Australia’s potential as a large-scale producer of green hydrogen and ammonia could position it as “a regional powerhouse of the energy transition”, according to BP, which is studying the feasibility of pilot and commercial facilities in the country.

BP is considering a pilot plant with the capacity to produce 4,000t/yr of hydrogen and up to 20,000t/yr of ammonia, and a commercial-scale plant that could produce 200,000t/yr of hydrogen and up to 1mn t/yr of ammonia. An initial feasibility study released this week focussed on potential sites at Geraldton in Western Australia (WA) using electricity from wind and solar with support from battery storage. The commercial-scale plant would need 1.5GW of power capacity.

“This looks ‎particularly promising in the mid-west of WA, which has existing infrastructure, access to land and ‎abundant renewable energy resources such as wind and solar” Baudry, BP

‎“This study confirms the potential for scaled-up green hydrogen in WA,” says Frederic Baudry, president, BP Australia, and SVP fuels & low-carbon solutions, Asia Pacific

“This looks ‎particularly promising in the mid-west of WA, which has existing infrastructure, access to land and ‎abundant renewable energy resources such as wind and solar. Importantly, our study also ‎confirmed strong demand from potential customers in the hard-to-abate sectors, and for both local ‎and export markets.”

Australia’s domestic demand for green hydrogen and ammonia could hit 17mn t/yr by 2050, with a potential export market of 45mn t focussed on Japan and South Korea, according to a market study commissioned by BP as part of the feasibility study.

Competing fuels

Unlocking that vast potential will depend on making green hydrogen and ammonia competitive on price against other low-carbon fuels. “Reaching the full potential hinges on competitive pricing against existing fuel sources. The price gap that currently exists needs to be closed to enable widespread clean hydrogen adoption,” the study says.

BP, which wants to capture 10pc of core hydrogen markets globally by 2030, cites analysis from global CEO-led initiative the Hydrogen Council that says a production cost of $2/kg makes green hydrogen competitive against other low-carbon fuels in about half of all potential applications in 2030. At $3/kg, green hydrogen competes in only 10pc of the market, the same analysis shows. At $1.50/kg, it becomes competitive in more than 80pc of the market.

The Australian government has set a goal of producing green hydrogen at or below A$2/kg ($1.47/kg)

“The magic figure is ‎producing hydrogen below A$2/kg, and the pathway to get there is becoming clearer. The study ‎has highlighted that through innovation, talent, commitment and collaboration, WA ‎can become one of the major exporters of hydrogen in the global market,” says Jason Fonti, origination and value chain leader at consultancy GHD Advisory, which worked on the feasibility study for BP.

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Author: Stuart Penson