Can Australian Green Hydrogen Replace Russian Gas?
By Paul Homewood
This is a story that has got our old friend, Ambrose Evans-Pritchard, excited lately:
https://www.ft.com/content/0d14e8e9-63a1-400b-81af-e705d6eaaba9
According to AEP:
“Look at the deal just reached between Andy Fortescue and EON to ship green hydrogen (as ammonia) from his 200 GW planned solar and wind zone in Australia to Germany. Simply amazing. This is where the world is going”
The first thing to point out is that there is no deal to ship anything. It is simply a commitment to a research and study partnership. In particular, there is no obligation at all for Fortescue to spend a penny beyond this research. [Fortescue Future Industries, FFI, is, by the way the company. Andy Forrest is its Chairman – “Andy Fortescue” does not exist!]
But is green hydrogen really the breakthrough AEP thinks?
The first thing to note is that hydrogen does not grow on trees! FFI plan to use wind and solar power in Australia to produce hydrogen via electrolysis, an expensive process which also wastes some of the energy input.
The hydrogen is then combined with nitrogen in another expensive process to produce ammonia, which is more energy dense, and thus cheaper to ship. The ammonia then has to be cracked in another expensive process to split the hydrogen out again.
It therefore goes without saying that in energy terms hydrogen is much more expensive than the electricity used in the first place.
Solar power, of course, will be relatively cheap in the deserts of Australia. The IEA carried out a detailed study on hydrogen a couple of years ago, and reckoned that green hydrogen there would cost around $2.20 per kg:
https://www.iea.org/reports/the-future-of-hydrogen
That translates to $72.60/MWh, say £55/MWh. But on top of that we need to add all of the other costs.
The current, extremely high wholesale price of gas is about 270p/therm, or £92/MWh. Even now, green hydrogen is unlikely to offer any significant savings, once all of the other costs are added in.
But there is no reason why natural gas costs should stay as high as they are now. Historically, market prices, which have reflected the “real” costs of extraction, have been around £14/MWh.
Allowed to function freely, markets will quickly correct the current imbalance of supply and demand, and prices will fall accordingly. It clearly makes no sense at all to spend literally hundreds of millions developing a green hydrogen alternative.
Indeed if we go down this route, we are locking in the current unaffordably high prices of gas for the long term.
So why are FFI and E.ON getting into bed on this one? The answer is simple – subsidy hunting.
There is no question from a technical point of view that green hydrogen can be produced and shipped in bulk in this way. But neither FFI or E.ON, nor for that matter their bankers, are going to invest big money just in the hope that the Ukraine crisis goes on forever.
There is only one way this project will get off the ground. They will be wholly dependent on subsidies from the EU or German government. This is most likely to be in the form of Contracts for Difference, already being mooted for hydrogen production in the UK.
Such a scheme would offer a guaranteed price to FFI and E.ON, with the cost passed on to consumers.
Finally, let’s put the production numbers into perspective.
The deal talks about 5 million tonnes of hydrogen a year. That equates to 165 TWh. In comparison, the UK consumes 855 TWh a year. Europe as a whole uses close to 6000 TWh annually.
Clearly this FFI project will make no more than a dent in the overall gas market.
Finally, one last number. The FT talk of a 200 GW wind and solar zone in Australia to make this happen.
Currently the global capacity of solar power is only 707 GW, and in Australia it is a tiny 17 GW.
It seems like we will need an awful lot of solar panels, simply to replace a tiny amount of gas!
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NOT A LOT OF PEOPLE KNOW THAT 
No.
Is this not just the Haber process for making Ammonia/Fertiliser, substituting the front end hydrogen from methane with electrolysis? AEP is easily deceived.
That’s right. Nothing new or magical
This begs the question of how many wind turbines and EV panels will the UK need to replace gas? Any ideas?
Think of a number, treble it, times it by a few million acres and you’ll be getting warm. Oh, and you’ll have to find an alternative source of back up energy for when it’s cloudy, dark or not very breezy. Makes perfect economic and environmental sense
If the alternative source is nuclear, by the time it’s up and running the turbines will be worn out. As you say, perfect sense.
I’ll try a very rough (non expert) calculation – for the sake of simplicity looking only at wind turbines. Over the past year, wind contributed 20% to our electricity generation and gas/coal 40%: https://grid.iamkate.com. We currently have over 11,000 installed turbines. Therefore, if wind was to generate all our electricity (assuming no change in demand) we’d need about 30,000 turbines. But of course it’s not as simple as that – to produce sufficient power for a battery storage or a hydrogen solution to intermittency, that might have to be at least 40,000.
