In this defining decade, our energy choices are critical

Dr Jehan Kanga

I won’t waste your time. We have 26 years to reach net zero. Let that sink in.

What I do want to spend time on is what Rux Energy believes are the critical elements that we, as a nation and as a united world front, need to ensure that we don’t just meet our 2030 targets, but secure the success of our pathway to a net zero 2050.

Australia is a world leader in breakthrough energy technologies for both fossil fuels and clean technology. As for renewables, Australia is responsible not only for the discovery of the photovoltaic (PV) solar cell, but also for continuing to break its world efficiency record for 30 out of the next 38 years.

Today, discovering technology just isn’t enough – to reach net zero, we must continue to innovate and improve. The phenomenon of solar tech, where it’s become cheaper to deploy new iterations than to refuel the cheapest existing fossil power stations, is unprecedented. We need that to become the standard.

In 2010, global key opinion leader and futurist Ramez Naam studied the cost of solar through the lens of Moore’s Law, observing an exponential decline in cost as technology scales. He forecast that the cost of solar would drop at five times the rate that the IEA believed it would – and then saw it drop even more.

In his TED Talk explaining the phenomenon, he shared:

“This deception in understanding the pace of cost decline has led to a massive underestimation of the pace of growth… Clean energy technologies are technologies, and they drop in cost like technology. As they are scaled, they come down in price. Meanwhile, fossil fuels are commodities and fossil fuel prices fluctuate over time.”

The Rux approach – The three key components

Manufacturing is a culture

Rux has spent five years studying and applying Chinese, Korean, Japanese, Taiwanese, and German “Mittelstand” advanced manufacturing. We’ve developed a theory for manufacture that combines the best of these global approaches, clustering diverse capability, high R&D intensity, vertically integrated supply chains, cooperative product development, training, and end-to-end manufacturing investment.

We’ve been building a clustered manufacturing ecosystem, combining strategic focus with geographic diversity. We foster mutual interdependence between ourselves and our partners, while still building our own technical resilience. 

Until now, manufacturing has been seen as a silo not a system – we believe that the future success of the world relies on a paradigm shift that places individual manufacturing organisations within a framework of domestic and international collaboration.

Ecosystems and collaboration over competition, coordination over isolation

It’s undeniable to Rux that we need to work together to abate at least 17.3 gigatonnes of carbon each year by 2049.

Governments worldwide need to provide funding to trial all novel technologies to determine their full end-to-end efficiency and safety, and whether they are stopgaps or viable long-term solutions. 

The risk of not collaborating is that the world won’t achieve its collective goals. Cross border co-investing, like the Australian Singapore Green Economy Agreement, is a critical tool for governments to enable data sharing and technology translation at pace, avoiding double work, and promoting innovation additionality for every dollar invested.

The risk of not coordinating is that governments and large companies, currently operating in isolation, make suboptimal investment decisions. Scaling mature technologies that are unlikely to get cheaper because they don’t satisfy Wright’s Law requirements will inevitably create blockers to scale investment for more efficient and safer alternatives in five to 10 years’ time. It’s a process error we simply do not have time to make.

In other words, taking more time now to find the options that will ensure the success of the long-term goals rather than the immediate ones is actually the fastest pathway to net zero. And this is only possible when we work together.

Global leadership

As a middle power, with proximity to Asian growth economies, and strengthening bilateral ties with the largest regional economies across the Indo-Pacific, Australia is uniquely placed to lead the transition, while enabling economic development by providing the technology to deliver low-cost green energy for five billion people. 

Despite the sophistication of our technology, we tend to take a back seat in driving change. The time has come for Australia to pick up the mantle of world leadership.

We need to coordinate with and directly fund our academic and vocational tertiary training institutions to upskill the several million workers required to deliver the next 26 years of energy transition, manufacturing, and engineering capability.

We need to leverage Australia’s education export reputation to deliver training to hundreds of thousands of foreign students, with specific energy transition courses across manufacturing, supply chain, logistics, software, engineering, and, most importantly, in safety and certification.

In doing so, we enable a faster, more efficient, and safer energy transition, with a strong social licence to operate and deliver 360 sustainability, rather than just tonnes of carbon abatement. And we project our democratic values to the world, enabling a more just, equitable and inclusive energy transition.

The five choices Australia must make

Australia faces five key decisions that will redefine our role in the world, and the very path the world will follow.

Australia can take the lead on technology deployed for global transition – if we choose to.

Australia can become a manufacturing powerhouse with our first mover advantage in two out of three core technologies – if we choose to.

Australia can create a million jobs across the export of new energy, including supply and distribution ecosystems, new gold standard global safety and certification methods, and deliver 360 sustainability protocols – if we choose to.

Australia can take the lead as a collaborator instead of a competitor, because the goal isn’t to win, it’s to enable every other country to join us, so the planet walks arm in arm across the net zero finish line.

Australia can become a world leader, delivering a peaceful and coordinated energy transition. Leveraging our globally unique research, our gold standard educational and vocational training institutions, and our democratic values, embody the essence of what is required to achieve a just, equitable and inclusive transition.

If we choose to.

The time has come for Australia to make the right choices.

The three pillars of hydrogen production, and the opportunities they create

The green hydrogen value chain has three pillars: production, storage and distribution, and use. Innovation is required in all three to improve usability and drive down the end-consumer cost of hydrogen. Australia is uniquely placed to drive this innovation.

Pillar one: Production

The WESC Insights Working Paper estimates current green hydrogen production to be between US$3.40 and $5.62/kgH2.

