Marc Daalder
Marc Daalder is a Wellington-based senior political reporter covering Covid-19, climate change, energy, primary industry, technology and the far right. Twitter: @marcdaalder.
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Energy
The country’s environmental watchdog says going all in on hydrogen could be a costly mistake that makes it harder for us to achieve our climate goals
Parliamentary Environment Commissioner Simon Upton has written to ministers to warn them to do their due diligence before engaging in a green hydrogen production industry in New Zealand.
The letter, which was released to the public on Monday, March 11, raised concerns that hydrogen production could consume limited renewable energy resources, slowing the country’s decarbonisation to critical points. Most of the hydrogen produced in New Zealand would be for export, which means we would be helping other countries with their own energy transitions while jeopardizing our own decarbonisation plans and energy security.
Energy Minister Megan Woods, one of the recipients of the Missive, told the newsroom that the government will address these issues when formulating its national energy strategy. This is due to the emission reduction plan being unveiled in May.
“We are pursuing the 2019 A Vision for Hydrogen in New Zealand with further work to discover the problems that need to be solved for the use of hydrogen in the New Zealand economy, and what steps need to be taken to solve them and when Woods said.
Read more: Climate editor David Williams dives deep into green hydrogen
In his letter, Upton wrote that green hydrogen could help reduce emissions in a limited number of sectors – mainly heavy freight, aerospace and heat-hogging industries such as steel manufacturing. “However, producing green hydrogen in New Zealand would have cost an opportunity because there are potentially more economically efficient and environmentally friendly uses for this renewable electricity.
Green hydrogen is significantly less energy efficient than electrification. The analysis of the European climate group Transport & Environment found that renewable electricity loses about 5 percent of its energy between it is generated and when it reaches its final consumption. Green hydrogen, which is produced from renewable electricity by a process called electrolysis, loses 39 percent of its energy when it is put into a fuel cell.
Fuel cell vehicles are also less efficient than EVs, so electric cars are 2.5 times more efficient than fuel cells overall.
Therefore, Upton wrote, even domestic consumption of green hydrogen is unlikely to be the most efficient use of available renewable electricity in the country. But household consumption alone will not make hydrogen financially viable.
“Green hydrogen production remains commercially unproven in New Zealand. While some governments around the world are actively exploring hydrogen as a potential energy carrier for the future, there is not yet a competitive global energy market for green hydrogen.”
Other countries with more renewable electricity resources and lower electricity prices could be better placed to produce hydrogen competitively. The government could try to subsidize the industry to make it competitive.
“The government should be particularly careful about subsidizing the creation of a green hydrogen production industry. While the subsidy is sometimes a sensible way to bring about technological change, the potential environmental consequences must be fully understood in advance – in this case, the likely “Emission road is caused by all the new road dependencies that can be created,” Upton wrote.
Woods told Newsroom that large-scale hydrogen projects would only continue if they made financial sense.
“To date, the government has invested more than $ 60 million in funding for hydrogen projects through the Provincial Growth Fund, the COVID Response and Recovery Fund, MBIE’s Endeavor Fund, MBIE’s Strategic Science Investment Fund and EECA’s Low Emission Transport Fund. note that large scale green hydrogen projects announced in New Zealand are private industry commercial ventures and would only emerge if they make commercial or business sense for investors.
Upton said he wants to see a “whole energy system analysis” so the opportunity cost of green hydrogen can be estimated and compared with alternative options. Technologies and ways to achieve. To achieve profound reductions in carbon dioxide emissions along with the social, economic and ecological implications of these ways. “
In the end, Upton is most concerned that hydrogen could consume enough of New Zealand’s renewable electricity so that we have to put off house decarbonisation efforts.
“While it can be argued that the export of green hydrogen will reduce emissions elsewhere in the world, it is reasonable to ask whether New Zealand should facilitate the transitions of other countries, if it is still unclear whether New Zealand at all its own emissions budgets. ” he wrote.
“There is a finite amount of renewable generation capacity that could be deployed in the coming decades. In my opinion, it would be best used to decarbonise New Zealand’s domestic economy. It would also improve energy security – something that current events have highlighted. . “
Woods said she appreciated Upton’s letter but that the government was still interested in hydrogen.
“Our government sees a real potential for decarbonising hydrogen in our energy system and for parts of our economy, be it for intensive and long-distance transport, or for process heat in the iron and steel sectors, where it is currently difficult to significantly reduce emissions. , “sot si.
“Hydrogen also has the potential to increase flexibility in power systems, and this is being explored as a comparative technology in the NZ Battery Project, which looks at how to solve our dry hydrological year problem. There is likely to be a growing market for hydrogen, especially in Asia. Pacific Region. “
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