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The Energy Transition Ain't Happening: Hydrogen In Australia
Manhattan Contrarian ^ | 20 Jul, 2024 | Francis Menton

Posted on 07/21/2024 5:16:30 AM PDT by MtnClimber

These days, there is lots and lots of news about how the supposed “energy transition” is not happening. There’s so much news on this subject that I could devote this entire blog to that subject alone and have plenty to occupy my time. Expect multiple posts about this topic over the next several weeks.

To whet your appetite, I will take you today to Australia, where we find the latest news on the inevitable collapse of impossible dream of “green” hydrogen as the means to make electricity from wind and sun work.

But before getting to the latest news, kindly let me remind you of my post of February 14, 2024 titled “When You Crunch The Numbers, Green Hydrogen Is A Non-Starter.” “Green” hydrogen is the type of hydrogen produced by electrolysis of water using electricity generated only by wind and sun. The idea is that you run your electrolyzer to make the “green” hydrogen on sunny and windy days when the wind turbines and solar panels produce a surplus; and then you burn the hydrogen to cover the gaps in wind/solar production on overcast days and calm nights. If it all works out, you end up with electricity that matches demand 24/7/365, and there is no carbon in the process from beginning to end. In other words, energy utopia.

But has anybody crunched the numbers to see if this can be done economically? By “economically,” I mean: producing electricity costing at or about the same as our current cost of electricity.

My February 14 post discussed a Biden Administration initiative to allocate $7 billion in government funding to “catalyze” $40 billion in private investment to jump-start production of “low-cost, clean hydrogen.” How “low-cost”? The government of course didn’t quantify it, but my post cited a guy named Jonathan Lesser who had done a work-up that concluded that they could get to “green” hydrogen in a price range of $2.74 - $5.35 per kg of hydrogen provided they could buy the wind/solar-generated electricity for $40 per MWh. Anyway, that’s the goal.

Does $2.74 - $5.35 per kg of hydrogen sound cheap? I love the way they quote prices for hydrogen in different units from the normal units used for natural gas, in order to make it so no one can easily make the comparison. Natural gas prices are generally quoted in $ per MMBtu. What you need to know is that it takes 8 kg of hydrogen to produce 1 MMBtu of energy. So $2.74 - $5.35 per kg of green hydrogen translates to $21.92 to $42.80 per MMBtu. In the past 5 years, U.S. natural gas prices have been under $4/MMBtu for most of the time, and have never reached as high as $10/MMBtu. And to achieve the green hydrogen prices of $20 - 40/MMBtu requires a cost of wind/solar electricity of $40/MWh. Recent contracts for wind and solar generators have been requiring guaranteed prices of $150/MWh and up. So adjust the $20 - 40/MMBtu accordingly. The green hydrogen is going to cost you at least 10 times the cost of natural gas, and perhaps as much as 20 times.

On to the latest news from Australia. Australian energy blogger Joanne Nova reports yesterday (July 19) that a large green hydrogen project in that country has just “collapsed” with the loss of 700 jobs. I assume that by “collapse” Ms. Nova is referring to some sort of bankruptcy or equivalent. Ms. Nova’s headline is “The Hydrogen Titanic just collapsed in Australia because renewable electricity costs too much.”

The project in question is the baby of Australian industrialist Andrew “Twiggy” Forrest and his company Fortescue. According to Ms. Nova, Mr. Forrest has “burned off $2 billion dollars (AU) on setting up his Green Dream Hydrogen energy plan.” Forrest’s project had been the “centerpiece of [the Australian Labor government’s] $2 billion Hydrogen Headstart program.”

Ms. Nova quotes liberally from the big Australian newspaper called The Australian, which unfortunately is behind a pay wall. I will just use Ms. Nova’s excerpts. Here is the key one:

For more than two years, Fortescue has been full throttle trying to turn Forrest’s promise of converting green hydrogen into a commercial reality within years. Instead, as the economics around surging electricity costs needed to produce green hydrogen sunk in, deadlines were pushed back and back. The mission changed, then there was a revolving door of executives.

The problem is very simply the cost of producing the “green” hydrogen, which is not remotely competitive with natural gas. Nor can anything be done to make the cost anything close to competitive. This quote is from another Australian source called Financial Review, also behind pay wall:

Matthew Rennie, a former EY partner who is now an independent adviser, said his firm’s analysis indicated that prices for power and electrolysers – which use renewable power to split water into hydrogen and oxygen – would need to be much cheaper to produce green hydrogen in Australia even at under $3 a kilogram. He said power prices would need to be less than $40 a megawatt-hour and electrolyser costs would need to more than halve to produce hydrogen at that level – still 50 per cent more expensive than the government’s $2 target for the gas to be competitive.

The $3/kg target is the equivalent of $24/MMBtu — 5 to 10 times the typical natural gas price in the U.S. of $3-4/MMBtu. And they’re saying that to achieve even that, they would need wind/solar-generated electricity prices of $40/MWh and electrolyzer prices to halve. Ms. Nova reports that the two Australian states that produce the most electricity from wind and solar are South Australia and Tasmania, and they have wholesale electricity prices of $199/MWh and $214/MWh respectively. So in the real world the cost of this green hydrogen is going to be more like 20 or more times the cost of natural gas, instead of the paltry 5 to 10 times higher that they were hoping for.

Meanwhile, I keep reading many things saying that green hydrogen is the wave of the future. But I can’t find anything about major production facilities for the stuff coming online. Maybe none ever will.


