APA : Hydrogen is in the pipeline and Australia has a natural advantage

Opinion piece by APA CEO and Managing Director, Rob Wheals, published in The Australian newspaper, Monday 14 June 2021

As the International Energy Agency acknowledged in their recent report Net Zero by 2050, the gas sector is very well placed to accelerate the deployment of low emissions technologies, helping to steer the country's energy transition towards a net zero pathway.

Here in Australia, natural gas currently accounts for about 25 percent of primary energy use and about 20 percent of electricity generation.

The rapid retirement of coal means Australia will increase reliance on gas to provide energy security by delivering high heat capability for Australia's industrial sector and critical firming for variable renewable energy.

That critical role, helping prop up the grid when the sun doesn't shine and the wind doesn't blow, was recently underscored by the interim National Gas Infrastructure Plan, which noted that 'as the Australian electricity grid balances … record levels of supply from solar and wind, the firming role gas-powered generation plays in grid stability and reliability is becoming increasingly important to keep the lights on across Australia.'

As the eighth-largest owner and operator of renewable power generation assets in the country, this is a challenge APA well understands.

As we look ahead to 2050 and beyond, consistent with the International Energy Agency's observations, the gas industry is well placed to diversify and deploy decades of knowledge, capability and critical infrastructure to play a leading role in developing the low emissions technologies of tomorrow, at scale, and to support our own ambitions for a net zero future.

Take hydrogen, for example. It is absolutely clear that Australia has a natural competitive advantage.

While there are economic challenges, and the science of developing a clean hydrogen economy continues to develop, we are a step ahead with an abundance of wind and solar to power the production of renewable 'green' hydrogen and an existing network of pipelines potentially capable of transporting hydrogen for domestic use or export.

Indeed, a recent Frontier Economics study showed that continuing to use gas infrastructure can reduce emissions at about half the cost to customers than ­electrifying the services provided by gas.

APA's 15,000km of gas pipelines not only connect our cities and regional areas but they are linked and adjacent to some of the best geographical locations for hydrogen production in the country, such as renewable energy zones. That's why we're we've partnered with Future Fuels CRC and Wollongong University, in a world-leading partnership to help us understand the capacity of our own transmission network to transport hydrogen.

We have a project underway investigating the conversion of a section of gas pipeline in Western Australia to 100 percent hydrogen. While there is more work to do, the early testing results are positive.

APA is also working with other energy and gas industry players to potentially develop a 'hydrogen valley' in the NSW Hunter. The federal government's chief adviser on low-emissions technologies, Dr Alan Finkel, has praised the development of the plan, noting that ' … just the fact that this consortium has come together to put a proposal like this together is extremely exciting. I doubt it would have happened just a year ago'.

Hydrogen is one example where the industry is playing a leading role, but it's not the only area where APA, and others, are working to deploy low emissions technologies that we will need to accelerate the energy transition.

Once complete, our hybrid energy microgrid at the Gruyere Gold Mine in Western Australia will reduce the overall carbon intensity of the power supply to the mine by about 10 percent, thanks to the introduction of complementary solar generation and battery storage, alongside the mine's reliable gas power supply.

Demand for these kinds of innovative energy solutions is likely to grow exponentially as technology continues to mature and develop.

So while we should be in no doubt about the critical role gas will continue to play in our nation's energy mix, the industry is also rolling up its sleeves to support the development of low emissions technologies that can steer Australia's energy transition towards a net zero pathway and accelerate the technologies of the future.

Rob Wheals is APA's chief executive and managing director.