Green Energy

Australia is well-positioned to be a global leader in green hydrogen production. Green hydrogen is produced using a renewable power source such as solar or wind. As a substitute for fossil fuels, it will help to meet growing renewable energy needs. However, high-quality water is needed to produce hydrogen. Supplies of high-quality water must also be secured into the future to support our agriculture, industries, cities, towns and communities. Climate change and population growth will increase pressure on these supplies. Community discussion is needed to identify where the water to produce hydrogen will come from. We need to ensure this developing industry does not disadvantage other water users, as we discuss in our new white paper. Green hydrogen industry looks set to boom Green hydrogen is likely to partially replace petrol and diesel for large vehicles such as trucks and heavy machinery as Australia moves to a carbon-neutral economy. It has the advantage of being a fuel suitable for sectors such as mining and transport that are struggling to reduce emissions. The green hydrogen market is expected to grow rapidly. Hydrogen energy outputs in Australia are estimated to exceed 100MW by 2025. More than 90 projects representing A$250 billion in investment are planned. Most demand for hydrogen this decade is likely to be domestic—for chemical production, industrial processes and other uses. In the longer term, major export demand is expected from the Asia-Pacific. By 2040, Australia’s green hydrogen production cost is predicted to be the equal-lowest in the world. Electrolysis, which splits water molecules into hydrogen and oxygen, will be the main method of producing this green hydrogen. How much water are we talking about? The amount of water needed to generate green hydrogen varies. The exact amount of water required depends on the technology used to produce hydrogen, the water quality and any need for cooling or water purification. On average, a liter of water can produce enough hydrogen to deliver about 10 megajoules of energy. That’s enough to push a 50-ton truck 15 meters. The previous Australian government predicted the hydrogen industry could be worth A$50 billion a year by 2050. At that scale, it would need about 225 billion liters (gigalitres) of water. While that’s roughly as much as residents of a city like Perth use in a year, it’s only about 3% of the water used for agriculture in Australia in 2020-21. There are many possible sources of water. Surface water, groundwater and recycled water are all available inland. Coastal areas have unlimited seawater, which can be desalinated for hydrogen production. But there are trade-offs whenever we allocate a water resource. In many areas, the available fresh water is fully allocated to towns, cities, agriculture, industry and the environment. The pressure on water supplies will increase as populations grow and much of Australia becomes hotter and drier under climate change. Further, most water would have to be treated to be suitable for hydrogen production. Treatment can be expensive and uses additional energy, as does desalination and pumping water long distances. Failure to plan for water use could be costly Current issues in the gas industry provide a cautionary tale. High gas prices in eastern Australia can be deemed the result of failure to consider impacts on domestic customers of developing a gas export industry. Western Australia, in contrast, reserved enough gas for domestic users. As a result, its prices are among the lowest in the OECD. A similar failure may arise if corporations buy high-quality water for hydrogen generation, diminishing supplies for agricultural, domestic or environmental use. North Africa exports substantial amounts of green hydrogen to Europe, but this is controversial because of regional water shortages. In Australia, competition for water will intensify due to climate change and ongoing demands from agriculture—72% of national water consumption in 2020-21—industry, mining, households and the environment. Using potable water to produce hydrogen may be at odds with community expectations. Care must be taken to ensure industry expansion does not adversely affect other users. This will be particularly difficult in Australia because rainfall is highly variable by world standards—not news to those who have lived through recent years of drought then flooding rains. So what are the likely solutions? The key challenge is to produce hydrogen in large quantities in a way that is cost-effective and sustainable. This can be achieved by planning effectively for industry growth. Our white paper identifies public policy and industry-related issues posed by this growth. We must identify regions likely to support hydrogen production and storage, find nearby sources of water and calculate volumes needed. Then, we must develop plans to support existing water users while providing a viable solution for the green hydrogen industry. Alternative sources such as recycled water or treated groundwater are likely part of that solution. Harvesting water from industrial and urban wastewater could be a game changer. It would require moderate treatment but have fewer effects on other water users. We will learn a lot from pilot programs such as the New Energies Service Station in Geelong, which will create hydrogen from 100% recycled water. In planning to overcome the challenges, we’ll need to develop relevant data, information and analysis to get the settings right. It is possible to create a vibrant, sustainable and profitable green hydrogen industry to support decarbonization of Australian and global economies, but it won’t happen by accident. Careful planning is essential, and communities must be involved in deciding where water will come from and how it can be accessed.

