Latrobe Valley Webinar Recording and Q&A

HESC held a webinar on the 25th of November, 2020 to discuss how the Latrobe Valley can be at the forefront of the national energy transition to lower emissions via clean hydrogen.

Panellists included:

  • Dr Patrick Hartley, Leader of CSIRO’s Hydrogen Mission
  • Jeremy Stone, Non-Executive Director of J-Power Latrobe Valley
  • Ian Filby, Project Director of the CarbonNet Project
  • Hirofumi Kawazoe, General Manager of Hydrogen Engineering Australia Pty Ltd
  • Jane Oakley, Chief Executive Officer of Committee for Gippsland

Q&A

Is there a risk that a commercial project becomes commercially and socially stranded by 2030 if the cost of renewable hydrogen comes down as predicted?

We encourage all forms of clean hydrogen production because it is a central pillar of the energy transformation required to limit global warming.

Urgency: However, as the consequences of climate change are tied to the cumulative emissions in the atmosphere, every year of delay adds to our problem.

Price: Additionally, the practical reality is that hydrogen made from fossil fuel with Carbon Capture and Storage (CCS) costs 2-3 times less than hydrogen from renewables. While parity may be achieved as soon as 2030, we believe action must be taken between now and then to reduce CO2 emissions.

Scale: Scaling up production of clean hydrogen from coal with CCS is considered comparatively simple compared to renewable methods because the technology has been in use for decades – globally there are five low-carbon hydrogen production facilities with CCS in operation[1].

Rapid scale is deemed necessary to meet projected hydrogen demand and reach net zero emissions by 2050[2]. A commercial-scale HESC Project could operate 24/7 and would produce up to 225,000 tonnes of hydrogen per year in the 2030s, as referred to by the Japanese New Energy and Industrial Technology Development Organisation (NEDO) in 2015. 

We believe that all forms of clean hydrogen are needed to meet demand and address climate change.

Why Latrobe Valley coal over any other type of coal?

The HESC Project will create a sustainable solution for the use of abundant Latrobe Valley coal reserves that will lower global carbon emissions.

Latrobe Valley coal has been identified as one of the most cost-effective, stable and efficient sources for the creation of hydrogen with significant production efficiencies when compared with other sources. 

Producing clean hydrogen using a fossil fuel with carbon capture and storage (CCS), CCS is presently, as assessed by the International Energy Agency (IEA), the most economical way to produce clean hydrogen at scale.

When it comes to this type of hydrogen production, Victoria has a significant competitive advantage. This is due not only to the coal resources but also due to its world-leading potential for CCS, all within the Gippsland region. With ten years of development behind it and successful testing to date, CarbonNet presents an affordable CCS solution for the HESC commercial phase.

What is Australia’s advantage over other countries for exporting hydrogen?

The Australian Renewable Energy Agency (ARENA), in a report released in August 2018 entitled Opportunities for Australia from hydrogen exports, examined Australia’s competitive position relative to other potential suppliers of hydrogen for export.

Regarding potential exports of hydrogen to China, Japan, Republic of Korea and Singapore, it found Australia is in a relatively good competitive position due to factors such as:

  • The landed cost of hydrogen
  • Proximity to the market
  • Having well-established energy trading relationships – for example, Australia and Japan have an important economic relationship and the HESC project will further strengthen the enduring trade and investment ties between Australia and Japan.
  • Experience in large scale energy infrastructure construction
  • An ability to supply low or zero-carbon hydrogen from a range of sources.

What will be the cost of hydrogen produced in a commercial HESC Project?

One purpose of the HESC Pilot is to conduct an analysis of the economic feasibility of producing hydrogen gas from coal in the Latrobe Valley, liquefying it and exporting it to Japan.

According to 2019 data from the IEA, hydrogen made from fossil fuel with CCS costs significantly less than hydrogen from renewables – USD $1.20 –2.60/kg, compared to USD $3.20-7.70.

HESC Project Partners are confident they can deliver cost-competitive hydrogen.

Will hydrogen trucks carry liquid hydrogen from the Latrobe Valley to Port of Hastings or will a new hydrogen pipeline be required to export hydrogen to Japan?

In the HESC pilot, the gaseous hydrogen will be transported from the Latrobe Valley to the Port of Hastings by pressurised tube trailer, with one trip expected each month for a period of three months. The hydrogen gas is liquefied and then loaded on to a specially designed marine carrier for shipment to Japan.

A commercial-scale project will require a hydrogen pipeline from the point of production to the port (location to be confirmed).

Is the HESC project committed to using liquid hydrogen or are other options, such as ammonia or LOHCs, on the table as well?