But of course it’s not as simple as that either. We’re told transportation and gas heating are to be electrified. If feasible (unlikely) I believe that would increase electricity demand by at least three – i.e. we’d need over 120,000 turbines. Here’s just one of many relevant statistics: each turbine requires about 1,300 tons of reinforced concrete – therefore, 120,000 would require about 160 million tons (and about 36 million tons of steel). Does that seem possible? And how would it be manufactured?
And perhaps someone could tell us how much real estate would be needed to accommodate 120,000 wind turbines?
I’m much obliged Robin. Whoever owns the real estate required is bound to enjoy a nice little earner. Add it to the invoice aka domestic and industry energy bills.
“And perhaps someone could tell us how much real estate would be needed to accommodate 120,000 wind turbines?”
That’s the easy part, Robin:
We know wind needs 250,000 acres / 101,000 hectares / 390 miles^2 to generate 26TWh pa. 😉
Thanks Joe. This excellent presentation by Jan Smelik has another way of looking at it: https://www.youtube.com/watch?v=m7PHUMd7PYA&t=7s. Go to 2.4 minutes in and you’ll see it’s claimed that 10,000 turbines require an area of 100 sq km. Therefore 120,000 would require 1200 sq km – or about 300,000 acres. I suggest it’s unlikely that so much acreage would be easily (if at all) available on land and/or sea. If so, for this reason alone (there are many other reasons – such as the amount of concrete and steel required (see above)) the government’s plans are unachievable.
I should add that Smelik goes on to argue that in practice a far greater area would be required for The Netherlands. If he’s right, it would mean that the UK would require massively more than 300,000 acres.
And still comes back to the same question: what do you do when the wind isn’t blowing? And how do you guarantee grid stability when the supply of your raw feedstuff can vary from 100% of requirement to 0% and any figure in between by the hour and you have no way of storing it.
Unless you are going to live permanently with a totally unpredictable fuel and its consequences you need reliable instantly available back-up and if you have that why are you not using that as your main source in the first place?
Answers on a postcard …
I’m surprised no one noticed the serious error in my simple calculation above. If, as Jan Smelik says, 10,000 wind turbines require an area of 10 x 10 km (6.2 x 6.2 miles), 120,000 require an area of 75 x 75 miles – i.e. 5,625 sq miles or 3,600,000 acres. And that’s before any account is taken of the additional area required for the solution to the intermittency problem – assuming there is a solution. Smelik rejects batteries and notes that, if hydrogen is seen as the solution, the number of wind turbines required must be vastly increased to cope with the resultant energy loss. Overall, if I’d followed Smelik’s logic, the UK would require 640,000 turbines (covering 19 million acres) – utterly impossible. But I fear he may well be right.
I think that a factor of three is on the low side, four or even five would be nearer the mark
Well Ben – I did suggest that a wind-dependent UK might need 640,000 turbines. Not enough for you?
I gave a talk to the Institution of Power Engineers in November last year covering this. You would need something like 385 GW of offshore wind to replace all of the natural gas used in the UK in 2019-20 for purposes other than power generation and energy conversion with hydrogen. Capital cost about £1.3 trillion including electrolysers & storage.
This is far from a simple calculation because you have to optimise turbine, electrolyser and storage capacity to deal with (a) seasonal peaks in gas demand, and (b) the intermittency of wind generation even in winter. Natural gas is (relatively) easy and cheap to store. Hydrogen is difficult and very expensive to store. Thus you have to have a lot of excess generator and electrolysis capacity to achieve the levels of reliability provided by natural gas. Most of the articles and academic work about H2 simply focuses on aggregate replacement of H2 for CH4 without thinking about the system aspects in a world where demand for heat, etc is highly seasonal.
The real flaw in the hydrogen story is the problem of large scale storage. Who will volunteer to live on top of salt caverns containing high pressure H2? In a sense this piece is about an attempt to find a way around the storage problem – using ammonia rather than compressed H2 – but the costs involved show just how serious the storage issue is.
Hi Gordon
“Most of the articles and academic work about H2 simply focuses on aggregate replacement of H2 for CH4 without thinking about the system aspects in a world where demand for heat, etc is highly seasonal.”
Not only is demand for heat highly seasonal, its daily & 1-hr peaks, and, its 1-hour & 3-hour ramp rates are significantly greater than existing electricity demands:
If we adopted the Ireland Alternative Fuel Obligation and used liqiuid fuels (esp kerosene) in out CCGT generators the “storage” of electricity goes away.
