Victorian coal to keep lights on in Japan, says Turnbull

Australia wants to be the first country in the world to export hydrogen, converted from its brown coal reserves, as an energy source.

The launch took place on one of the hottest mid-April days on record.
Photo: Justin McManus

Attendees at the launch were told hydrogen could one day provide a fifth of the world’s energy needs.

By 2030, between 10 million and 15 million cars and 500,000 trucks globally will be hydrogen-powered, according to a recent report by business consortium the Hydrogen Council.

But the viability of the coal-to-hydrogen project depends on being able to inject the associated carbon dioxide into porous rock beneath the Bass Strait seabed, to avoid emitting vast amounts of greenhouse gases into the atmosphere.

The carbon capture and storage trial is ongoing. Just two months ago, a ship ventured out to sea off Ninety Mile Beach in the hope of finding a place to sequester millions of tonnes of carbon dioxide.

Even so, the Hydrogen Energy Supply Chain pilot project was locked in on Thursday, when Mr Turnbull, Victorian Minister for Regional Development Jaala Pulford, Japanese Vice-Minister for the economy and trade Daisaku Hiraki, and others, signed a commitment to the project.

The Turnbull and Andrews governments have each committed $50 million and a Japanese consortium led by Kawasaki Heavy Industries will fund the bulk of the pilot.

Kawasaki believes there is enough brown coal in the Latrobe Valley that could be converted to hydrogen that it could power Japan for 240 years.

Masayoshi Kitamura, chairman of J-Power, a Japanese energy company, said Latrobe Valley brown coal is attractive because it is “relatively inexpensive and abundant”.

The pilot will begin with construction of a hydrogen production plant at the Loy Yang power station, just south of Traralgon.

Hydrogen gas, produced from brown coal, will be transported in pressurised tanks on semi-trailers to the Port of Hastings. It will be liquefied and shipped on a purpose-built hydrogen carrier to Japan. The pilot phase is planned to start in 2020 and for about one year.

If the technology is judged commercially viable, it is expected that the export industry will take off in the 2030s and generate about 400 local jobs.

About 700 jobs were lost in the valley when Hazelwood closed one year ago.

AGL chief executive Andy Vesey said he was “reasonably confident” the carbon capture and storage trial would succeed and ensure the viability of Victoria’s hydrogen export industry for the long term.

AGL chief executive Andy Vesey speaking to the media outside Loy Yang A after the launch.
Photo: Justin McManus

“When we look at the fuel and the resource available in this valley, the abundance of it, the cost of it, it really is something we should be optimistic about,” Mr Vesey said.

“We should always be looking for ways of sustainably using the resource that we have in an appropriate way, and this valley is blessed with these resources.”

He said the world had no choice but to stop emitting carbon dioxide into the atmosphere.

"We don't need hot days or cold days or cyclones – we know that the continued emission of a heat-trapping gas into the atmosphere can't continue indefinitely," Mr Vesey said.

Environment group Environment Victoria signalled its scepticism about the project, saying governments risked wasting $100 million of public money on a trial that had received no environmental approvals.

“Spending $500 million turning coal into hydrogen makes no sense when it can be just as easily be produced from renewable sources like wind and solar, that don’t risk doing further damage to our climate,” campaigns director Nicholas Aberle said.