Almost one in three Australian households have solar panels on their roofs. Most are motivated by rising electricity prices and environmental concerns.

Households are paid a so-called feed-in tariff for surplus energy they export to the grid. While customers would love to get paid for every bit of energy they’re able to export to the wider grid, operators have imposed a fixed or “static” limit on how much energy each household can export. This helps keep network voltages—or electric pressure—within a safe range.

The limits are needed because of uncertainty about the impacts on the network of fluctuations in households’ energy use and exports.

The network is connected to households via “low voltage” transformers that reduce the voltage to a level customers can use. The uncertainty arises because operators can see what’s happening at each transformer, but not what’s happening in each household.

We are working on a data-monitoring project to enable network operators to see household voltage and current data in real time. The idea is to enable them to manage network voltage fluctuations more precisely.

This could allow households to safely export more solar, depending on local network conditions. People would arguably receive more money while speeding up the transition to zero-emissions electricity by providing more renewable energy to the network.

Managing a tricky transition

The electricity network was originally set up for “bulk” generation from centralized power stations. The flow was in one direction from coal, gas or hydroelectric stations to energy users, including households.

However, economic forces and aging systems mean many of these power stations are being rapidly retired. They’re being replaced, in part, by so-called “distributed energy resources.” These resources include rooftop solar, household or community batteries, and electric vehicles.

The household export limit to the network is usually around 5 kilowatts (kW), regardless of time of day or what households are generating or consuming. But, because of the falling cost of solar, 10kW residential systems (capable of producing twice the export limit) are increasingly common.

The Australian grid operator, AEMO, envisages distributed solar generation will make up 69GW of network capacity by 2050, compared to around 21GW now.

Integrating this energy generation is a big challenge for the energy market, transmission and distribution network operators.

The Australian Standard for household voltage has “allowable” and “preferred” operating zones around 230 volts. Keeping the voltage within these zones is better for energy efficiency and appliance life.

But when energy flow is “two-way” and unpredictable, both to and from houses, it becomes more challenging to keep the voltage within these zones. When lights flicker or appliances are damaged, that’s a sign the voltage is outside these safe limits.

How much household data do operators need?

If the operators could see household voltage and current data in real time, they might be able to set “dynamic” limits on households for the import and export of energy. That means limits are allowed to fluctuate depending on local network conditions, instead of being static. Households might then be able export more energy overall than they do now.

A long-term project of the Australian Renewable Energy Agency, Project SHIELD, aims to answer a key question here. That is, how much data do operators need to allow this flexibility, while still safely co-ordinating energy flows to and from the grid?

The project involves The University of Queensland, network operators and the private sector. A project partner, Luceo Energy (an offshoot of a company that formerly employed one of the authors), working with Energex, Ergon and Essential Energy, has rolled out 20,000 devices in households across Queensland that collect their energy data at one-minute intervals.

Smart meters installed in Victoria typically record energy data every 30 minutes. The new devices measure multiple electricity parameters, such as voltage and current, every minute.

This creates extraordinary amounts of data, which can be used in electricity studies and simulations. It also creates storage and analysis challenges.

The data collected are used to answer “what if?” questions. If an operator had perfect knowledge of conditions at every house attached to a transformer, they could create a safe dynamic limit. But would it still be safe if they could see the data for only 50%, or even 20%, of houses?

World-first simulation systems developed by Queensland company GridQube enable the operators to answer such questions. Data collected by the devices provide a key input.

Several representative locations and time periods have been chosen to see how network visibility can affect the envelope. The local network is simulated using a “power flow” with different network parameters, such as voltage. Then the key questions around safe limits can be answered.

Benefits for both consumers and operators

Of course, this is only one level of the electricity network. We still need to build considerable amounts of high-voltage transmission to integrate increasing distributed energy resources. This will help provide a reliable and secure power supply.

The data generated by Project SHIELD will inform electricity modelers and data scientists about what is happening at the household level (both electricity usage and solar generation). It can improve forecasting and modeling as data on this scale have not been previously available.

As the roll-out of devices and gathering of data continue at speed, operators can start to relax the limits on household solar energy exports. Greater visibility of local networks offers clear benefits for both consumers and operators.

