$250,000 hydrogen study in Tasmania

March 27, 2019





CARLTON: Today in our part of the state there has been an announcement by the Federal Labor Party under the auspices of Mark Butler, who is the Shadow Minister for Climate Change and Energy.  Also his Assistant Minister Pat Conroy MP with whom I will speak in a minute and the local Member for Bass Ross Hart.  Why are we chatting?  Well $250,000 has been put up as part of a billion-dollar funding program announced by Labor into the development of a hydrogen industry here in Australia. The extent to which Tassie can play a pretty significant role in what’s predicted to be a, I hope you are sitting down, $215 billion global industry by 2022.  How do we play it? Pat Conroy is on the line from Launceston. Good morning Minister, how are you going?

PAT CONROY: Good, and you?

CARLTON: Not too bad at all thank you.  Would the $250,000 for a scoping study, what are you attempting to scope, for curiosity?

CONROY: Well we are intending on identifying the best opportunities for Tasmania, particularly northern Tasmania to be part of the hydrogen supply chain.  As you said this is a globally massive industry, an industry where if we do things right could employ 16,000 Australians and Tasmania is in a great location to take advantage of that.  So the study is to identify which parts of the supply chain make the most sense for northern Tasmania to compete in and then that will then lead on to us trying to steer some of that $1.1 billion out of our hydrogen plan to northern Tasmania to develop the industry.

CARLTON: The difficulty with hydrogen as I indicated in the intro is actually splitting it off from whatever it’s attached to in order to effectively use it.  What would the source for hydrogen be, I guess water wouldn’t it, and you would use, what Tassie’s green electricity to do the cracking so to speak.  Is that part of, would that be part of the plan?

CONROY: Yeah, absolutely. As northern Tasmania has got three great advantages.  You’ve got boundless renewable energy.  You’ve got some of the best wind resources in the world.  Secondly you’ve got access to lots of water and power through your hydro system and you’ve got a good deep water port to transport it to Japan and South Korea. Northern Tasmania is I think in one of the top three locations in Australia to be the heart of the hydrogen industry.

CARLTON: So you would see a worm to turn, if I can use that expression, Pat. A process whereby we would be using the raw material which presumably would be water to crack hydrogen off, to process it, cool it and compress it obviously.  Get it into big tanks and then export it overseas.  That whole process you would envisage happening out of Bell Bay here in Tassie basically?

CONROY: Absolutely that’s what the scoping study is designed to make sure that makes sense but the initial conversations I have had is that it’s very competitive.  There are two options, you can either liquify the hydrogen by cooling it, akin to what you do with liquified natural gas, or you can actually suck nitrogen out of the air, combine the nitrogen with the hydrogen and you can transport it as ammonia.  And there’s an argument particularly from CSIRO that that would be a better process because we’ve already got an ammonia industry in this country.  You can then use the ammonia for fertiliser or when it gets to Japan or South Korea you can crack the ammonia back out and use the hydrogen for electricity generation for transport, industrial processes.  So either way I think both are huge opportunities for northern Tasmania if we make sure as a government we back industry on this.

CARLTON:  And that’s the key thing isn’t it?  I notice you’ve got the support of local government, the Northern Tasmania Development Corporation – big tick, Tasmanian Minerals and Energy Council – no brainer, Launceston Chamber of Commerce and Business Sustainability Roundtable – check, check.  So they’re on board.  The corporate world and particularly some of the larger manufacturers, vehicle manufacturers, Toyota again as I indicated are doing a fair bit of work here.  Are you intending on developing partnerships with industry to progress this because obviously their expertise and capital would be hugely useful?

CONROY: Oh, absolutely.  I was meeting with a consortium yesterday on that very issue.  Talking to the manufacturers such as Toyota and Hyundai, pumping lots of money into it.  Woodside is very interested in it.  A lot of the natural resource companies, Engie for example a French energy company are funding projects in Australia right now.  Where ever I go, whenever I meet with industry people are very positive about hydrogen.  The buzz is huge.  We’ve got such a diversity whether it's transport, electricity generation, replacing coking coal in steel making, replacing natural gas for heating and cooking.  It is such a diverse source that we are in a global race against Qatar and Norway and we have just got to make sure that we support industries to make sure Australia gets it fair share of the pie and northern Tasmania in particular.