The HESC Pilot is focused on liquid hydrogen to prove its technical and commercial feasibility as a hydrogen carrier. The reason why the HESC Project uses liquid hydrogen as a hydrogen carrier is that it reduces the volume dramatically (1/800th) which is ideal for mass transport and storage.

Liquefied hydrogen does not need to be converted back to hydrogen (if ammonia or LOHC is used as a carrier, it is necessary to convert them back to hydrogen). There are some additional challenges with ammonia carrying methods that mean that in some areas this methodology is not preferable.

How much hydrogen does the tank on the ship hold?

The liquid hydrogen tank on the Suiso Frontier has a capacity of 1,250m3.

What is the HESC Projects future in terms of commercialisation?

The pilot phase will need to be completed and the results reviewed before detailed planning for the commercial phase can take place. The HESC partners will consider in detail the economics, engineering, environment, and community. If the pilot phase is successful, the HESC project is currently planned to enter its commercial phase in the 2030s.

What is the percentage of the emissions that can be captured for this project?

In a commercial HESC Project, a target of 90% of CO2 emissions from the gasification and refining process will be captured.

Has there been incident management planning conducted to ensure any potential hydrogen leaks, fires or explosions are quickly mitigated? If yes, will these be made available?

Pure hydrogen gas is not toxic and cannot ignite or explode spontaneously. An ignition source and oxidizer (like oxygen) must be present. When handled responsibly and safely, hydrogen is no more or less dangerous than other flammable fuels like natural gas and gasoline.

Measures have been put in place along all stages of the supply chain to prevent, detect and mitigate the risk of hydrogen leaks. These are in accordance with government standards for portable gases and fuels. Additional measures will be used to safely store liquid hydrogen which must be kept at extremely low temperatures, including the development of purpose-built ships for overseas transport.

The HESC project aligns with relevant Australian Standards. Hydrogen production facilities have been operating in Australia for many years. Furthermore, HESC Project Partners have conducted various risk assessment processes including HAZID (Hazard Identification Process) and HAZOP (Hazard Operability Study) and have installed necessary equipment such as a hydrogen leak detector and a ventilation system. Partners also have contacted local authorities such as the CFA (Country Fire Authority) to share the outcome of a safety study, request a review and obtain their approval. 

What percentage of CO2-e produced, including transport, liquefaction and re-gasification will be stored in CCS?

In a commercial HESC Project, a target of 90% of CO2 emissions from the gasification and refining process will be captured.While CCS will be a key aspect of a commercial-scale phase, CCS will not feature during the pilot project due to the small volumes of CO2 involved. During the pilot phase, the hydrogen gasification process will create a small amount of CO2 – equivalent to annual emissions from about 28 cars. Carbon offset measures have been arranged.

Does the strength of unions in the valley hinder future investment decisions in the region?

Further investment in HESC will be informed by technical feasibility, social licence to operate, market demand and other macroeconomic factors. HESC Project Partners are committed to working cooperatively with all stakeholders to support jobs and economic growth in Gippsland. We believe that many local stakeholders share our view that producing clean hydrogen with coal provides a viable pathway for the Valley’s energy workers looking to transition to a new industry – the CFMEU recently wrote an article on this topic.  

For HESC, is there a hydrogen purity target for Australia to meet export requirements?

We are targeting 99.999% purity.

How many tonnes of CO2 is generated (and captured) when producing 225,000 tonnes of hydrogen?

The purpose of the HESC Pilot Project is to understand expected CO2 generation. CSIRO data states that coal gasification with CCS produces around 0.71 tonne of CO2 per tonne of hydrogen[3]. HESC will refine the CO2 generation it expects in a commercial phase after the pilot. In a commercial HESC Project, a target of 90% of CO2 emissions from the gasification and refining process will be captured.

When factoring in transport, liquefaction and re-gasification, what percentage of CO2-e is saved compared to burning brown coal in existing Latrobe Valley Power stations?

Hydrogen is a central pillar of the energy transformation required to limit global warming. Hydrogen can play a role in this transformation in more ways than one, while power generation is the core outputs of today’s coal-fired power stations provide

Australia’s National Hydrogen Strategy contains insightful calculations on the CO2-e avoided if hydrogen is used as a fuel across several use cases. CO2-e is a carbon dioxide equivalent, a metric used to compare the emissions from various greenhouse gases to determine their individual and total contributions to global warming.

The strategy states that replacing Australian grid electricity with electricity from hydrogen avoids 15kg CO2-e per kilogram of hydrogen used. See page 17 of the strategy for further examples.  

HESC endeavours to calculate this percentage of CO2-e saved in the future.

