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Australia: Major Energy Group Banks on Hydrogen to Power the Future

By September 21, 2020 5   min read  (1009 words)

September 21, 2020 |

Canadian utilities giant ATCO was struck by Australia’s unique ability to make green hydrogen by harnessing its abundant sunshine. This capacity, combined with the country’s can-do attitude and commitment to the development of renewable energies, compelled the company to invest in Australia’s first Clean Energy Innovation Hub to fast-track sustainable solutions for future energy needs.

Alberta-based conglomerate ATCO Ltd. has a long history with Australia. Sixty years ago, its founder S.D. Southern and his son R.D. Southern sat on the Sydney docks assembling workers’ huts for a new oil and gas project in South Australia’s Cooper Basin. Fast forward to 2020…ATCO’s relocatable housing is omnipresent on mining and energy sites across the country, and the company has expanded to own and operate independent power projects globally.

In 2011, ATCO made one of the largest acquisitions in its history, spending A$1.1 billion buying WA Gas Networks, Western Australia’s chief gas distribution utility, which supplies over 650,000 customers through more than 14,000 kilometres of pipeline. That same year, perceiving other long-term opportunities in the market, it set up ATCO Australia in Perth.

‘Australia is very similar to Canada,’ says Nancy Southern, ATCO’s Chair and CEO. ‘There’s a very similar business outlook, which is entrepreneurial and pioneering – a can-do attitude. We have Commonwealth laws. We are resource-rich countries. We have sparse populations and huge tracts of remote areas. It’s such a close fit. We felt very comfortable in Australia.’

A clear commitment to hydrogen

ATCO’s keen interest in alternative energy technologies, including natural gas cogeneration and trigeneration, hydro, geothermal and solar energy, dovetails with Australia’s aspiration to grow its renewable energy capacity and transition to a modern, clean energy system.

‘In recent years, we’ve felt the Australian Government’s policies around a new hydrogen economy were right up our alley, so we started investing alongside the government with the Australian Renewable Energy Agency (ARENA) funding in hydrogen projects,’ says Southern.

ATCO Australia, with ARENA’s support, has invested A$3.3 million in the Clean Energy Innovation Hub, a leading research and development facility located in its Perth operations centre. The hub is a testing ground for hybrid energy solutions, integrating natural gas, solar PV, battery storage and hydrogen production.

The firm is also conducting a feasibility study with funding from the Western Australian Renewable Hydrogen Fund into the development of a commercial-scale hydrogen production plant – the Clean Energy Innovation Park (CEIP) – and is on the shortlist to build and operate the facility.

‘Where I think Australia has got it absolutely correct from a big picture perspective is the recognition that the country should continue to collect the economic rent of its resource-rich businesses (oil and gas and mining), while at the same time harnessing the tremendous resource of solar in developing clean fuels for the future,’ says Southern.

‘In Australia, policy and vision are intertwined,’ she adds. ‘The country continues to prosper without impeding the development of the resource industry. At the same time there is acceptance that the future lies with non-emitting fuels, and that represents another great export commodity for Australia.’

Australia’s shining advantage

Southern singles out Australia’s abundance of sunshine as a major competitive advantage.

‘Australia can make green hydrogen using solar energy whereas other nations do not have the same access to solar. They are going to have to move to blue or brown hydrogen, which is made using carbon-intensive methods such as gas or coal.’

The country’s proximity to Asia-Pacific nations is another plus when it comes to renewable fuels.

‘We are seeing impressive amounts of interest in obtaining large quantities of hydrogen for non-emitting fuel from South Korea and Japan, in particular, as they move to decarbonise their economies,’ Southern says.

‘Australia is perfectly positioned to provide products and services to the world. It is an extraordinary strategic nation, in terms of its ability for excellence. It has a plethora of natural resources, a great workforce, and very helpful government agencies to streamline permits, licences and access to customers.

‘Austrade has been an absolutely key player in our development in the region,’ adds Southern. ‘I know that we would have never been able to secure BP’s Tangguh liquefied natural gas (LNG) refinery workforce housing in Indonesia or mining and natural gas projects in Papua New Guinea and New Caledonia without Austrade’s assistance. Our company operates in many countries, but we have never experienced a more streamlined approach and value-creator than Austrade.’

The fuel of the future

As the world eyes a lower-carbon future, big mining and exploration and production (E&P) companies are carefully assessing hydrogen’s potential. Accordingly, ATCO Australia has partnered with Fortescue Metals Group, a global leader in the iron ore industry, to work on developing zero-emission hydrogen as a primary fuel source. The collaboration will see the construction of a hydrogen production and refuelling facility in Perth, which could ultimately be rolled out across the state.

‘Once it tests out and proves commercially viable, then it would be beneficial for the entire mining and LNG industry, in hauling new materials – and even people – to remote sites,’ says Southern.

‘It’s hard to imagine just how much impact the hydrogen economy could have on the future,’ she reflects. ‘The key in my mind is being able to mix hydrogen into the natural gas stream, so you can reduce emissions. That requires a significant investment in infrastructure, in special pipes, because the hydrogen atom is so small, it escapes from traditional pipes. You could then use those pipes to store the hydrogen. It is exponential in its ability to be stored and called on for electricity generation, electricity in homes, even heating.’

About Austrade

The Australian Trade and Investment Commission (Austrade) is the Australian Government’s international trade promotion and investment attraction agency.

We deliver quality trade and investment services to businesses to grow Australia’s prosperity. We do this by generating and providing market information and insights, promoting Australian capability, and facilitating connections through our extensive global network.

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