Hydrogen in Queensland: blended hydrogen target not $19 million for industry

I have been skeptical of the hydrogen economy in the past, particularly as it relates to transport. My early analysis, using a 2013 study, showed that the cost of building a hydrogen refueling station was between US$2.5-$5 million.

The implication is, that in the race to fueling zero emission cars, the ability to plug into any socket with an EV was tough to beat, even with the substantial refueling time. The capital costs and risk associated with the first hydrogen refueling network would be too big for the private sector.

I am passing over lots of factors: network load, range, lithium battery fires, hydrogen rapid exhaust when punctured, differences in ‘zero’ emission production, coolness etc. A post for another time.

But that race continues on. EVs are searching for faster charging while hydrogen pushing down production, storage and delivery costs. It is a worthy race.

The other applications of hydrogen are interesting as well. The chart below from ACIL Allens is good summary. I like the heating and industrial use implications. Good, solid, long term demand.

But the Queensland Government seems to all bluster and no guts on the hydrogen economy. ‘The Palaszczuk Government wants to see Queensland become a hydrogen exporter of choice to the world’.

Touting the natural advantages for both gas to hydrogen and electrolysis-based hydrogen production, they have committed just $19 million over four years to developing a hydrogen economy.

Let’s put that into context. The unbuilt Adani coal mine has been promised a 17% royalty discount that would equate to $12 million to $30 million per year – link

If we under-invest in the initial stages then we face an uphill battle to supply internationally.

My question for Queensland is how to drive up the total investment (govt and private sector) into the hydrogen economy.

My investor instinct is to push an established technologies/processes and meet an existing customer need rather than take production risk and hope that customers emerge.

My target market is existing gas customers and the technology is blended hydrogen.