TOPICS: Business/Economy; Science; Society
KEYWORDS: greenenergy

1 posted on 07/21/2024 5:16:30 AM PDT by MtnClimber
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To: MtnClimber

Hydrogen is a very difficult fuel to handle. Leaks can easily cause explosions and then there is the problem of hydrogen embrittlement of steel.


2 posted on 07/21/2024 5:16:55 AM PDT by MtnClimber (For photos of scenery and wildlife, click on my screen name for my FR home page. More photos added.)
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To: MtnClimber

Bookmark or later reading. I have something pertinent to add to this subject.


3 posted on 07/21/2024 5:28:25 AM PDT by pingman (It's a Clown World, and we're paying for it.)
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To: MtnClimber

I have convinced myself that “renewable energy” is burning wood.

The rest is just Government making changes so that you have less, in the end. It is making these “green” energies cost-competitive by raising the price of existing alternatives.

No one knows how much CO2 the Earth’s atmosphere is “supposed” to have. Those who say differently are selling snake oil.


4 posted on 07/21/2024 5:41:06 AM PDT by Empire_of_Liberty ( )
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To: MtnClimber

Green hydrogen has been used for centuries. The Sun converts Hydrogen into Helium. The sunlight powers the farms which literally powers our bones. It powers every plant on Earth as well. As green as it gets


5 posted on 07/21/2024 5:51:20 AM PDT by Nateman (Democrats did not strive for fraud friendly voting merely to continue honest elections.)
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To: MtnClimber
> Hydrogen is a very difficult fuel to handle. Leaks can easily cause explosions… <

Where did you ever get that idea? Oh, wait.

Oh the other hand, this is a core belief of every liberal:
“This time it will be different.”

6 posted on 07/21/2024 5:57:47 AM PDT by Leaning Right (The steal is real.)
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To: MtnClimber

Here is a hydrogen explosion video paid by taxpayers.
Project of senator Kelly.
Enjoy

https://www.youtube.com/watch?v=d5zyplFsY8I


7 posted on 07/21/2024 6:00:35 AM PDT by AZJeep
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To: MtnClimber

There are even a few FReepers who have been sucked into the hydrogen energy nonsense.


8 posted on 07/21/2024 6:31:32 AM PDT by FreedomPoster (Islam delenda est)
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To: All

The numbers for 2023 are in.

Global oil consumption increased to 100.2 million barrels per day.

United States oil consumption increased 0.6% and is now about 19.5 million barrels per day.

China’s oil consumption increased a startling 10% and is now 16.6 million barrels per day.

The EV people are not reducing oil consumption because they are Urban and never drove much anyway. Urban distances are short. And parking is difficult to find, leading to buses and train use. Oil is civilization’s lifeblood, and consumption of it is increasing regardless of EV’s.

There will come a time, soon, where consumption no longer increases. That will not be by choice. That will be as a result of scarcity.


9 posted on 07/21/2024 6:44:58 AM PDT by Owen
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To: MtnClimber

My solution: Hybrid power with nuclear mated with fuel cells which can reform methane and generate power and hydrogen. Also some CO2 but not nearly as much as burning natural gas..

Hydrogen is used safely in many chemical plants today.

We know how to do all these things separately so what we need id to put them together with maximum efficiency and lowest cost. Forget net zero and go for the best process.


10 posted on 07/21/2024 6:59:27 AM PDT by JeanLM
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To: FreedomPoster

“There are even a few FReepers who have been sucked into the hydrogen energy nonsense.”

I suspect they also own EVs, and support Ukraine.


11 posted on 07/21/2024 7:22:49 AM PDT by BobL
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To: MtnClimber

Agree. But I repeat my experience with H2 slush from the X-30 research plane in 1988-1995: We produced it, burned it, stored it, transported it, pumped it.

It was one of the most successful elements of the program. It was slush in order to cool the incredibly hot leading edges of the airplane.

I think a devoted effort by the PRIVATE SECTOR could yield usable H2 in about 50 years.


12 posted on 07/21/2024 7:56:43 AM PDT by LS ("Castles made of sand, fall in the sea . . . eventually." Jimi Hendrix)
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To: BobL

I would not bet against you.


13 posted on 07/21/2024 9:16:45 AM PDT by FreedomPoster (Islam delenda est)
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To: MtnClimber

But if you use government maffs hydrogen power makes perfect sense. It is expensive. It is explosive. It is dangerous. It can’t be stored long term. It must be either compressed in huge heavy bottles or liquified requiring massive amounts of energy to achieve the pressures. It takes twice as much energy to isolate pure hydrogen than it produces when it reacts with oxygen. AND best of all only politically connect corporations will get massive tax dollars for the miraculous transition to hydrogen power.


14 posted on 07/21/2024 9:27:00 AM PDT by Organic Panic (SDemocrats. Memories as short as Joe Biden's eyes)
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To: JeanLM

“My solution: Hybrid power with nuclear mated with fuel cells which can reform methane and generate power and hydrogen.”

What is the efficiency of that vs just generating electricity with nuclear the conventional way?


15 posted on 07/21/2024 10:48:01 AM PDT by aquila48 (Do not let them make you "care" ! Guilting you is how they control you. )
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To: aquila48

The answer is a range. You would heat from the nuke, reform methane to get H2 and then use the N2 in a high temp fuel cell to generate power. The higher the temperature the higher the efficiency.Theoretically the combination could produce 90% efficieney on all fuels consumed (they say).
Fuel cells use hydrogen to make electric power very efficiently. You make hydrogen with steam reforming and the water gas process. This is the way all current hydrogen is made. Put them all together and you have in my opinion the best system. It’s not CO2 free but it’s the lowest CO2 per KWH.


16 posted on 07/22/2024 8:03:22 AM PDT by JeanLM
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