MOSTAFA REZAI, ALEXANDR AKIMOV AND EWAN GRAY |
The global transition from fossil fuels to clean energy is rapidly gaining momentum, and hydrogen (H2) is emerging as a central player in this shift. As one of the most promising renewable energy carriers, hydrogen can store and transport energy over long distances, making it a vital solution for countries with limited natural energy resources. The study “Techno-economics of Renewable Hydrogen Export: A Case Study for Australia-Japan” delves into how Australia, a renewable energy-rich nation, could become a significant exporter of hydrogen to Japan, a country with high energy demand but limited renewable resources.
Australia’s abundant solar resources and established energy export infrastructure make it an ideal candidate for hydrogen production and export. This study focuses on the techno-economic feasibility of exporting hydrogen from Australia to Japan using various hydrogen carriers, including liquid hydrogen (LH2), liquid ammonia (LNH3), methanol (MeOH), and methylcyclohexane (MCH). These carriers are critical to overcoming one of the main challenges of hydrogen transport: its low volumetric density in its gaseous state (GH2). Converting GH2 into these denser, more stable forms enables more efficient large-scale, long-distance export by sea.
The study’s base year is set in 2030, with a production target of 100 tonnes per day (t/d) of hydrogen for export—providing a small-scale yet highly relevant scenario for understanding the near-future economics of hydrogen exports. Electricity for hydrogen production is generated via solar photovoltaic (PV) arrays, which power proton exchange membrane (PEM) electrolysers to produce GH2. This GH2 is then converted into the various hydrogen carriers before being shipped to Japan, where it is reconverted back into GH2 for use in energy generation or industrial processes.
Key findings
- Cost-effectiveness of hydrogen carriers: LNH3 (liquid ammonia) and MCH (methylcyclohexane) emerged as the most cost-effective hydrogen carriers in terms of landed levelised cost of hydrogen (LCOH). LH2 (liquid hydrogen), while conceptually attractive due to its simplicity (it doesn’t require conversion into another chemical form), has a higher LCOH unless boil-off gas (BOG) losses can be effectively managed.
- Economies of scale: A significant reduction in the landed cost of hydrogen is achieved by scaling up production. Increasing the production capacity tenfold, from 100 t/d to 1,000 t/d, drastically reduces the landed LCOH, making large-scale production much more economically viable. This highlights the importance of scaling up the hydrogen supply chain as quickly as possible to benefit from these economies of scale.
- Impact of the Weighted Average Cost of Capital (WACC): The study’s sensitivity analysis shows that reducing the WACC (the cost of financing) plays a critical role in decreasing the LCOH. This suggests that favourable financial conditions and investment in hydrogen infrastructure will be essential for the economic success of renewable hydrogen exports.
- Challenges with LH2: While LH2 offers the advantage of high volumetric density, it comes with substantial challenges, particularly the energy-intensive cooling required to keep hydrogen in liquid form and the BOG losses that occur at every stage of the supply chain. Without effective BOG management, LH2 remains less economically competitive compared to other hydrogen carriers like LNH3 and MCH, which are liquid under ambient conditions and do not require additional energy for storage or transport.
- Importance of optimising the supply chain: The study underscores the need to optimise every stage of the hydrogen export supply chain, from hydrogen production to storage, transport, and reconversion. This involves not only scaling up production but also ensuring the technical and economic efficiency of PEM electrolysers, which convert electricity into hydrogen, and the infrastructure used to handle the various hydrogen carriers.
Strategic importance of the Australia-Japan hydrogen trade
The partnership between Australia and Japan is strategically important for both countries. Japan, with its strong industrial base and commitment to a carbon-neutral future, is actively seeking reliable and sustainable sources of energy. Australia, with its vast solar resources and position as a global energy exporter, is perfectly positioned to meet this demand.
By focusing on hydrogen as a renewable energy carrier, Australia can strengthen its trade relationship with Japan, contributing to both nations’ decarbonisation efforts. This study provides a detailed analysis of the techno-economic factors that will shape this emerging hydrogen market and highlights the potential benefits of scaling up production and streamlining the hydrogen export supply chain.
Conclusion
This case study offers a glimpse into the future of global energy markets, where hydrogen could play a central role in replacing fossil fuels and enabling a cleaner, more sustainable energy system. For Australia, exporting renewable hydrogen represents a significant opportunity to continue its legacy as an energy powerhouse, contributing to Japan’s energy security and the broader global effort to achieve net-zero emissions. The study demonstrates that while challenges remain, particularly with regard to cost, the right combination of scale, financing, and technology could make hydrogen exports a commercially viable and environmentally impactful solution by the 2030s.
Mostafa Rezai and Ewan Gray are members of the Queensland Micro- and Nanotechnology Centre, Griffith University and Associate Professor Alexandr Akimov is a member of the Sustainable Energy Policy Cluster and Griffith Asia Institute.
This article is a synopsis of the journal article “Techno-economics of renewable hydrogen export: A case study for Australia-Japan” published in Applied Energy, volume 374.
