Energy giant sees hydrogen outshining nuclear in race to replace coal

Energy giant sees hydrogen outshining nuclear in race to replace coal.

One of Australia’s largest energy utilities says clean hydrogen has the potential to become a viable fuel capable of replacing natural gas in power plants within a decade, eliminating the need to consider building expensive nuclear generators.

The federal opposition is fighting the Albanese government over its ambitious renewable energy rollout targets, and is pitching nuclear as the nation’s essential future source of power to compensate for coal exiting the grid. Critics of the Coalition’s push, however, say onerous capital costs and lengthy construction timelines make nuclear energy an impractical solution for Australia’s needs.

EnergyAustralia, the country’s third-largest electricity and gas supplier, believes nuclear energy is unnecessary and does not include the technology in its long-term planning. Instead, says EnergyAustralia chief executive Mark Collette, “green hydrogen” could be scaled up to become a commercially available power source faster than it would take Australia to establish a nuclear industry.

Green hydrogen – the name for hydrogen made using renewable energy – burns cleanly, meaning it could provide the same emissions-free back-up for the grid during times of low wind and solar generation as nuclear.

Mark Collette, said:

To us, it looks like green hydrogen may come to life faster for Australia than nuclear could, and we think speed is really important.

“So while we see the problem the same way – that there is that back-up needed for the system – we are really focused on where we think the fastest solutions could emerge, and that’s leading to our strategy around gas with the ambition of turning it into hydrogen.”

EnergyAustralia this year opened NSW’s first gas-fired power station in more than a decade, the $300 million Tallawarra B fast-start turbine, which can fire up to full load within 30 minutes and supply on-demand energy to the grid when it’s needed.

Power companies and the Australian Energy Market Operator believe “peaking” plants like Tallawarra B will be key to ensuring a smooth transition to renewables because they are emit less and can turn on and off more quickly than coal, and can dispatch power for longer durations than big batteries.

But Tallawarra B comes with an added capability: in addition to gas, its turbine can run on an initial 5 per cent hydrogen, which causes no greenhouse gas emissions. Next month, EnergyAustralia begins a $90 million upgrade of Tallawarra A, which will include enabling the use of up to 37 per cent green hydrogen once the fuel is commercially available.

Mark Collette, said:

“The combination of the two will create a demand pull for hydrogen in the region,”

“So far we don’t have a viable supply of green hydrogen … that’s something that will need a push from projects across the country.”

Green hydrogen is considered a promising future fuel due to its potential to displace gas and help decarbonise processes that cannot be simply electrified. However, it remains prohibitively expensive to make and is not yet viable at scale, with most of today’s hydrogen still made using fossil fuels.

There are signs that hydrogen is on track to become more viable, according to Collette, who says government-funded projects could prove the “catalysts needed to push it forward”. South Australia, for instance, is funding a 250-megawatt electrolyser device to make green hydrogen, and a 200-megawatt hydrogen power station.

The Grattan Institute calculates that the lowest-cost road to net zero emissions for the Australian electricity sector is for renewables to supply 90 per cent of the grid, and gas to supply the last 10 per cent.

While cautioning that there is much “hype” around hydrogen’s promise as a tool decarbonise any number of emissions-intensive processes, Grattan says supplying industrial heat for manufacturing and back-up power generation for the grid are among the areas where it has the most potential.

“Green hydrogen power plants using turbines or fuel cells could play a similar role to gas peakers, and would avoid the need for offsets or carbon capture and storage,” it said.

“The case for hydrogen in this context will depend on the techno-economics of the hydrogen supply chain, and these will vary with…