While Australia, Oman and Chile are at the frontier commercially, producing the lowest cost hydrogen in the world using mature tech and without subsidies, the US government has shifted the cost curve, and set a bold new foundation for ecosystem development.

Known within US-DoE circles as “1 1 1”, the June 2021 US Energy Earthshot seeks to reduce the cost of zero emissions hydrogen to $1 per kilo in a decade. The US government’s Inflation Reduction Act (IRA) provides a US$3 per kgH2 subsidy, potentially bringing US subsidised green hydrogen down to US$1 by 2024. 

Subsidy by itself is not sustainable, but the Biden Administration has created a 10-year window where the world can immediately start solving downstream value chain challenges in hydrogen distribution and use.

In his recent essay on the success of US industrial and decarbonisation policy, economic blogger Noah Smith comments:

“We don’t really know what ‘industrial policy’ means yet; beyond the specific examples of boosting semiconductors and green energy, we don’t have a general framework to think about which industries to support, or where, or how.”

But we do know it’s working and transforming the US economy at a pace not seen in nearly 100 years, and bringing the world into rapid alignment with it. 

Enter Australia’s trump card, Hysata, a small startup founded in Wollongong, promising a radical step change in the total efficiency of green hydrogen production. 

Its breakthrough technology, has all the attributes of a scalable Type 1, and according to Wright’s Law, they’re likely to exhibit the steepest of learning curves, mirroring those unprecedented 30 years of solar PV record breaking. 

Australia’s opportunity is to enable focussed rapid commercialisation, and to scale, manufacture and deploy Hysata’s innovation domestically, giving Australians the value of lowest first mover cost production, then build vertical supply chains to deliver this innovation worldwide.

Pillar two: Storage and distribution

Hydrogen is notoriously difficult to store. As a gas it has low volumetric density or, in simpler terms, it hates to be compressed or liquefied, rendering both methods cost and efficiency prohibitive. The other possibility, chemical storage, is plagued by energy losses, as well as extreme toxicity and corrosivity hazards. To date, no alternatives have been viable.

But Australia has a second trump card in Rux Energy. Our advanced materials – MOFs – radically increase the volumetric density and efficiency of hydrogen storage, and pose none of the typical safety hazards. We’re working closely with our partners to create an end-to-end solution that radically improves storage efficiency across unlimited use cases and territories.

Our goal is $1.50 by 2030, a 10x reduction in storage and local distribution costs, requiring not only scaling of Rux tech, but mass coordination of an intermodal freight ecosystem to move hydrogen at enormous scale while pipelines are still in development.

Like Hysata, our core technology and the supply chain organisations we’re partnering with are Type 1 – highly scalable, integratable, factory manufacturable and standardisable – and we’re coordinating with 12 countries to ensure we’re getting the optimisation right.

Rux is intentionally hacking Wright’s Law, taking data from our own manufacturing learnings to model the future. We’re funding ecosystem feasibility and supply chain trials to create a universal blueprint for replicable hydrogen supply chain ecosystems – an IKEA cheat sheet for the most complicated build in the world.

So Australia’s second opportunity is to follow Rux’s lead, and enable rapid commercialisation to help scale not just Rux’s technology, but also the Australian manufactured components we’re relying on to deliver our solution, including composite tanks, resins for composites manufacturing, advanced alloys for tubing and valves, and advanced safety sensor hardware and software. 

If we can get the blueprint right, here in Australia, we can scale, manufacture, and deploy domestically so Australians access the value of lowest cost storage and distribution first, and then share these learnings globally to improve the chances of success worldwide. 

Pillar three: Use

Pre-2020, the most efficient way to use stored hydrogen was to run it through a fuel cell, achieving 50-60 per cent systemwide efficiency.

Fuel cells are beautiful technologies, originally developed by NASA and US space program manufacturers over the last 50 years. While their 60 per cent efficiency is an improvement compared to 35 per cent for an internal combustion engine (ICE) diesel truck, it’s still not good enough to meet our net zero needs.

And this is where international collaboration becomes imperative.

Carnot is a UK startup developing internal combustion engines which achieve an unprecedented 70 per cent efficiency. This creates the potential to revolutionise the application sector by lowering the cost of hydrogen to end-users, thanks to the 15 per cent less hydrogen needed to run machinery or vehicles. 

Regardless of the origin, we must trial and deploy the best tech for the job.

Australia has an opportunity to build cross border collaboration, and we must step up our international participation.

Final message

The world has to move fast, because we’re running out of time to reach net zero. Australia has to move even faster, because we have a once-in-two-century opportunity to act as a leader, enabling the next, most difficult stage of the energy transition: decarbonising the world’s hardest-to-abate sectors with green hydrogen. 

By leveraging first mover advantages in hydrogen technologies, we can foster a high productivity, high wage advanced manufacturing boom in Australia.

But we need to do it the new way: collaboratively, taking a strategic, coordinated, mission critical, systems thinking approach to plan the decades in front of us across every sector, but particularly in R&D, manufacturing, education and training, and energy.

And if we do it with our values in mind, we’ll change the world.

Dr Jehan Kanga is the founder and chief executive of Rux Energy, an advanced materials startup delivering breakthrough volumetric densities for dispatchable hydrogen, in partnership with the University of Sydney, UNSW and ANSTO. Rux Energy received the Products and Markets Award for Best Innovation at Hy-FCell Stuttgart 2022, one of the most important hydrogen technology conferences in Europe. Dr Kanga also chairs the Hydrogen Committee for the Sovereign Manufacturing for the Automation of Composites (SoMAC) CRC, and was named Young Professional of the Year 2021 by the India Australia Business Community Awards.

Do you know more? Contact James Riley via Email.

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