By Angela Macdonald-Smith
February 3, 2018 - The Japanese manufacturing giant leading a world-first attempt to convert Victorian brown coal into liquid hydrogen for export says "positive discussions are well under way" with its private-sector partners as it looks to push the project towards commercial operation.
Kawasaki Heavy Industries said initial engineering and design work for the plant had been completed, and the team was "liaising with the relevant parties to establish a successful pathway for the project", which has the potential to create a new export industry.
It committed to releasing details of the project throughout this year for consideration and consultation.
Producing hydrogen from Victoria's brown coal for use in zero-emission fuel-cell vehicles could provide a commercialisation route for some of the largest brown-coal deposits in the world. While Kawasaki's project plans date from 2014, the drive for Australia and Japan to jointly pursue opportunities in the hydrogen supply chain got a boost last month from an accord signed by Prime Minister Malcolm Turnbull and his Japanese counterpart Shinzo Abe.
Under a deal signed in early 2016, Shell Japan, Iwatani and J-Power are working with Kawasaki on the hydrogen supply chain initiative.
The Australian part of the project would include the conversion of brown coal to hydrogen gas in the Latrobe Valley, then the liquefaction of the gas in the Port of Hastings area, near to where AGL Energy is planning to build a $250 million LNG import terminal. The liquefied hydrogen would be stored then loaded into a special purpose-built ship for transportation to Japan, which has ambitions to create a "hydrogen society".
Carbon waste would be captured from the process and stored securely underground, potentially in the depleting Bass Strait gas fields.
But Kawasaki said the Hydrogen Energy Supply Chain project team still had to prove the various elements of the project could be successfully demonstrated before moving onto a larger, commercial-scale operation.
The use of hydrogen for energy transport and storage is seeing heightened interest from industry as companies explore options for fuel in an increasingly carbon-constrained world. According to the Hydrogen Council, the fuel could supply up to a fifth of global energy needs by 2050 and generate a `market worth $US2.5 trillion ($3.1 trillion) by 2050.
However, just how carbon-intensive the process is depends greatly on how the hydrogen is produced, experts say.
"Given the massive scale of Victoria's brown-coal resource, there is potential for material economic benefits if it is developed," said Saul Kavonic at consultancy Wood Mackenzie, while pointing to the technological and cost challenges involved.
"Coal-to-hydrogen production, with high moisture feedstock, plus carbon capture processing, plus carbon storage, plus hydrogen transport to Japan will present technological and commercial challenges, requiring solutions that potentially a collaboration between Australia and Japan could work together on," Kavonic said.