News that Queensland and New South Wales are pushing ahead with ambitious large-scale hydrogen projects was broadly welcomed by industry and green advocates alike this week.
However, the exultation also came with warnings from those genuinely in favour of net zero, and some telling words from the gas industry that should not go unnoticed.
Beyond Zero Emissions chief executive Heidi Lee, said that the work by organisations such as her own and other industry and not for profit groups had paved the way for the projects to come to fruition, and to have been so well-received.
But she said at the same time it was important to recognise the opportunity for exactly what it was, rather than what some proponents would like it to be.
“Some proponents are talking about pumping green hydrogen into the gas network to feed domestic and industrial processes that don’t need hydrogen — where it’s actually more energy and cost efficient to just repower or redesign [them] to be powered with electricity,” she said.
Sliding almost unnoticed into the mainstream press, gas giant Jemena took a very different approach, saying green hydrogen had “a central role to play in the decarbonisation of the New South Wales gas distribution network”.
The company, which is majority owned by the State Grid Corporation of China and operates Australia’s largest gas distribution network within NSW, currently supports a renewable gas target of 10 per cent for Australia.
“…if Australia repurposes its existing gas infrastructure to decarbonise the economy, it will be about half the cost of building and maintaining huge amounts of additional electricity infrastructure,” Jemena’s executive general manager of networks Shaun Reardon said.
A spokesperson for Jemena told The Fifth Estate this was based on a cost/benefit analysis conducted by the company that showed “decarbonising” the gas network to be the cheapest and most efficient pathway to net zero.
Ms Lee does not agree. “This approach of producing hydrogen and plugging it into the gas network, that’s a diversion that is slowing down the transition because we should be focused on electrifying our homes and factories first,” she said.
“That is the quickest way, because that’s not just a 10 per cent reduction — if you actually just turn it off then you get a far bigger reduction, far quicker.”
Fossil fuel companies such as Jemena which provides gas to over 1.4 million customers in NSW, seem happy to take two steps forward and one step back if it means staying relevant.
The company, which last year made an after tax profit of over $220 million, has spent $15 million alongside ARENA to fund its own green hydrogen producing project, which later in the year will begin to blend just two per cent green hydrogen into the NSW gas network.
Jemena calls it the “first step” while in the meantime continuing to pump hundreds of millions of dollars into the maintenance and development of the existing gas network.
“What we’re concerned about is you could end up with arguments for subsidising continuing to keep the natural gas industry going, because the infrastructure for that industry is playing a role in reducing emissions,” Ms Lee said.
“But we know that you’re not going to get to zero emissions by just dialling down the very negative, polluting industries like natural gas. That’s not going to get us to zero emissions at the speed that we need to.”