Hydrogen has a part to play in the U.K.’s shift to a net-zero economy but its role will likely be restricted to certain sectors, according to a report from an influential committee of U.K. lawmakers.

The House of Commons Science and Technology Committee concluded that although hydrogen possessed “several attractive features, most of the evidence we have received was clear that with current technologies, it does not represent a panacea.”

“As the UK looks to transition to a Net Zero economy, hydrogen will likely have specific but limited roles to play across a variety of sectors to decarbonise where other technologies — such as electrification and heat pumps — are not possible, practical, or economic,” the report, which was published Monday, said.

Described by the International Energy Agency as a “versatile energy carrier,” hydrogen has a diverse range of applications and can be deployed in a wide range of industries.

One method of producing hydrogen uses electrolysis, a process through which an electric current splits water into oxygen and hydrogen.

Some call the resulting hydrogen “green” or “renewable” if the electricity used in the electrolysis process comes from a renewable source such as wind or solar. The vast majority of hydrogen generation today is based on fossil fuels.

Monday’s report sought to temper expectations about the role hydrogen could play in slashing emissions and the transition to a net-zero economy.

“To make a large contribution to reducing greenhouse gas emissions in the UK, the production of hydrogen requires significant advances in the economic deployment of CCUS [carbon capture, utilization and storage] and/or the development of a renewable-to-hydrogen capacity,” it said.

“The timing of these is uncertain, and it would be unwise to assume that hydrogen can make a very large contribution to reducing UK greenhouse gas emissions in the short- to medium-term.”

Committee chair Greg Clark said that there were “significant infrastructure challenges associated with converting our energy networks to use hydrogen and uncertainty about when low-carbon hydrogen can be produced at scale at an economical cost.”

“But there are important applications for hydrogen in particular industries so it can be, in the words of one witness to our inquiry, ‘a big niche’,” Clark added.

Industry group Hydrogen Europe did not immediately respond to a CNBC request for comment.

Big plans, big challenges

Over the past few years, major economies and businesses have looked to the emerging green hydrogen sector to decarbonize industries integral to modern life.

During a roundtable discussion at the COP27 climate change summit last month, German Chancellor Olaf Scholz described green hydrogen as “one of the most important technologies for a climate-neutral world.”

“Green hydrogen is the key to decarbonizing our economies, especially for hard-to-electrify sectors such as steel production, the chemical industry, heavy shipping and aviation,” Scholz added, before acknowledging that a significant amount of work was needed for the sector to mature.

“Of course, green hydrogen is still an infant industry, its production is currently too cost-intensive compared to fossil fuels,” he said. “There’s also a ‘chicken and egg’ dilemma of supply and demand where market actors block each other, waiting for the other to move.”

Also appearing on the panel was Christian Bruch, CEO of Siemens Energy. “Hydrogen will be indispensable for the decarbonization of … industry,” he said.

“The question is, for us now, how do we get there in a world which is still driven, in terms of business, by hydrocarbons,” he added. “So it requires an extra effort to make green hydrogen projects … work.”

Renewable energy is an essential factor in Europe’s goal of becoming the first carbon-neutral continent. The climate crisis and the soaring price of natural gas have placed renewed emphasis on the need to transition to a low-carbon energy system.

Europe is on its way: of the 2,664 TWh of electricity produced in Europe in 2020, 34% was provided by renewable sources. But while renewable energy is abundant, you still need to build the infrastructure to capture it.

To meet Europe’s total energy demand with renewables alone would require a large number of infrastructure projects. Each of these would compete with other land uses, such as residential and industrial developments, agriculture and nature.

There is, however, a large empty space with ample amounts of renewable energy nearby: Africa’s Sahara desert. Could one giant solar array there replace Europe’s energy generation?

“If all the engineering, environmental and political challenges are fully addressed, then yes, sufficient energy can be generated in the Sahara using solar plants to cover a large fraction of the EU’s current electricity demand,” says Mahkamov, a professor of Mechanical and Construction Engineering at Northumbria University.

“Considering that the total area of the Sahara is estimated to be around 9.3 million km², and that it has an average insolation of 263 W/m², and taking into account the current level of development and efficiency of today’s solar power technologies, then yes, the Sahara desert does present a huge potential for generating similar quantities of electricity, although with seasonal fluctuations,” he explains.

