While the Australian energy market currently faces unprecedented challenges, technology is creating significant opportunities for the industry.
We are seeing advancements in renewably produced fuels potentially opening up both domestic and international markets to Australia at a time when there is great uncertainty about the future of energy supply and energy security.
Governments the world over are working towards reducing dependence on fossil fuels, with major economic groups such as the G7 committing to phase out all fossil fuel usage by 2100.
The urgency to implement alternative sources of power is intensifying as populations grow. For example, in the 20th century, global population rose from 1.6 billion people to 6.1 billion. Concurrently, carbon emissions grew twelve fold.
With the new energy solutions deployed today, we are witnessing a dramatic uptake of renewable energy sources, such as solar, wind and thermal.
A local example is the construction of 17 major wind farms developed in South Australia since 2003 with numerous new renewable energy projects planned over the next 12 to 24 months.
The implementation of such large-scale renewable energy projects represents part of the solution, but also creates some serious challenges for the Australian energy market. There are two key reasons why the energy market is so challenged.
Firstly, there is the well documented concern that renewable energy is volatile, not producing enough electricity when conditions are unfavourable, commonly during peak hours.
There are also concerns that at certain times there is too much energy produced, which the energy system cannot absorb – resulting in this excess energy being wasted.
The second challenge is that renewables dramatically change the way we use the electricity grid.
Digitalisation is enabling the energy user to be increasingly more engaged with their energy choices and consumption. This trend is expected to grow, giving more control at the consumer end.
With all the above taken into consideration, I see three key changes in the way we generate and consume energy in Australia that will impact our grids significantly:
- More distributed wind and solar farms coming online, in particular, solar on roofs which the energy system has little control over
- More energy storage, utility scale storage and battery storage going into homes
- An increased uptake in electric vehicles.
As a result, the electricity grid is changing from its traditional “˜centralised unidirectional flow of energy’, where electricity production is controlled by a selection of major power producers, to a “˜distributed bidirectional flow of energy’ where the grid is powered from a wide array of distributed energy sources.
The delicate balance between electricity generation and consumption has always been a challenge. Our energy system was essentially designed and expanded upon over decades to suit centralised generation with a unidirectional flow of energy over long distances.
Now with addition of many new distributed and variable power sources, we are further challenged by the resultant instability in a power system that was not designed to accommodate these variable distributed resources. If too much or not enough energy is delivered into the system at any one moment, the power system becomes unstable and crashes.
For a country like Australia, blessed with abundant sunlight and wind resources, this volatility presents a challenge to the grid. Nonetheless, I believe it is also the source of a tremendous opportunity.
One such technology which we have identified as being particularly well suited to Australian conditions is the proton exchange membrane (PEM) electrolyser.
In this case an electrolyser uses an electrochemical process to convert water (Hâ‚‚0) using electricity into 100 per cent pure hydrogen and oxygen.
PEM electrolysers are designed to operate in volatile conditions such as the evolving Australian power grid with its increased uptake of variable renewable generation.
These utility scale electrolysers can, with surgical precision, be energised and de-energised within less than 10 seconds, capturing excess energy from the grid when energised but also shedding its large load when there is excess demand.
This is about using inexpensive or free energy which would otherwise be spilled to produce a clean form of stored energy that has many value streams, 100 per cent pure hydrogen, with the only by-product being 100 per cent pure oxygen.
The economics for hydrogen as long-term storage and a dispatchable source of power are strong. Hydrogen can be injected and stored into the existing gas grid and used to potentially meet our required seasonal storage requirements to stabilise our energy system, for example when renewable energy is limited.
It is also useful for transport, with the gas capable of being used in hydrogen fuel cell powered vehicles. Hyundai’s latest fuel cell vehicle, the autonomous Nexo, can travel approximately 800 km on a single tank of hydrogen fuel (6 kg) that takes three to five minutes to fill.
For Australia this has direct relevance, with Siemens having recently developed its third generation grid scale 10 MW SiLyzer 300 PEM electrolyser platform late last year off the back of its proven and well known second generation 1.25 MW SiLyzer 200 PEM electrolyser platform which will soon support a refuelling station and service centre in Australia.
Twenty hydrogen-fuelled cars will use the service and all power for the electrolyser will be generated from renewably sourced power contracted from the Hornsdale wind farm in South Australia.
Nations across Asia are desperately seeking renewable fuels so that they can reduce their carbon footprint and meet their COP 21 requirements. The potential benefits to Australia are significant as our traditional markets for fossil fuels begin to wean themselves off these carbon based fuels.
Perhaps most beneficial for Australia is the potential to mass produce hydrogen which can be converted to ammonia (NH3). Ammonia can be stored for longer periods and transported over greater distances at a lower cost than just hydrogen itself.
Ammonia is a hydrogen carrier and the second most traded industrial chemical worldwide, renewably produced ammonia could be loaded on ships and exported as a renewable fuel void of carbon.
By 2050 there will be 10 billion people on the planet. Using ammonia as a fertiliser makes land more productive which is increasingly vital as the population grows and living standards improve.
People need food and energy and it must be COâ‚‚ free, that’s where renewably produced ammonia will have far reaching benefits for mankind.
Make no mistake, renewably produced fuels offer a serious opportunity for Australia to ease its domestic energy challenges while developing a sizable export industry that could rival that of our existing LNG industry over the next 20 years.
From instability to strength, technology is opening up new avenues for the lucky country.