Radical plan to build world’s biggest green electrolyser and hydrogen power plant

Green hydrogen is a much hyped commodity. And the world is full of opinions and lists of what it will, and what it won’t do. And at the very bottom of one well-respected ladder of opportunities is using green hydrogen as a balancing power plant for a renewables grid.

Yet that is exactly what the South Australian government has promised to do. It intends to build a 250MW hydrogen electrolyser – 10 times bigger than any other operating plant in the world – to feed into a 200MW hydrogen power plant, which would also be the biggest in the world. The man in charge of this ambitious project is Sam Crafter, the CEO of the Office of Hydrogen Power in South Australia, and he is used to being told that his projects are impossible dreams.

He was head of the taskforce that paved the way for the original Tesla big battery, by far the biggest in the world at the time, and 100 times bigger than what the Australian Energy Market Operator had predicted – just a few months earlier – could be accommodated in the grid.

Crafter is seeing a similar level of doubt about this project as he did about the Tesla big battery. “I think everyone was sceptical … I mean, everyone,” Crafter says in the latest episode of RenewEconomy’s weekly Energy Insiders podcast.

But the battery got over the line because it was given an important government contract, and was helped by Tesla’s deep pockets and Elon Musk’s even bigger ego, and the resources of international teams led by battery owner Neoen and Tesla.

It worked, and what is officially known as the Hornsdale Power Reserve is just one of dozens planned for the country’s grid, now looks decidedly small in comparison to some newer battery projects, and yet has changed the thinking about the role of battery storage in a modern grid dependent on wind and solar.

This time round, for the Whyalla green hydrogen project, the South Australian government is carrying the entire cost – just short of $600 million.

Which means that even though it is difficult to imagine – on current assumptions about the technology – how it could possibly turn a profit, it has drawn the interest of hundreds of equipment suppliers, technology companies, project developers and hydrogen customers from around the world.

Crafter says the plan is bold, but simple. By building these world leading projects, South Australia expects the global industry to come to it, and hopes to ensure it will lead to even bigger projects, at the steel city of Whyalla and the neighbouring Port Bonython green hydrogen hub.

“It will be .. the launching pad to get to those larger scale projects that the industry is rushing towards,” he says. “So we think that’s an advantage that we have there.”

And, Crafter notes, it is further justified by South Australia’s desperate need for new load to soak up the excess power it produces, particularly from rooftop solar in the middle of the day, and its rapidly expanding portfolio of large scale wind and solar.

Some modelling for how the electrolyser and power plant might work has been provided by Frontier Economics.

It shows the hydrogen electrolyser (see graph above) will likely operate during the day-time hours when solar – both from large scale solar farms and particularly rooftop solar – is abundant.

The power plant will be more flexible, producing electricity at peak times when the price is high. It will rarely operate when the electrolyser is working. “There is no opportunity to arbitrage spot prices if the electrolyser and hydrogen turbine operate at the same time,” Frontier says.

Another way to look at it is in the tables below. The average load will be close to 200MW, and it will run from an average 4.4 hours a day in winter to 8.9 hours in summer.  The average operation of the hydrogen turbine, on the other hand, will be little more than one hour a day, throughout the year.

Conspicuously absent from those calculations are the cost of the technologies, the cost of inputs (wind and solar and water), the efficiency of the process (not very), and the price obtained for the product (hydrogen and electricity).

Crafter notes that South Australia already sources just over 69 per cent of its energy demand from wind and solar, and that is expected to rise to net 100 per cent in coming years (officially by 2030, but in all likelihood well before then).

“So what we need is more dispatchable power. The government has a history here in South Australia of looking to be a leader in technology development in the renewable space,” he says.

“We did that, obviously, with the storage projects that we’ve done in the past around the big battery that Neoen and Tesla built here.

“The government went out to market looking for a grid scale battery when grid scale batteries didn’t exist. I think that’s the same sort of philosophy.

“Obviously, it’s very different in terms of project delivery and technology. But the philosophy is, Can we set a challenge for industry and will industry respond and be able to build a grid scale and then see more developments.”

The problem with green hydrogen power plants is their lack of efficiency, and they see comparisons between hydrogen cars and electric cars. EVs are about four times more efficient.

Many analysts believe that battery storage – charged by wind and solar – is a more efficient and cost effective way to meet short term dispatchable needs, and other technologies such as pumped hydro can solve the long term and seasonal problems.

But pumped hydro is also hard to do, facing environmental issues, cost blowouts and it takes a while to build. Efforts to get one of six possible pumped hydro plants in South Australia over the last five years have come to nought, despite the promise of government funding.

Which is largely why South Australia has now turned to green hydrogen, and because it believes that even if green hydrogen power plants might not be the best idea as a standalone project, they might make sense as a “by-product” of a bigger and wider industry and hydrogen eco-system.

There are tens of gigawatts of large scale wind and solar projects looking for green hydrogen opportunities – be they in local manufacturer, green ammonia, green steel, or hydrogen exports.

If that investment is catalysed by the world’s biggest electrolyser and hydrogen power plant, then there is a chance it can replicate the success of the big battery. And the time lines are similarly short – South Australia is looking for proposals in March and wants it up and running in 2025. The clock is ticking.

By:  Giles Parkinson

From:  https://reneweconomy.com.au/the-radical-plan-to-build-worlds-biggest-green-electrolyser-and-hydrogen-power-plant