But the devil’s in the detail.

Sun, sand and solar power

According to Mahkamov, before we can build a giant solar array in the Sahara, we must first research the long-term environmental and social impacts that covering such a vast area with photovoltaics would have.

Then, there’s the issue of installing a large, critical infrastructure in such a remote and oftentimes harsh environment. A Sahara solar installation would also likely face a number of maintenance problems related to the detrimental effect of ongoing sandstorms and the continuous movement of sand across the desert.

Furthermore, unlike the solar panels installed on a roof, solar megaplants have a range of unique requirements. “The conversion technologies must be diversified, and the deployment of a combination of different technologies is also needed to achieve robustness in energy production and full utilization of an intermittent solar irradiation spectrum,” adds Mahkamov.

Another issue that cannot be ignored is that building a mega solar installation in the Sahara would still leave Europe wholly dependent on foreign energy imports, and vulnerable to all the problems that come with such dependence.

The advantage of starting small

Mahkamov says the focus should be on expanding the solar infrastructure right here in Europe—a process that can start by installing solar plants in the vicinity of our own homes.

As part of the Innova MicroSolar project, a consortium led by Mahkamov developed a high-performance, cost-effective concentrating solar power system for small-scale, on-site electricity and heat generation. Instead of one giant array, imagine thousands of much smaller ones.

“The system has the potential to provide the highest energy savings in southern EU countries, covering all electricity demand in some,” he concludes. “When used in a single-family dwelling, it reduces CO₂ emissions by 70 to 95% in southern locations, and about 30% on average in other countries.”

