In the years to come, hydrogen will play an essential role in the energy transition. 

The manufacturing and mining industries consume almost a third of all energy across Australia¹ and many of those energy users require zero-carbon gaseous molecules to decarbonise. 

At APA, through our Pathfinder program we are proactively investigating future energy technologies that will help our customers decarbonise their operations.  

Hydrogen is a particular focus area as we work towards developing customer-led solutions to support a lower carbon future.

Hydrogen: more than just an energy carrier 

Hydrogen is more than just an energy carrier that can be used to store, move and deliver energy from other sources. It's a critical manufacturing feedstock for products essential to modern life, such as agricultural fertilisers and cleaning products.  

Hence, as Australia strives to reduce its carbon emissions, hydrogen stands both as a cornerstone for decarbonising existing industries and catalysing the growth of new industries, such as sustainable fuels and green steel manufacturing. 

Electrolysis – using electricity to split water molecules into hydrogen and oxygen – is one sustainable pathway for producing emissions-free hydrogen. Although the exact growth trajectory of this technology is not yet clear, we expect electrolysis powered by wind and solar electricity to thrive as we transition to a lower carbon world. 

As the Australian Government works with industry to spur the development of a renewable hydrogen industry through its Future Made in Australia policy, it is critical to consider how hydrogen is produced and delivered to demand centres to support emissions reduction.

Our Pathfinder Program: charting the course for hydrogen  

Through our Pathfinder program, APA has conducted detailed analyses on the hydrogen value chain, from production through to end-use.  

We have extensively compared both pipelines and powerlines for linking inland solar and wind generation sites to coastal industrial demand centres. We used a series of project concepts as the foundation for our analysis based on proposed hydrogen and ammonia projects across the country.

Our study found pipelines to be a cost-effective solution for transporting large quantities of energy (in the form of molecules) over long distances. This aligned with findings from the recent Net Zero Australia study, where hydrogen pipelines were the favoured mode of energy transport for hydrogen applications².

Pipelines are unique in terms of enabling both storage and transmission of molecules, thereby providing a buffer that can help balance supply and demand. Moreover, pipelines are typically buried underground in a cost-effective and safe manner, minimising the impact on landscapes and communities.

Pipeline conversions can also be a transmission solution for future hydrogen projects. APA’s landmark Pathfinder project, the Parmelia Gas Pipeline (PGP) Conversion Project, is seeking to enable the conversion of around 43-kilometres of the PGP in WA into Australia's first 100 per cent hydrogen-ready transmission pipeline at a significant cost and schedule advantage versus greenfield developments.

Our analysis assumed construction of new hydrogen pipelines, also incorporating the use of desalinated water for hydrogen production with the incremental costs associated with transporting water inland for the pipeline scenarios where hydrogen production was situated at renewable energy generation sites.

One factor contributing to the higher cost of powerlines in these scenarios was the need to transmit materially more energy to the end user compared to shipping hydrogen using pipelines. Electrolysis entails significant energy loss and powerlines must be sized to account for these loses if electricity is transmitted for onsite hydrogen production. This impact on electrical transmission requirements is typically of greater cost than transporting desalinated water inland, although geography and distance influence the cost inflection points.

But using long-distance powerlines in hydrogen projects does have its merits. Electricity demand is more widespread than hydrogen, allowing common infrastructure to serve multiple end-uses, thus reducing costs through economies of scale.

Additionally, most industrial facilities requiring hydrogen as a chemical feedstock also require heat and electricity to run their operations, and direct electrification via powerlines is generally more energy-efficient, where technically feasible.  

Overall, our analysis confirmed that hydrogen projects don’t have a one-size-fits-all transmission solution. The optimal choice between transporting electrons and molecules depends on multiple factors, such as distance, the scale of hydrogen production, potential for sharing of common infrastructure, and the specific end-user requirements. A multifaceted approach ensures that transmission infrastructure is tailored to maximise value for all stakeholders.

The road ahead 

As the hydrogen industry develops, it is crucial we remain flexible and leverage all available solutions. Both pipelines transporting hydrogen and powerlines carrying renewable electricity will play a role in shaping Australia’s future energy landscape.  

APA sees near-term opportunities for accelerating the delivery of electricity transmission infrastructure for renewable energy zones. With planning foresight, common use electricity transmission can enable the decarbonisation of multiple sectors and spur future developments in clean hydrogen.  

APA’s extensive experience in developing, owning, and operating both these asset classes gives us deep insights for developing infrastructure for the emerging clean hydrogen sector. Through early engagement with stakeholders, we can support project scoping and appraisal, selecting the most optimal solution for transmitting renewable energy from generation sites to demand centres.  

We are technology agnostic when it comes to energy infrastructure, and we believe a diverse energy infrastructure portfolio, including both pipelines and powerlines, is critical to supporting the decarbonisation of Australia’s economy.

Source:

¹ Commonwealth Government, Australian Energy Update 2023, September 2023

² https://www.netzeroaustralia.net.au/wp-content/uploads/2023/04/Net-Zero-Australia-final-results-full-results-pack-19-April-23.pdf