The first ever liquid hydrogen shipment promises a new era of fuel exports for a world that’s curbing emissions, though huge challenges remain to deliver a rival to established clean energy sources.
“The opportunity is enormous,” Angus Taylor, Australia’s energy minister, said Friday as workers prepared to load a vessel with gas chilled to -253 degrees Celsius on a jetty south of Melbourne. “This is no fantasy — there’s a ship here that will be leaving port and going to Japan to provide a product to customers.”
The A$500 million ($359 million) pilot project is producing hydrogen from coal and biomass in Australia, with a future plan to capture associated carbon dioxide and store the emissions in the Bass Strait, off the country’s southeast coast. It will be transported to Kobe in Japan on the Suiso Frontier, the first ship ever designed to ferry this type of fuel.
For countries like Japan with little space for wind and solar equipment, new options to import carbon-free power are vital to achieve climate targets. If liquid hydrogen — invented over a century ago, and until now mainly used by NASA as rocket fuel — is to become a key part of that strategy, developers will need to dramatically reduce costs.
Liquefying hydrogen is expensive, as it consumes more than 30% of the energy content of the fuel, according to the U.S. Department of Energy. Also, it takes two-and-a-half ships carrying liquefied hydrogen to move the same amount of energy as one vessel of the same volume carrying liquefied natural gas, according to BloombergNEF.
“There are so many cheaper ways to reduce emissions than liquefied hydrogen brought on a ship,” said Martin Tengler, a BNEF analyst.
Delivering the cleanest form of the fuel — produced using water and electricity from renewable sources — remains costly too. Liquefying and transporting so-called green hydrogen from Australia to Japan by the end of the decade will cost around $30 per million British thermal units, according to BNEF. That’s roughly triple the price of a similar shipment of LNG under a long-term contract from an Australian export facility.
By 2050, liquid hydrogen will be as cost effective as LNG is now, according to Kawasaki Heavy Industries Ltd., which built the 116-meter long Suiso Frontier.
“Costs around production of green hydrogen produced from renewable energy continue to fall,” said James Bowen, a policy fellow at the Perth USAsia Centre, an Australia-based think tank.
Small Cargo
It’ll take about five days to load the Suiso Frontier, which can carry about 75 tons of the fuel, with its first cargo –- a fraction of the 72,000 tons typically carried by large liquefied natural gas vessels –- and then just over two weeks to get to Japan.
The aim is to demonstrate a project that could eventually export 225,000 tons a year of the fuel. Australia’s government forecasts total demand for hydrogen from the country could reach 3 million tons annually by 2040.
Talks with potential customers will begin following the pilot shipment, along with efforts across the supply chain to lower costs, Jeremy Stone, a director of J-Power Latrobe Valley, a unit of Japan-based Electric Power Development Co., said at the port. Other partners in the Hydrogen Energy Supply Chain project include Iwatani Corp., Royal Dutch Shell Plc, Sumitomo Corp. and Australia’s AGL Energy Ltd.
“We will scale up everything — scale up the ship, scale up gasification,” Stone said. “We’re confident in the commercialization, but it depends on someone wanting to buy the hydrogen.”
Over the longer term, Japan has flagged plans to use hydrogen in transportation, heating and as an energy source, and aims to raise imports to as much as 20 million tons a year by 2050. This target depends, at least in part, on the success of the Australian coal-to-hydrogen project, according to Ministry of Economy, Trade and Industry documents.
Japanese utilities also plan to reduce emissions from thermal power plants by mixing hydrogen with fossil fuels. Green groups argue this may actually prolong the use of coal and gas over the next few decades, delaying a switch to clean energy sources.
However, it’s not certain that demand growth will materialize, as hydrogen could fail to become a fuel of choice for transport and industry. Japan is pushing for hydrogen to be used in vehicles, boasting the most refueling stations in the world, but battery-powered cars and buses may remain cheaper, according to BNEF.
Companies across Asia’s biggest economies are undeterred by those challenges, and are rapidly adding joint ventures to explore the technology, including with many of world’s largest oil majors and utilities.
“There is appetite and there are customers that are keenly interested,” said Meg O’Neill, chief executive officer at oil and gas producer Woodside Petroleum Ltd., which is involved in several liquid hydrogen and ammonia projects, including in Australia and Oklahoma.
Source : bloombergquint
