Why the government should be working on a hydrogen strategy

Point  of  Order    a  week  ago  was  serving  up  some  commentary on   the  news   that  the  Tiwai Point  aluminium  smelter  will not  shut  down in  2024 — and  could  have  a  long-term   future.

The  question now is whether Meridian Energy, which supplies  the  bulk of Tiwai Point’s   electricity  from the  big  Manapouri   station,  will   be   willing  to  do  so  without  a    price  hike.  The  last  price  negotiation  was  difficult,  with Rio  Tinto  using  the  threat of  closure  to  screw  the  price  down.

When   Rio  Tinto  some  months  ago  was signalling  it  might  keep  the  smelter  open  beyond the  term of the  current contract,  there  was a  cool  response  from Meridian.

Chief executive Neal Barclay  has  been  quoted as  saying the company would no longer give the smelter rock-bottom prices, once the current contract expired, even if it wanted to stay open.

Fair  enough.

It’s  an  issue  which  should  be engaging  the  government,  because  not  only  does  the  government  own 51%  of  Meridian,  it  should  also be  developing   a  hydrogen  strategy.

Low-carbon hydrogen can be  made from water, using  an electrolyser powered  by  renewable energy.  Hydrogen can help decarbonise  activities  that  cannot  easily  be electrified. These  include  industrial processes  that  require high temperatures,  and  forms  of  transport, including shipping.

As The Economist  has  reported,  Britain has developed  a  hydrogen strategy which   initially called  for 5GW of hydrogen production, a  goal  since  doubled. To do  so, plenty  of  cash is  on offer  to help production projects  get off the ground. Then  a  “hydrogen business model”  will offer price  support to  low-carbon hydrogen producers.

Much  of  the  money  will go   to  two  clusters,  one  in  the  north-west of  England  and  the  other  on the  East  Coast.  The Economist points  out  these  regions  not  only have a  big  industrial  base  but  already  make  use of  lots  of  hydrogen:  it  is  a  component in chemical reactions for  refining and  the production of  fertiliser and  methanol.

Almost  all this  hydrogen, The  Economist says, is currently the  dirty “grey” sort, which is  made  from  natural  gas, but  does  nothing  about the  carbon  dioxide  thereby emitted.  Producers  of  cleaner  forms  of  hydrogen in these  areas  will be  close  to potential customers.

In  the  UK, there   is  talk of  encouraging  the use  of  hydrogen as  an energy-storage  medium  to help  overcome  the  peaks  and  troughs of  an all-renewables grid.  When  renewable  energy  is  plentiful, electrolysers  can be  turned on, producing  hydrogen, which is then  stored. When it is  scarce, that hydrogen  can be  burned  in a  power  station or  used  in  fuel cells  to generate  electricity.

Here  in  NZ   where   the  government  is  committed  to the  goal  of  100%  renewable  electricity,  it   has  not  specified   how the  country  may  reach  that  target.   Experts  suggest  that  by 2050 electricity  demand  will have doubled.

So  there  will be  pressure on the electricity  production  and  transmission  system  from different  directions;  and   there  have  been  some  signals  Meridian  is  monitoring  the  issue of  low-carbon hydrogen production.

Almost  certainly,  though,  the  government  needs  to  be  thinking – like  the  12  others  that have  already  done  so – of  formulating a  hydrogen  strategy   drawn  by  the  vision  of  a  thriving  hydrogen economy within  a  carbon-neutral  future.

2 thoughts on “Why the government should be working on a hydrogen strategy

  1. Closing Tiwai point to produce ‘green’ hydrogen will significantly increase global GHG emissions. At least 50% of the energy is lost in the hydrogen producing electrolyser whilst the aluminium will still be manufactured, just using a coal fired powerplant somewhere else in the world.

    Liked by 1 person

  2. The best technology electrolysers available take 50kWh to make 1kg of hydrogen. At perfect efficiency its 44kWh. then the laws of physics take over. To that energy needs to be added energy making the clean water and compressing the gas to say 300 bar so it can be used and transported. That takes consumption up to around 70 – 80kWh.
    Now grey hydrogen is sold for about $4 a kg. That will still be around because those that make it aren’t sucked in by climate change requirements. So the power would need to be sold to them for less than 6c/ unit ($60/MWh). That is about half the price of the NZ market. To get electricity, they would be subsidised.
    I haven’t added in the cost of building the plant or how you store it (hydrogen and steel are not a good combination). The plant is not viable. Only a foolish government with no understanding of economics or engineering would get involved – and that explains why Labour is promoting it.


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