Future proofing: Australia's gas networks look to go green with hydrogen

CK Infrastructure Holdings

22/02/2021 04:39

* Bi-partisan backing gives hydrogen momentum
    * Hydrogen network would save A$13 billion
    * Hydrogen in gas pipeline trials set to start
    * Green methane could avert stranded assets

    By Sonali Paul
    MELBOURNE, Feb 22 (Reuters) - Australia's natural gas
pipeline owners are working to future proof their A$75 billion
($59 billion) in assets amid a global push towards clean energy,
running tests to blend hydrogen with gas and produce green
methane to replace the fossil fuel.
    Cashing in on rare bipartisan support for hydrogen across
Australia's national and state governments to help cut carbon
emissions, pipeline and network owners have already committed
A$180 million to a range of projects involving green hydrogen.
    Australian states have pledged to achieve net zero carbon
emissions by 2050, in line with many developed countries, but
Canberra has yet to commit . urn:newsml:reuters.com:*:nL8N2JY020 urn:newsml:reuters.com:*:nL1N2HV01Eto the 2050
timeframe
    "It's a business risk we all need to manage," said Ben
Wilson, chief executive of Australian Gas Infrastructure Group
(AGIG), owned by units of Hong Kong-based CK Group.
    "What started out as defensive has become an opportunity,
particularly given our renewable energy sources. We can become
the world's largest exporter of green hydrogen," he told
Reuters.
    Pipeline owners seeking government funding for hydrogen
projects aim to show how their infrastructure can be used to
deliver hydrogen in blends with gas and store hydrogen as a form
of renewable energy storage.
    "At the end of the day, we also think that continuing to use
this infrastructure allows the whole economy to decarbonise at a
lower cost," said Dennis Van Puyvelde, head of gas for Energy
Networks Australia.
     A study done for the industry body last year found that to
achieve net zero emissions by 2050, building a hydrogen
distribution network would cost half as much as expanding power
networks to serve businesses and industries that currently rely
on gas, and save Australia some A$13 billion.
    Pipeline companies are working on a shorter time frame than
2050, as some states are pushing to have 10% hydrogen in gas
pipelines by 2030.
    
    EYES ON GREEN METHANE
    A study done for the government found hydrogen can be safely
added to gas supplies at up to 10% by volume without having to
modify pipelines or appliances.
    Van Puyvelde said the advantage of blending hydrogen into
gas allows for a gradual buildup of the hydrogen industry,
requiring electrolysers of up to 1 gigawatt, compared with the
much bigger, more costly electrolysers that will be needed for
green hydrogen exports.
    In the first test of hydrogen into a distribution network in
Australia, AGIG is set to start injecting a 5% blend of green
hydrogen by volume in gas next month, going into 700 homes in
Adelaide.
    Jemena, a company owned by State Grid Corp of China and
Singapore Power, is working on a similar government-backed
project in Sydney, blending up to 2% hydrogen into the country's
biggest local gas network later this year. 
    More projects are in the works, with pipeline companies
shortlisted for A$70 million in hydrogen funding from the
government, the Australian Renewable Energy Agency said.
    For the longer term, the industry is closely watching 
Europe's biggest energy grid operator, E.ON  EONGn.DE , which is
converting a gas pipeline in Germany to deliver pure hydrogen.
 urn:newsml:reuters.com:*:nF9N28000S
     Beyond hydrogen, the ideal replacement for natural gas
would be green methane, if it could be produced commercially.
Methane is chemically the same as natural gas, the fossil fuel.
    Testing the potential, APA Group  APA.AX , Australia's
biggest pipeline company, is building a demonstration plant in
the state of Queensland that would use solar energy to power an
electrolyser to split water, produce hydrogen and combine that
with carbon dioxide extracted from the air to produce methane.
    The project has attracted interest from U.S. companies, and
if it works, could aid all companies around the world, like APA,
that have billions of dollars invested in pipelines serving
liquefied natural gas (LNG) plants.
    "Assuming it's successful, it would be compatible with
existing LNG infrastructure. You wouldn't need to retrofit,"
APA's head of transformation Hannah McCaughey told Reuters. 
 ($1=1.269 Australian dollars)

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Map of Australia's pipeline network    https://tmsnrt.rs/3qG7v08
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 (Reporting by Sonali Paul; Editing by Ana Nicolaci da Costa)
 ((Sonali.Paul@thomsonreuters.com; +61 407 119 523;))