The focus seems to be on export, but if you get to full commercialisation could there be a split to some domestic supply, i.e. dual supply?

The HESC Project was conceived with the primary aim of producing hydrogen in Australia for export and use in Japan. Interest in hydrogen has since grown both internationally and domestically, as industry and governments around the world investigate and execute decarbonisation strategies. HESC Project Partners are supportive of the export of hydrogen, domestic use, or a combination.

Is your gasification process effectively zero emissions? 

The gasification of coal to make hydrogen produces CO2. For this reason, a commercial HESC Project is contingent on being able to capture and safely store this CO2. The nearby CarbonNet Project provides a suitable CCS site. While CCS will be a key aspect of a commercial-scale phase, CCS will not feature during the pilot project due to the small volumes of CO2 involved. During the pilot phase, the hydrogen gasification process will create a small amount of CO2 – equivalent to annual emissions from about 28 cars. Carbon offset measures have been purchased.

In a commercial HESC Project, a target of 90% of CO2 emissions from the gasification and refining process will be captured.

Does the CO2 reduction estimate include the fossil fuel used to liquify the gas at Hastings?

A commercial-scale HESC Project could produce up to 225,000 tonnes of hydrogen per year in the 2030s, as referred to by NEDO (the Japanese New Energy and Industrial Technology Development Organisation) in 2015. We estimate this could reduce global CO2 emissions by 1.8 million tonnes per year, equivalent to taking 350,000 cars off the road.

This estimation has been calculated as follows: Most of the hydrogen produced today is via steam methane reforming (SMR) with no CCS. Data in Australia’s National Hydrogen Strategy reports that this produces around 8.5 tonne[4] of CO2 per tonne of hydrogen. CSIRO data states that coal gasification with CCS produces around 0.71 tonnes of CO2 per tonne of hydrogen [5]. Therefore, the HESC Project could save 1.8 million tonnes of CO2 per year (8.5-.71*225,000).

[5] Internal CSIRO calculation on lifecycle emissions for coal gasification with CCS: Bruce, S, Temminghoff, M, Hayward, J, Schmidt, E, Munnings, C, Palfreyman, D & Hartley, P 2018, National hydrogen roadmap, CSIRO, p67

What’s the energy source for maintaining the hydrogen in liquid form during shipping to Japan? Will hydrogen be lost in the journey if it is the energy source?

The marine carrier will use cryogenic storage tanks, which feature double-shell structure with vacuum insulation, to contain the liquefied hydrogen and keep it at a very low temperature. No energy source is needed.

One of the key elements of transporting liquefied hydrogen is preventing heat from turning the liquid hydrogen back into a gas.

This is known as ‘boil off gas’. Kawasaki Heavy Industries (KHI) is developing specialised insulation technology to respond to this challenge.

Is there any other international market other than Japan?

In a recent joint media release from Minister for Trade, Tourism and Investment Simon Birmingham and the Minister for Resources, Water and Northern Australia Keith Pitt, Australia was positioned ‘as a future hydrogen export powerhouse.’ The release announced the signing of an agreement with Germany that initiates a joint feasibility study into the potential for closer collaboration and the future development of a hydrogen supply chain between our two countries.

This partnership with Germany comes in addition to existing commitments Australia has already sought through the National Hydrogen Strategy with other like-minded economies including Japan, South Korea and Singapore.

Information about the study and Australia’s hydrogen strategy is available on the Hydrogen Strategy website.

Are we expecting to build more liquefied hydrogen cargo ships in the near future?

Yes, we expect the development of additional liquefied hydrogen carriers in the future.

Why is the ship limited to so few trips?

The purpose of the pilot is to demonstrate integrated supply chain elements, not produce mass quantities of hydrogen. The main purpose of ship transportation is to validate safe liquid hydrogen transportation and collect and analyse data to apply to future commercial-scale development of equipment/facilities. We are providing a sufficient period of time needed for such analysis, a well as marine navigation training, hydrogen loading and cargo supply. 

What’s the investment cost for a liquid hydrogen ship?

The HESC Pilot will see close to half a billion Australian dollars invested by the Japanese and Australian industry partners, and the Victorian, Australian and Japanese Governments.

Where can we find out more information on the Hydrogen certification scheme?

https://consult.industry.gov.au/national-hydrogen-strategy-taskforce/hydrogen-certification-survey/

How far advanced is hydrogen as a potential energy source for consumers in Australia? For example, could it be used as an energy source in rural locations?

Australia’s National Hydrogen Strategy sets a vision for a clean, innovative, safe and competitive hydrogen industry that benefits all Australians.

