Hydrogen is the smallest molecule and the most common chemical element in the universe. While hydrogen is abundant, it is not freely available as a gas on Earth and needs to be extracted from water, fossil fuels or biomass.
There are three primary methods for producing hydrogen:
- Electrolysis: where renewable energy sources such as solar and wind power are used to provide the electricity required to split hydrogen from water. The product is referred to as ‘renewable hydrogen’ or ‘green hydrogen’.
- Coal gasification: where hydrogen is produced through a chemical reaction with coal and water at a high temperature.
- Steam methane reforming: where hydrogen is produced through a chemical reaction with natural gas and water at a high temperature.
The methods that use fossil fuels produce carbon emissions. However, if the carbon dioxide is captured and stored, the hydrogen is carbon neutral. Hydrogen made from fossil fuels with carbon capture and storage is often called ‘blue hydrogen’. Green and blue hydrogen are generally referred to as ‘clean hydrogen’.
Clean hydrogen can be used in a range of applications, including:
- as a replacement for petrol and diesel in transport applications
- as an input into industrial processes, including ammonia
- for injection into gas distribution networks
- as a replacement for natural gas in heating and cooking
- for on-demand electricity generation
- for overseas export.
Clean hydrogen has the potential to abate up to 24 megatonnes or 18% of NSW’s annual emissions across the energy, transport and industrial sectors.
A mature hydrogen industry can help decarbonise the NSW economy, provide energy storage, support jobs and exports and improve the state’s energy security.
Hydrogen industry and export potentials will be realised by low-cost and reliable electricity from renewable energy sources, such as wind and solar. NSW has abundant renewable energy sources and investment in renewable energy is thriving. As at February 2021, there are around 22,000 megawatts of renewable energy projects progressing through the NSW planning system.
To support these projects, NSW has implemented policies which provide a coordinated framework for a modern electricity system for NSW and will play an important role in growing the clean hydrogen economy.
Policies relating to hydrogen include, but are not limited to:
- The Net Zero Plan Stage 1: 2020-2030: the third priority area of the plan is investment in the next wave of emissions reduction innovation, including hydrogen technologies. Under the Net Zero Plan, the Government also announced a target of up to 10% hydrogen in the gas network by 2030.
- The Electricity Infrastructure Investment Bill 2020: passed in December 2020, which commits the State to at least $50 million spent to develop the green hydrogen sector from 2021 to 2030. This will include support for the production, supply, use and export of hydrogen energy produced from renewable energy sources.
- The Net Zero Industry and Innovation Program: announced in March 2021, to deliver low emissions products, technologies and services to help accelerate and pave the way to a net zero emissions future for NSW. It is expected that the program will contribute at least $70 million to support the establishment of hydrogen hubs in the Hunter and Illawarra regions. However, hydrogen projects and technologies may be eligible for support across all three areas.
If you have any queries about hydrogen or any information on this page, please get in touch by sending an email to hydrogen [at] planning.nsw.gov.au.