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Money down for hydrogen hopes in Victoria’s hottest and driest region

Those mapping out the economic future of Victoria’s hottest and driest region hope it can be positioned as a pillar of the budding hydrogen industry.

Private groups and the Victorian Government have invested $50,000 in establishing a Mallee hydrogen technology cluster, which could be part of national network intended to develop a globally competitive industry.

National Energy Resources Australia (NERA), the peak body overseeing the clusters around the country, predicts the industry could be worth $11 billion to the Australian economy by mid-century.

The Mildura-based Mallee Regional Innovation Centre, a partnership between the University of Melbourne, Swinburne University and the Sunraysia Institute of TAFE, began to seriously consider hydrogen projects after economist Ross Garnaut visited the region in 2018.

“We’ve got fantastic access to transport and infrastructure here,” chief executive Rebecca Wells said.

An older man in a suit stands outside, smiling.
Economist Ross Garnaut visited north-west Victoria in 2018 and advised local industry bodies to pursue hydrogen energy projects.(Supplied: University of Melbourne)

Simple to make

Associate professor Colin Scholes, a chemical engineer from the University of Melbourne, said hydrogen energy production was “really straightforward”.

“As everyone learns at high school, water is H2O — so that’s two hydrogen and one oxygen,” he said.

“The issue has been how to make it cheaply and that’s really what we’re getting to now, how to make hydrogen cheaply and competitive against fossil fuels.”

That is where the Mallee’s vast solar resources come in.

“[Hydrogen] is so appealing because all you need is water and a good source of renewable energy, which the Mallee has, so you can make a lot of hydrogen very easily,” Dr Scholes said.

A chart showing two different ways of producing hydrogen.
A comparison of production process for the “blue” and “green” types of hydrogen.(Supplied: Woodside)

Gippsland already ahead

A hydrogen cluster will also be set up in Gippsland to capitalise on the Hydrogen Energy Supply Chain (HESC) project in the Latrobe Valley.

A Japanese consortium headed by Kawasaki Heavy Industries is leading the project, which will see a pilot plant set up to convert brown coal from the Loy Yang mine into hydrogen.

“We’re leading in terms of hydrogen production and this really gives us a great platform to progress the renewable side of hydrogen as well,” Committee for Gippsland chief executive Jane Oakley said.

The Victorian and Federal Governments have each contributed $50 million to the project, which will test the technology for producing hydrogen from coal and the supply chain for shipping it to Japan.

The project will create three tonnes of hydrogen from 160 tonnes of coal for shipment to Japan.

But the coal-to-hydrogen process emits carbon and Kawasaki said the project would not proceed further without the ability to capture and store its emissions.

An aerial shot of a large open cut mine.
A Japanese consortium wants to trial the conversion of brown coal from the Loy Yang mine into hydrogen energy.(Supplied: Environment Victoria)

States, nations eye potential

Dr Scholes said the need for specific infrastructure meant hydrogen was probably still a decade away from becoming a mainstream energy source.

“We currently have a lot of service stations for petrol — we don’t have service stations for hydrogen,” he said.

“Hydrogen can be used anywhere where you need energy — not just vehicles, but you can talk about power stations, also in the mining sector, anywhere where you need an energy source, hydrogen is perfect for it.”

In total, NERA, state governments and industry have invested $1.75m in 13 different clusters.

The Tasmanian Government has invested $50m to help encourage a hydrogen energy industry in the state’s north, while the Queensland Government now has a Minister for Energy, Renewables and Hydrogen.

World leaders such as Japan, South Korea and Germany have already shown an interest in harnessing Australia’s solar and wind potential to produce cheaper hydrogen.

But for semi-arid regions like the Mallee a major challenge remains.

“We don’t necessarily need to start with fresh water,” Dr Scholes said.

“We can start with brackish water, wastewater, things like that — it just costs more to do.

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