Australia, a nation blessed with abundant sunshine, wind, and vast open spaces, stands at a crossroads in its energy future.

As the world strives towards a sustainable and low-carbon future, two promising pathways emerge: the electric economy and the hydrogen economy. Both hold immense potential for Australia, but each has its own strengths, weaknesses, and suitability for different applications.

The Electric Advantage: A Familiar Friend, But One Facing Challenges

The electric economy is already gaining traction in Australia. Solar farms are sprawling across sun-drenched plains, wind turbines dance in the coastal breezes, and electric vehicles (EVs) are steadily buzzing onto city streets.

The benefits are undeniable:

• Reduced Emissions: Electricity generated from renewables boasts zero tailpipe emissions, contributing significantly to Australia's commitment to the Paris Agreement.

• Maturing Technology: Existing infrastructure for electricity generation, transmission, and distribution facilitates the integration of renewable energy sources like solar and wind.

• Cost Competitiveness: Driven by technological advancements and economies of scale, solar and wind energy are reaching grid parity in many regions, making them increasingly cost-competitive with traditional fossil fuels.

However, the electric economy also presents challenges in the context of the Australian climate:

• Intermittency and the Tyranny of the Sun: Australia's sunshine hours vary significantly across regions, and wind patterns can be unpredictable. This intermittency in renewable energy generation necessitates robust energy storage solutions, like batteries, to ensure consistent grid supply, particularly during peak demand periods or extended periods of low sunshine/wind.

• Grid Modernization for a Distributed Future: The existing grid, largely designed for centralized fossil fuel power plants, may require significant upgrades to handle the influx of distributed renewable energy sources, particularly in remote areas with sparse grid infrastructure.

• Range Anxiety for EVs in a Vast Country: While rapidly improving, EV range limitations can be a significant concern for long-distance travel in Australia, a nation with vast distances between major cities.

The Hydrogen Promise: A Clean Energy Carrier with Long-Term Potential

 Hydrogen, a clean-burning gas, emerges as another contender in the race for a sustainable energy future for Australia. Produced through electrolysis (splitting water using renewable electricity), hydrogen offers exciting possibilities:

• Long-Term Storage: Unlike batteries, hydrogen can be stored for long durations (months or even years), providing a stable energy source for times when renewable generation is low. This is particularly advantageous for regions with limited sunshine or wind during specific seasons.

• Versatile Applications: Hydrogen is not limited to transportation (fuel cell vehicles). It can be used for heating, industrial processes, and even for re-electrification back to the grid, offering a broader application spectrum than electricity alone.

• Export Potential: Australia's abundant renewable resources can be used to produce hydrogen for export, creating a new clean energy export industry, potentially capitalizing on existing infrastructure for Liquefied Natural Gas (LNG) export.

Despite its promise, the hydrogen economy faces hurdles in the Australian context:

• High Production Costs: Electrolysis technology and hydrogen infrastructure are still in their early stages, making it a relatively expensive option compared to mature electricity generation options.

• Limited Infrastructure: Currently, hydrogen infrastructure, including refueling stations for fuel cell vehicles, is scarce across Australia, hindering widespread adoption for transportation, particularly in remote regions.

• Efficiency Losses: The conversion process from electricity to hydrogen and back to electricity incurs energy losses, reducing overall efficiency. This is a critical consideration for Australia, as maximizing energy output is essential in a resource-limited continent.

Australia's Strategic Choice: A Blended Approach Tailored to the Climate

Government policies will play a crucial role in steering this blended approach.

The Australian Renewable Energy Agency (ARENA) and the Clean Energy Finance Corporation (CEFC) already provide significant funding for renewable energy projects, including both solar and wind farms. Additionally, the recent establishment of the $2 billion Hydrogen Headstart initiative in the 2023-24 Federal Budget demonstrates the government's commitment to accelerating the development of a domestic hydrogen industry. This initiative aims to support two to three large-scale green hydrogen projects, fostering innovation and cost reductions in the sector.

Australia is uniquely positioned to lead the way in both electric and hydrogen economies. Its vast solar and wind potential provides the foundation for clean electricity generation and hydrogen production. The optimal approach, however, hinges on application and the specific climate conditions of different regions:

• Electrification is a Strong Candidate For:

  • Powering homes and businesses, especially in densely populated areas with existing grid infrastructure.

  • Short-distance transportation (cars, buses) in urban and peri-urban areas.

  • Decarbonizing existing industries with electrification options, particularly those with readily available grid connections.

• Hydrogen Offers Advantages For:

  • Long-distance transport (trucks, ships, airplanes) in regions with vast distances, where EV range limitations are more pronounced.

  • Industrial processes that require high heat, particularly in remote locations where grid-based electricity may be limited or expensive.

  • Energy storage and grid balancing, especially in regions with high renewable energy penetration and significant seasonal variations in sunshine and wind patterns.

  • Exporting clean energy to other countries, potentially leveraging existing LNG infrastructure.

The Road Ahead: A Blended Approach Fuelled by Policy and Innovation

The most likely scenario for Australia's energy future is a hybrid approach, leveraging the strengths of both electricity and hydrogen. The nation can prioritize electrification for sectors where it's most effective and develop a robust hydrogen economy for long-term energy storage, decarbonizing hard-to-electrify sectors, and potentially creating a new export industry.

Collaboration between researchers, businesses, and policymakers will be essential to unlock the full potential of these clean energy solutions. Continued investment in research and development for both battery storage technology and hydrogen production methods will be crucial for improving efficiency and reducing costs. Additionally, developing a national hydrogen infrastructure network, including refuelling stations and pipelines, will be critical for widespread adoption, particularly for transportation applications.

Conclusion

Australia's transition to a clean energy future is not a matter of "either/or" but rather "and." By strategically developing both electric and hydrogen economies, Australia can harness its abundant renewable resources, decarbonize its energy sector, create jobs, and become a leader in the global clean energy race. The vast, sunburnt landscapes and powerful winds that define Australia can become the source of its clean energy revolution, powered by a blend of electrons and hydrogen.