What sort of project scoping order of magnitude usage of H2 in maintaining -253 degrees and propelling a commercial size vessel and load would be acceptable to make the project worthwhile in the case being considered – e.g., Australia to Japan?

The marine carrier will use cryogenic storage tanks and vacuum insulation to contain the liquefied hydrogen and keep it at a very low temperature.

One of the key elements of transporting liquefied hydrogen is preventing heat from turning the liquid hydrogen back into a gas.

This is known as ‘boil off’. KHI has developed specialised insulation technology to respond to this challenge and will be testing its effectiveness during the pilot.

Once the pilot is complete and all data analysed, we will have a greater understanding of the project’s commercial viability.

Do you see the learnings from this project as transferrable knowledge to renewable hydrogen projects?

The infrastructure created by the HESC Project to transport, liquify, store and ship hydrogen is the same infrastructure renewable hydrogen projects will need. The highly skilled workers it will create shall be job-ready for the future energy sector.

This project could contribute to decarbonisation of the local gas networks or create markets for hydrogen used in fuel cell vehicles and power generation in Japan, and Australia. These are the same markets renewable hydrogen needs to see developed to become viable.

is it true that CCS carbon can later be re-extracted and used as fuel?

Captured carbon dioxide can be reused or recycled in several commercial applications. Carbon dioxide can also be used as a feedstock for new products.

What is the target cost of CCS from CarbonNet?

According to CarbonNet (see here), the relative costs of CO2 capture, transport and storage will depend on the location and industry.

  • Storage costs are related to the geological characteristics of sites
  • Transport costs are related to distance and pipeline capacity
  • Capture cost can vary significantly between industries, as some industrial processes separate the CO2 as part of their normal operations

The most cost-effective opportunities for CCS today are in the natural gas processing, fertiliser manufacturing, hydrogen production and biofuel sectors. The Australian Government’s latest Technology Investment Roadmap is targeting a stretch goal of CO₂ compression, hub transport, and storage under $20 per tonne of CO₂

Acknowledging that H2 is combustible and potentially explosively so, why don’t you use the CCS reservoirs that are capable of perfect and indefinite CO2 as large-scale temporary storage for renewable hydrogen?

Pure hydrogen gas is not toxic and cannot ignite or explode spontaneously. An ignition source and oxidizer (like oxygen) must be present. When handled responsibly and safely, hydrogen is no more or less dangerous than other flammable fuels like natural gas and gasoline.

While hydrogen is abundant in the universe, it is not freely available as a gas on Earth and must be extracted from water, fossil fuels, or biomass.

Once the hydrogen has been extracted from either water, fossil fuels, or biomass, it must be stored and handled in the same way. Locally, hydrogen gas is stored and transported in a high-pressure tube trailer from commercial operators who comply with Australian safety standards and are already storing and transporting hydrogen gas in Australia. For many reasons including this one, it is not possible to use CCS reservoirs to store hydrogen gas or liquid hydrogen – no matter the source.

Looking long term, do you expect that rehabilitation plans for Loy Yang will be delayed?

AGL Loy Yang rehabilitation plans will not be impacted by the HESC project in the short term and will continue to be developed in consultation with DEDJTR, EPA, the Rehabilitation Authority, community and other stakeholders. As we are in the early stages of the project it is difficult to say what impact a commercial HESC project would have.  Any changes to the plan would be in consultation with relevant stakeholders and regulators.  In the interim AGL continues to maintain a focus and active work on progressive rehabilitation in accordance with current and approved plans.


[1] https://www.globalccsinstitute.com/resources/publications-reports-research/net-zero-and-geospheric-return-actions-today-for-2030-and-beyond

[2] https://hydrogencouncil.com/wp-content/uploads/2017/11/Hydrogen-Scaling-up_Hydrogen-Council_2017.compressed.pdf

[3] Internal CSIRO calculation on lifecycle emissions for coal gasification with CCS: Bruce, S, Temminghoff, M, Hayward, J, Schmidt, E, Munnings, C, Palfreyman, D & Hartley, P 2018, National hydrogen roadmap, CSIRO, p67

[4] Office of Air and Radiation, 2008, Technical support document for hydrogen production: proposed rule for mandatory reporting of greenhouse gases, US Environmental Protection Authority, accessed 9 December 2020 via https://www.industry.gov.au/sites/default/files/2019-11/australias-national-hydrogen-strategy.pdf

[5] Internal CSIRO calculation on lifecycle emissions for coal gasification with CCS: Bruce, S, Temminghoff, M, Hayward, J, Schmidt, E, Munnings, C, Palfreyman, D & Hartley, P 2018, National hydrogen roadmap, CSIRO, p67

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