Japan Suiso Energy to make major investment in Victoria’s Latrobe Valley; carbon capture and storage technology to be used extensively.
Here’s an article posted in The Guardian that talks about clean hydrogen revolution of Victoria with carbon capture technology.
According to the article,
- Japan is investing $2.35bn in a project to produce “clean hydrogen” from coal in Victoria’s Latrobe Valley.
- The initiative, called the Hydrogen Energy Supply Chain (HESC) project, aims to use carbon capture and storage technology to reduce CO2 emissions.
The cost of producing hydrogen from the HESC project in Australia’s Latrobe Valley is expected to be significantly higher than the rapidly decreasing costs of producing hydrogen from renewable energy sources:
Fossil Fuel-Based Hydrogen vs Renewable Hydrogen
- According to 2019 data from the International Energy Agency (IEA), hydrogen made from fossil fuels with carbon capture and storage (CCS) costs $1.20-$2.60 per kg.
- In contrast, hydrogen from renewable energy sources costs $3.20-$7.70 per kg.
- However, as renewable energy technologies continue to scale up, the costs of renewable hydrogen are expected to fall rapidly.
- BloombergNEF forecasts that green hydrogen made with renewable energy will be cheaper than coal-based hydrogen everywhere by 2030.
- The International Energy Agency has also projected that the cost of a large-scale brown coal to hydrogen project like HESC will be on par with renewable energy-based hydrogen by 2030.
- After that, the cost of renewable hydrogen will continue to fall, while coal mining costs could rise.
- Australia’s Clean Energy Finance Corporation agrees that green hydrogen will be cheaper than blue hydrogen (produced from fossil fuels with CCS) by 2030.
Challenges for the HESC Project
- The HESC project faces significant challenges in terms of the energy-intensive conversion and liquefaction process, as well as the high costs of shipping the hydrogen over 9,000km to Japan.
- These factors further undermine the long-term competitiveness of the HESC hydrogen compared to renewable sources.
In summary, while the HESC project may initially produce hydrogen at a lower cost than renewable sources, the rapidly falling costs of renewable hydrogen are expected to make the HESC project uncompetitive in the medium to long term, by the time it reaches full commercial scale in the 2030s. The project’s reliance on fossil fuels and CCS technology appears increasingly risky compared to the accelerating transition to cheaper renewable hydrogen.
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