Greenhouse gas emissions have been declining steadily in the EU in recent years, dropping by over a quarter between 1990 and 2019. However, transport is one sector that has bucked the trend, despite advances in technology. Long before city dwellers complained about air pollution and carbon emissions, they moaned about mounds of manure lining the streets and attracting clouds of flies. In the 19th century, horse-drawn vehicles were used to move freight long distances. While carbon emissions were practically non-existent, horse manure was a big sticking point. It topped the agenda during the first International Urban Planning Conference in New York in 1898. Unfortunately, there was no solution to the horse pollution crisis. Eventually, horses were replaced by other modes of transportation made possible by the combustion engine—trading one type of pollution for another. From horses to horsepower It’s been a long ride from there to here. However, the transport sector continues to create a huge amount of pollution, with road transport accounting for around one-fifth of the EU’s total CO₂ emissions. Reducing greenhouse gas emissions from heavy-duty vehicles like freight and refuse trucks, as well as buses and coaches, is a priority. This sector, which is responsible for a quarter of the EU’s CO₂ emissions from road transport, saw emissions rise by 29% between 1990 and 2019. Moreover, emissions from trucks are set to grow as a proportion of the total, said Andrew Flagg, a senior consultant and project manager at Element Energy, part of multinational consultancy firm Environmental Resources Management. This is due to other vehicles being further ahead with low-emission technology, through the likes of traditional electric batteries in cars. “With decarbonization taking place at quite a pace now for cars and buses, the share of heavy goods vehicles in terms of emissions is going to grow,” he said. “So there’s a particular need to accelerate the decarbonization for those vehicles.” But trucks face challenges when it comes to using electric power compared with lighter vehicles. “The problem is that this sector is particularly difficult to decarbonize,” said Flagg. The long distances that trucks need to travel, for example, creates issues for how often batteries need charging, how fast they charge, as well as the available charging infrastructure. Truck batteries can also be heavy and large, affecting the amount of transportable cargo and how far they can travel before they need recharging. Harnessing hydrogen One answer is to use hydrogen power, using a process whereby hydrogen and oxygen gas are fed into a fuel cell to produce electricity. “With the higher energy density with hydrogen, you can have fewer batteries on a truck,” said Flagg. “This enables you to travel those longer distances and cope with the heavier payloads.” Hydrogen-powered vehicles can also rapidly refuel in minutes. “As a fleet operator, you would not want to spend a long time charging a vehicle,” said Flagg. “Hydrogen enables you to refuel much quicker and therefore enables operational flexibility.” While the technology has shown promise, it has so far often tended to be deployed in smaller-scale demonstrations of limited truck numbers, said Flagg. The H2Haul project that he leads plans to take things to the next level by deploying a fleet of 16 new heavy-duty hydrogen fuel-cell trucks. These will be rolled out in Belgium, France, Germany and Switzerland in collaboration with two major European truck manufacturers, IVECO and VDL. The technology’s performance will be assessed by driving the trucks for more than a million kilometers during normal operations. The first trucks will be on the road in the coming months, with all expected to be in operation by the end of 2023. Performance data will then be collected and analyzed. 16 trucks, 6 fueling stations “H2Haul is groundbreaking in that it’s 16 trucks,” said Flagg. “I would say it’s the next step in terms of getting trucks deployed by European manufacturers, upscaling the number of trucks being developed, and deploying fleets in a range of different countries and operating environments.” To demonstrate their viability, H2Haul is also developing six hydrogen fueling stations. Two are already operational in Switzerland, while others are expected in Belgium and France in the coming months, and two in Germany by the end of 2023. Researchers are now employing a similar approach for waste-collection trucks. The REVIVE project is integrating fuel-cell technology into 14 waste trucks operating in real-world conditions for at least two years at a total of 8 sites in Belgium, Italy, the Netherlands and Sweden. With waste trucks, hydrogen technology has tended to be deployed by smaller manufacturers so far, said Dimitri Van den Borre, a project manager at Tractebel Engineering in Brussels, Belgium, and project lead for REVIVE. “What we need is bigger manufacturers stepping into this market,” he said. Waste benefits Using the technology in refuse trucks is expected to have several advantages. One is that they tend to drive a pre-defined route from a single depot. “The vehicles operate within a confined area, and in this early stage of hydrogen rollout such operations are useful because they don’t need a lot of refueling stations,” said Van den Borre. Waste trucks also often run in urban areas with low air quality and are highly visible to the public. This means residents get to experience the benefits for pollution and noise reduction first-hand. Furthermore, organic waste from incinerators can be used to generate hydrogen, creating a circular ‘waste-to-wheels’ model. And excess energy can be used to power other vehicles or industrial applications. At present, REVIVE has five trucks on the road that have driven over 13 500 kilometers in total so far. However, operational data is limited in the early stages and more extensive results are likely to start emerging from next summer, said Van den Borre. Nevertheless, the trucks are performing well. “It’s a nicer driving environment and they produce less noise than conventional waste collection trucks,” he said, adding that drivers have reacted positively so far. “I think in general, they are quite happy with the trucks and the technology. On a technological level, everything is fine and the trucks are doing what they should be doing.” Achieving traction But a variety of challenges remain at this stage of development. Van den Borre listed the lack of regulation and directives on truck maintenance, as well as the limited current number of hydrogen-equipped truck depots as issues. However, the industry has called for a scaling-up, while the EU moved to accelerate hydrogen development in October. Adopting rules to spur alternative refueling infrastructure, MEPs called for hydrogen refueling stations every 100 kilometers by 2028—ramping up a previous target of one every 150 kilometers by 2031. Van den Borre thinks that projects like REVIVE can open the door for bigger initiatives, potentially leading to the market for hydrogen trucks properly taking off within the next decade. But to boost traction for hydrogen-fuel-cell technology in trucks, drivers themselves should not be forgotten, he added. “It’s not just about dropping the truck and the keys with the driver, but getting them involved in the process,” he said. “You have to find motivated people, engage with them early on and set their expectations right.”

Batteries are undoubtedly part of our energy future. Should you put one in your home now to store solar output, manage your energy use and cut costs? It really depends on what you want to achieve.

Studies in 2017 and 2021 identified key motivations for installing home batteries:

• using your own solar energy
• good for environment
• independence from the grid
• saving money.

With these goals in mind, our research suggests it’s hard to justify buying a battery right now on cost savings alone. If other reasons also matter to you, it might be justified.

Using your own solar

More than 30% of Australian homes have solar systems. They typically generate more than is needed during the middle of the day, less than is needed during morning and evening demand peaks, and nothing at night.

If you don’t have a battery, when you need more power than your solar system generates it’s imported from the grid. You can also export surplus energy to the grid and be paid for it.

But, as solar capacity grows, the maximum power new solar system owners are allowed to export is being limited in many locations. And if too many people in your street are exporting, the local voltage will go high and solar inverters will curtail generation.

