Collocated offshore wind-hydrogen

Abstract

The hydrogen industry in Australia is in its infancy with most projects at this stage supported either by State Governments or through the funding arms of the Federal Government. The market is rapidly developing and interest in hydrogen has grown exponentially over the past few years. Governments in Australia and many countries around the world have set decarbonisation targets and it is expected that Hydrogen will play a major role in fulfilling these commitments. Largely driven by policy announcements and commitments, several hydrogen projects are currently in development in Australia and globally. Current forecast data indicates over 200 GW of electrolyser capacity are either planned for deployment or under construction. While industry moves forward with deployment-scale projects, incumbent fuels occupy a healthy competitive position. For example, in Western Australia natural gas prices are around $6/GJ and are set to remain stable into the foreseeable future, largely due to Western Australia’s domestic gas reservation policy. However, the impact of volatile oil prices on domestic natural gas remains to be seen. Although potential green hydrogen projects are mostly in early stages, increased opportunities for partnerships on the supply side or joint venture arrangements with energy producers and demand side off-takers, will accelerate these projects achieving feasibility. However, in achieving target hydrogen prices, the barriers remain significant. One such barrier, is the cost of renewable electricity and one such solution could be collocated offshore wind-hydrogen systems. By nature, offshore wind is an intermittent energy source. Hydrogen could be used as a means of storing renewable energy for electricity balancing, and as a dedicated source for large-scale hydrogen production. Hard-to-abate sectors remain a significant challenge as we transition to net-zero. Hydrogen may be used to de-carbonise hard-to-abate sectors as many stakeholders see offshore wind as the primary partner for hydrogen production. This paper discusses collocated wind-hydrogen systems as a potential pathway for offshore wind deployment and commercial hydrogen production.