JoNova

By Jo Nova

The irony! The only generator that can make affordable hydrogen is brown coal

The Great Green Hydrogen dream was killed by the dual impossibility paradox, it has no customers prepared to pay the Gucci level rates, and it can’t be made cheaper without using brown coal to which would mean it isn’t “green”.

The irony is practically radioactive — analysts admit Green Hydrogen is only economic if a company can get electricity at $30 to $40 per megawatt hour, which Australia had for decades, but blew away by adding “renewables”. Like every other nation on Earth, the more unreliable wind and solar we added, the more expensive our electricity got. These days the only generator that still make electricity at that price now is old brown coal.

For years Australian average wholesale electricity prices were $30/MWh

Sure, for five minute bids, and with generous subsidies stolen from taxpayers, wind and solar can pretend to be cheaper, but it turns out that the hydrogen factories, like every other factory, aren’t efficient if they stop and start every time a cloud rolls over, or the wind ebbs. All the infrastructure and staff, and the insurance and loans are still sitting around clocking up the bills, while nothing gets done. And all the inflows and outflows need to be adjusted, and the temperatures held steady. It would have been obvious to any precocious ten year old that hydrogen plants needed reliable electricity, which means they needed galactic size batteries to fill in the gaps, and therefore an interstellar budget.

The truth is, no one really wants “Green” hydrogen, or green steel, except as a fashion accessory to brag about at Davos. But people might buy it if it was cheap, which it isn’t. The only way to make it cheaper is with brown coal, which means it’s isn’t green hydrogen, and so we find the nation has accidentally stepped into a Escher Puzzle where all staircases lead upwards and left and end right where they started except the bank balance goes phht with every cycle.

Let’s not underestimate the scale of this debacle

Andrew “Twiggy” Forrest burned off $2 billion dollars (AU) on setting up his Green Dream Hydrogen energy plan which has just collapsed with the loss of 700 jobs. But bigger than that, the Australia Labor Government made it the centerpiece of its $2 billion Hydrogen Headstart program.

On the 7:30 Report he kept dodging the question of what this meant for Labors big Renewable Nation plan, which means it obvious isn’t good.

At one point he mentioned “the war”. As if somehow a war which limited gas supplies and drove up the price of coal “dragged up the price” of renewables. The truth was that the Ukrainian-Russian War and the death of the Nordstream Gas pipeline should have been the best thing that could happen to renewables. It was their golden market opportunity to fill the gap, but it only exposed how useless they are. When push came to shove, everyone wanted coal and gas, including the companies that make wind turbines and solar panels. The reason wind and solar went up in price was because wind power can’t make wind turbines, and solar power can’t make solar panels, and no one can afford to make batteries.

Those killer costings on Hydrogen:

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.

Or worse, $30 a megawatt hour:

Keep hydrogen dream alive, Andrew Forrest tells Labor

By Joe Kelly, Nick Evans and Rhiannoin Down, The Australian

Dr Finkel, said green hydrogen could replace coal as a chemical-­reducing agent in the production of iron, but acknowledged its viability was “highly dependent” on the costs of renewable electricity.

He said the goal should be to start producing green hydrogen at about $2 a kilogram, “which would require the electricity that is used to make the hydrogen to be less than about $30 per megawatt hour – which is very cheap.”

The current average price on the wholesale national electricity market in the top two renewable states this month is $199 per megawatt hour (SA) and $214 in Tasmania. Even in Qld and NSW the prices are still $100 a megawatt hour more than they used to be.

Twiggy Forrest and Anthony Albanese believed their own fantasy propaganda.  Twiggy was still talking tonight of “infinite” energy in Australia from the sun and the wind, showing how little he cares about numbers that matter.

Image by Pete Linforth from Pixabay

Graph: AER data