“Can Australian Green Hydrogen Replace Russian Gas?”
Producing H2 is one thing; realising that the volumetric calorific value of H2 is just 30% that of natural gas at a stroke triples transportation costs. From 1/2-way around the world.
Australia has more than enough gas, but not enough nearby market. With those prices the Aussies would be able to simply ship LNG direct to Germany and undercut this bizarre scheme by miles.
FFI?
More like FFS.
So Ambrose Evans-Pritchard is a weapons grade nitwit.
Who knew?
Anybody who reads the Telegraph, I would venture. 😁
But he’s good value!
I loved the comment in a DT article today about gas/CC where a commenter said we should use gas to create H2 – which would be far less warming. DOH!
Now that is funny 🤣🤣🤣🤣🤣🤣🤣
With one swift swoop** that commentator indicated the mental level of so many Greenies.
** I am not sure what is the correct description of the flying antics of the minor green tit.
Yes, of course, but that is exactly what goveernment is clinging to – “blue” hydrogen.
Hydrogen is as stoopid as stoopid can get!
It is *NOT* a fuel, but merely an energy transport & storage mechanism, BUT…
The end-to-end energy RoI is ~30%! Yes, ~70% of the input energy is wasted/lost!
Stoopid is thinking this is a good idea.
+1
Invest the money in developing gasification of coal underground in Europe
Germany replacing Russian gas with Australian hydrogen is just the latest in a long line of cloud cuckoo land schemes from climate obsessed dreamers. Good for a laugh but nothing else.
One day they might snap out of their fantasy worlds but we’re not holding our breath.
It will take a popular revolt, as brainless politicians will never change.
The politicians are not brainless. The problem is that they think that intelligence is a substitute for knowledge and experience in a relevant field of expertise.
Many have a 1st from Oxbridge, in History, Classics, or PPE: anything but a proper STEM subject, with industrial experience thrown in for good measure.
I call it arrogance.
James VI & I is a classic example of this. Well educated by George Buchanan* and Peter Young. By the age of eight he spoke fluent French and Latin. Also taught logic, mathematics, natural history and much else. But known as “the wisest fool in Christendom”
*Renown for being bad tempered at the end of his life.
“Twiggy” Forest, as he is known, made a fortune developing a lower grade of iron ore. Lately he has aimed at a different product. His projects include a hydrogen plant in Port Kembla in NSW where there is a steel plant (and a convenient supply of electricity from black coal) and this may be a starter as the NSW Deputy Premier is a renewables enthusiast. Originally there was talk of shipping it to Japan, but the government there has decided recently to emphasise energy security and concentrate on nuclear, coal and gas.
Then there was the project to dam part of the Congo River and generate electricity to produce hydrogen. Several consortia have walked away from even hydroelectricity in the Congo due to the risk.
Then there is the suggestion/thought bubble to build a giant solar farm in the outback to (in the first idea) transmit electricity 4,200 km. (2630 miles) to Singapore via HVDC cable (minimum loss in transit 21%) followed by a switch to piping hydrogen as gas there. Both schemes would rely on crossing an active tectonic fault line and deep water.
This scheme for ammonia to Germany at least gets around the “difficulty” of transporting liquid hydrogen (at minus 256℃) through the tropics.
The question I ask is what will they do with the hydrogen? It cannot be used to replace natural gas entirely in CCGT because the higher burnng temperature destroys the turbine blades (and the byproduct is nitric oxides and we know how keen the Germans are on those). The practical limit has been reported at 5%.
It could, I suppose, be used for household heating purposes and any residual ammonia might warn of leaks.
Remember also that Twiggy presided over the nickel disasters before that. Anaconda Nickel investors lost their shirts, then the next lot of investors also lost their shirts. Finally the Murrin nickel plant was made to work, but never more than 80% capacity. It was like the castle in the swamp.
Green hydrogen is totally stupid. One simple bit of arithmetic can tell you. It takes 50 kWh of electricity per kg of H2, which at say 30c/kWh gives AU$15/kg.
One kg of gas at the current AEMO market price of $15/GJ = 15 x 53.6 MJ/kg /1000 = 80c/kg
So green hydrogen just on the electricity required costs over 18 times more than natural gas. Ok natural gas has only about 30% of the energy of hydrogen by weight, but that still only brings it down to about 6 times more expensive. And when you add in the capital cost (enormous), interest rate on debt, labour, consumables and taxes the multiple will be much higher than 6.
Hydrogen is the Basil Brush of fuels. It goes Boom Boom.
