distribution. Moving away from monopolistic tendencies was crucial for successfully shifting to a net-zero future.
“With the right policy settings in place, Australia has vast potential in the hydrogen sector,” said Dr Kanga.
Dr Kanga expects there could eventually be a million workers within hydrogen alone within Australia, going beyond the immediate target of creating 100,000 specialised jobs by 2030.
With the many-to-many ecosystem, numerous farms will produce hydrogen, requiring a vast workforce for production, distribution, and varied applications.
Australia will need to welcome global expertise to supercharge its hydrogen initiatives.
“We might have to bring in specialists in advanced manufacturing, automation, and AI from nations like Germany, Taiwan, and the US.”
Dr Kanga also suggests that Australia should prioritise diverse investments in the energy sector rather than focusing solely on hydrogen.
The future of energy technology is uncertain, and placing bets on multiple options can help navigate this unpredictability.
By diversifying their approach, countries and companies can be better prepared for the future. This broader strategy would increase the chance of successfully transitioning to sustainable energy sources.
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