One way you can avoid curtailment is by shifting some of your energy use to the middle of the day. Significant loads that could be shifted include:

• water heating
• pool pumps
• air conditioning
• appliances such as dishwashers, clothes washers and dryers
• electric vehicle charging.

If you still have surplus generation, it can be stored in a battery and used later to reduce the energy you import from the grid to cover loads you can’t shift. The energy you could transfer via a battery each day will be whichever is the minimum of your excess generation and the amount you normally import. For example, if you have 3 kilowatt-hours (kWh) of excess generation in a day but import only 2kWh to meet your overnight loads, the maximimum energy you can transfer via a battery is 2kWh.

The graph below shows an example of the energy that could be transferred each day of a year, averaged over 40 houses at Lochiel Park, a precinct of low-energy housing in Adelaide.

For these households, a battery with an 8kWh capacity could handle the energy transfer most days. However, the average energy transferred each day is only 4kWh because some days have low surplus generation or low overnight demand. Households with large solar systems and large daily energy imports from the grid can transfer more.

The battery itself will limit rates of charging and discharging. If you are generating more power than it can handle, some of the surplus will be exported or the solar output could be curtailed. If your load is more than it can handle, you will need extra power from the grid.

Environmental benefits

Storing surplus solar energy and using it instead of fossil-fuel energy from the grid will have environmental benefits.

Most home batteries are lithium-ion batteries. Despite concerns about the environmental impacts of a lithium-ion-led energy revolution, efforts are being made to reduce these impacts.

Other ways to reduce environmental impacts without a battery include:

• use less energy, and shift your load to match your clean energy supply
• choose a green retailer or buy GreenPower.

Independence

A 2017 study found nearly 70% of respondents wanted to eventually disconnect from the grid. Remote households have done it for decades, but need large solar systems and large batteries backed up by diesel generators and gas for heating and cooking.

Being connected to a grid has significant benefits. When not generating enough solar power you can get energy from somewhere else. And when generating more than you need, you can send the surplus somewhere else that needs it. Connecting many loads to many generators increases flexibility and efficiency.

A home battery can let you run your home when the grid fails, but you may need extra equipment to isolate it from the grid at such times. Being off-grid means you may also need to manage your battery differently to keep enough energy in reserve to meet your needs during outages.

Saving money

You could use a battery to reduce costs in two ways:

• store surplus solar energy during periods of a low feed-in tariff (the money you receive for exporting energy to the grid), then use it later instead of importing energy when the price is high
• join a virtual power plant (VPP).

Let us explain further.

The cost of electricity varies throughout each day, depending on demand and on available generation. If you have a meter that records when energy is used, time-of-use and dynamic tariffs will allow you to make the most of price fluctuations.

If the difference between your feed-in tariff and your peak import price is 40c/kWh, each kWh of solar energy you store then use during the peak period saves you 40c. The graph above showed an average daily transfer of 4kWh, saving $1.60 per day. But this household requires an 8kWh battery, costing about $9,600. The payback period is over 16 years – beyond the warrantied life of the battery.

In 2017 we simulated battery use for 38 houses with solar to determine the viability and payback period. Each dot in the graph below indicates the payback period for a particular household with given battery size. The horizontal axis shows the annual surplus energy it generated.

The payback period is better for smaller batteries, which cost less, and for houses with larger annual export.

We assumed a price difference of 40c/kWh between import price and feed-in tariff. We also assumed a future battery price of $600/kWh – we are not there yet (unless you can get a generous subsidy).

The other way of reducing the payback period, and supporting the grid, is to join a virtual power plant (VPP). A VPP is a network of home solar batteries from which the electricity grid can draw energy in times of need.

VPP operators typically offer discounts on the battery cost, its management to take advantage of the retail tariffs on offer, and payments for allowing them to use your battery to trade energy on the electricity markets. Subsidies and payments vary across VPPs.

Other options might be a better bet at this stage

Understand why you want a battery before you start looking. There are other options for making better use of your solar generation, getting clean energy and reducing your costs.

If you have a large solar system, high grid imports and can get a good subsidy, or if you just want cutting-edge energy technology, then you might be able to justify a battery.

If you don’t have solar already, the economics of a solar system with a battery can look attractive. But the solar panels will provide most of the savings.