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Quick guide: What is green hydrogen? Will we be using it soon?

Wind farms at sunset

Green hydrogen is a growing industry, with billions of dollars of investment in what has been described as a “fuel of the future”. But as the clean energy transition continues around the world, where does green hydrogen fit into the picture?

Key points:

  • Green hydrogen could be used for powering your car
  • Its cost is expected to drop in the future
  • As it’s made safer it should be more available

What is green hydrogen?

Green hydrogen, as its name implies, is hydrogen made without the use of fossil fuels. The process involves splitting hydrogen from water by electrolysis.

A range of potential uses exist for green hydrogen, which are currently being investigated. These include replacing high-carbon fuels in the transport, heating and natural gas industries. 

New South Wales has recently unveiled an $80 billion green hydrogen plan that will see the government look to encourage investment in the sector as the state aims to become a “renewable energy super power”. As part of the plan, the state government will look to have 10,000 hydrogen vehicles on the road by 2030, including 20% of the NSW heavy vehicle fleet. 

Why hasn’t green hydrogen been used before?

Traditionally, green hydrogen has cost around twice as much to produce as conventional or blue hydrogen. That price is forecast to drop by 70% by 2030, making it comparable to other fuel sources.

Aside from its cost, hydrogen has also had its disadvantages in the past. Hydrogen can be difficult to transport, it has been known to make metal brittle and it is 20 times more explosive than petrol.

Increased investment into green hydrogen looks to increase the safety and affordability of the fuel, while making it more readily available.

What will green hydrogen replace?

Firstly, green hydrogen presents an opportunity for Australia to export it to nations without access to cheap renewable energy. In these instances, green hydrogen can provide clean energy sources to areas that may not already have access to it.

In terms of what it can replace in usage, green hydrogen can be used instead of fossil fuels as a cleaner power source. It can be burnt to produce heat, or fed into a fuel cell to create electricity. 

If green hydrogen becomes cheaper and more readily available, as is the plan in NSW, it can establish itself as an integral part of the renewable energy mix.

Where does green hydrogen fit with other renewables?

Solar, wind and hydro are the big three energy sources when it comes to renewable power, while coal still dominates as Australia’s primary energy source. 

Renewables combined to contribute 24% of Australia’s power generation in the 2020 calendar year, an increase of 3% on the year prior, but there’s still a long way to go for Aussies to cut emissions down to acceptable levels. 

Green hydrogen has the potential to become another part of the renewable energy mix, replacing some carbon-heavy fuels and helping reduce emissions around the country. 

While it won’t completely replace fossil fuels, nor will it make other renewable sources redundant, investment firm Goldman Sachs predicts that by the year 25 green hydrogen could provide up to 25% of the world’s energy needs. 

NSW leads on going green 

There’s a lot of work to do in terms of infrastructure and making green hydrogen cheaper to produce before numbers like that could become anywhere close to a reality, but there’s certainly a lot of interest and belief in the power source. 

NSW is leading the way in Australia, with over $3 billion in incentives offered in the hopes that $80 billion of investment in the green hydrogen sector will be attracted to the state. 

Whether the rest of Australia will come on board is yet to be seen, but with NSW setting ambitious goals to get green hydrogen into homes and vehicles by 2030, there’s sure to be plenty of development in the industry in the near future. 

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Cooper Langby
Cooper Langby
Money writer

Cooper writes across all aspects of personal finance here at Mozo. With a double degree in Journalism and Communications & Media from the University of Wollongong, Cooper has previously written sports content for the Fansided network. He is now turning his focus to finances and is always looking for new ways to educate himself and our readers on the best ways to save money, and budget effectively.