JF
“in the hope that the Ukraine crisis goes on forever”
It doesn’t have to go on forever. The war will eventually end, of course, probably as some kind of forever frozen conflict with an occasional shooting once in a while, with Russia occupying the East and South of Ukraine.
But Europe won’t be too keen on pursuing new contracts with Russia, once the existing ones expire. Things going back to how they were pre-war are about as likely as this green hydrogen fantasy scheme actually followed through and completed.
Most of the gas imports will be replaced by LNG (as new terminals are built), fracking (as UK and other countries shift their policies), alternative pipeline supplies (Turkey, Azerbaijan, MENA), reversing nuclear phase-outs (many countries already expressed this idea, except for Germany of course), and reversing policy on coal (already Russian coal imports are banned, signalling a return to mining in Europe perhaps). And gas use will be reduced by rationing (as proposed by IEA), accelerated electrification (heat-pumps aren’t that expensive relative to boilers when gas prices are this high), and efficiency improvements (which were being implemented anyway).
Europe’s economy is clearly functioning just fine at prices of £92/MWh, and could take even higher prices, while Russian economy is already fatally broken, and will collapse entirely as gas flows are reduced. But Russia itself might not collapse even under a full EU embargo, which is only possible after 2025-27, but is likely inevitable. It will simply turn into a nuclear-armed failed state akin to North Korea and Iran.
Expensive as it might be, it is a price you will have to pay for European security.
This idea has been already researched. H2 is an energy sinkhole. It takes 1.65 to 2.12 times the energy contained in the H2 to create, compress, deliver, and use H2.
See Pg 27 at https://afdc.energy.gov/files/pdfs/hyd_economy_bossel_eliasson.pdf
In essence, the only practical use of H2 is to make Ammonia or synfuels. Everything else is impractical.
Seems hydrogen occurs naturally and the whole state of South Australia is now permitting exploration for it. Also found in Brazil. https://2021.goldschmidt.info/goldschmidt/2021/meetingapp.cgi/Paper/6052
Whitehall doesn’t appear to have got Paul’s memo:
https://www.telegraph.co.uk/business/2022/04/06/taxpayer-pumps-400m-hydrogen-ministers-strive-hit-net-zero-targets/
Maybe they should just drill for Hydrogen instead?
Natural hydrogen exploration ‘boom’ snaps up one third of South Australia
Let’s hope that the hydrogen reservoirs don’t need fracking.
They’ll have to be careful when burning it. One doesn’t want that dangerous dihydrogen monoxide being created.
“Disappears up its own ….”
That comment was aimed at Graeme No 3 from last night! Sorry if I caused anyone’s brain to explode!
What is it about the name “Ambrose” – this guy is as daft as silly Jilly Ambrose. Is being as thick as mince an entry qualification for journalists in energy sections?
Off topic Ray but our lovely Rosie, my MP, replied to my email to her concerning a windfall tax for renewables. I gave her a link to Paul’s recent article on the subject.
She actually replied but made no mention of the main point which was windfall tax on renewables but did make a big point about a windfall tax on oil and gas companies. She filled her reply with the usual standard garbage about how the Government is failing the nation by not subsidising alterations to our houses and lives generally.
I’ve replied to her again asking here to her address the original point about windfall tax on renewables.
Hi Mike, at least you got a reply! When I contacted her three times last year (by three different means) she failed to reply to me at all. My contact with her was for assistance in a specific local issue of a non political nature so no idea why she was so unwilling to assist. I was successful enough at ultimately resolving the problem (in Harbledown) to get a mention in the local newspaper so there would/could have been favourable press for her. in the issue.
(p.s. I live with a view over the Simpson’s Wine Estate.)
Don’t know that estate although I know Harbledown. I don’t expect her to reply as I started my reply to her by saying I didn’t agree with most of what she said.
Cirrusly, hydrogen can’t replace natural gas. You can’t just pump hydrogen into your natural gas lines and be done with it. EVERYTHING must change.
The machinations required to create the gas and get it to England without explanation of how it could be used are outlandish. This story isn’t really about gas, it’s propaganda to get people to believe that Net Zero is doable.
‘replace Russian gas’ is a non sequitur, giving the agitprop a warm, fuzzy feeling.
Outback Australia may have lots of space, and lots of sun, but it also has lots of dust and no water.
How will the solar panels be washed clean after the first dust storm?
Oh. They haven’t thought of that.
Put them face down of course, to stop the dust settling. Simple 🙂
Then you could use ground mounted mirrors to reflect sunlight onto the face down panels!
Dust on the mirrors?! I know, we’ll change the laws of physics and bend light.