CARLTON:  So are you suggesting there could be 16,000 jobs in this industry.  Is that over what the next three-year period or what?

CONROY: No, no that’s when industry is fully mature.  That’s why we want this study, to invest in it if we plan it we can compete against the rest of the world, when this industry is mature we will have 16,000 in the export industry alone, exports worth $10 billion a year and that’s not to mention the domestic industry as well.  So there are huge opportunities.  We are in early phase.  The industry is already half the size of the LNG industry.  So it’s not a tiny industry, it’s just going to grow very massively.

CARLTON: One of the criticisms of hydrogen is less about the technology and more about the business structure.  The argument goes that if everybody had plug-in power then obviously the energy companies, the electricity companies do a hell of a lot better out of that than the oil industry has and when you transition that over a period of time you see the whole supply chain in the oil industry under some threat.  There is a suggestion that are using hydrogen in this way simply entrenches the oil companies will have the capital to do these sort of things, it uses their existing service station network and essentially sort of gives them something to trade.  Is that a factor in this for you at all or are sort of agnostic about that end of things?

CONROY: Oh we are agnostic about that and to be honest it will be a combination of technology.  So for small cars in big cities, battery electric vehicles make total sense, but for people who need to drive longer ranges or there’s a fair distance between service stations such as in Tasmania and my home area in the Hunter in NSW, hydrogen vehicles make sense.  Hydrogen vehicles for trucks and trains for example, we know that 10% of Australia’s rail network is electrified.  It’s a lot cheaper to convert to hydrogen fuelled trains than to electrify the network and similarly the gas network, it will be cheaper, 40% cheaper to convert that network to pump hydrogen gas instead of natural gas than electrifying, and investing in transmission in the southern states.  So it’s really horses for courses and we think both hydrogen and electrification have a big role in decarbonising in the economy.

CARLTON: It’s a very interesting technology as again I mentioned in the intro Honda produced a fully functioning hydrogen vehicle many years ago but the price tag was prohibitive.  Obviously, bringing industry, particularly manufacturers in at an early stage of the process with potential to remove some of that cost for transitioning, particularly as I say business and transport into the hydrogen fuel sector.  It’s a really interesting idea and I would be interested to have a chat once you’ve received the scoping study and we see where we go from there.  Obviously an election in the meantime. 

CONROY: Yeah absolutely, but the scoping study is aimed to be finished by the end of this year if we are elected, then we are going to get on with building the industry.  So I would love to come back and have a chat about the next stage of that.

CARLTON: If you get up, happy to do that. Appreciate it Pat, thanks for your time.  Pat Conroy who is the Shadow Assistant Minister to the Minister for Climate Change and Energy and the Member for Shortland as we heard there in the Hunter Valley in NSW which is coal centre for the nation.  He would know a little bit more about this sort of stuff than most people.   He’s also an economist.  That’s a really interesting development.  That all happened literally an hour ago, the big reveal, but what it would do if it was to pan out the way the Assistant Minister, sorry the Shadow Assistant Minister and I were just speaking about, there is potential for vast amounts of jobs.  1.  New business starting up in and around Bell Bay, all the infrastructure is there.  You’ve got all the power infrastructure obviously.  Water supply is there.  Perfect location for it.  Ok, as I say backed by and its worth noting who these individual, who these groups are because they don’t always agree on stuff – local government, Northern Tasmania Development Corporation – again no brainer, but the Tasmanian Minerals and Energy Council – think about that for a second – backing a Labor plan, yeah ok – you see why I talk about these kind of things.  This is a good idea, its worth having a look, absolutely worth having a look at.  Launceston Chamber of Commerce are in it too and the Business Sustainability Roundtable.  So you’ve got the Minerals and Energy Council which are about, sort of you know if you want a create a political spectrum you’ve got them over on the right and then you’ve got the Business Sustainability Roundtable which is sort of centrist but slightly, it’s the left end of business can I put it that way.  Alright we’ll watch that play out with some interest but you’re going to hear a lot more about hydrogen in the near future don’t worry.