“Is Andrew Forrest’s hydrogen dream a fantasy?”, The Fin Podcast, 1 Dec 2022, Episode 7 – Is Andrew Forrest’s hydrogen dream a fantasy? – YouTube

Market Uncertainty

• Pricing Volatility: The cost of green hydrogen production is still relatively high, largely due to the expensive nature of the electrolysis process and the infrastructure required. This cost, coupled with the nascent stage of the market, leads to significant volatility in pricing.
• Demand Projections: The demand for green hydrogen is projected to increase, especially as nations commit to decarbonization. However, the actual scale of future demand remains uncertain. It hinges on technological advancements, regulatory changes, and broader adoption in various sectors like transportation and heavy industry.
• Competitiveness with Fossil Fuels: Green hydrogen currently struggles to compete with cheaper, fossil fuel-based hydrogen (grey or blue hydrogen). The cost dynamics could shift with the introduction of carbon pricing or advancements in electrolysis technology.

Technical and Logistical Challenges

• Storage and Transportation: Hydrogen has a low density, making its storage and transportation complex. It often requires compression or liquefaction, which is energy-intensive. The development of specialized infrastructure, like ships capable of transporting hydrogen at extremely low temperatures, is critical.
• Safety Concerns: Hydrogen is highly flammable, necessitating stringent safety protocols in its handling and transportation. This adds to the complexity and cost.
• Electrolyzer Efficiency: Current electrolyzer technology, crucial for producing green hydrogen, is still evolving. Improvements in efficiency and cost are vital for making green hydrogen economically viable.

Potential for Export

• Abundant Renewable Resources: Australia’s vast landmass and favorable climate conditions (high solar irradiance and wind availability) provide an exceptional opportunity for large-scale renewable energy generation, essential for green hydrogen production.
• Geopolitical Advantage: As a politically stable country with established trade relationships, especially in the Asia-Pacific region, Australia is well-positioned to become a leading exporter of green hydrogen, catering to countries with less renewable capacity.
• Economic Diversification: Exporting green hydrogen aligns with Australia’s economic interests in diversifying its energy exports, currently dominated by coal and natural gas, and transitioning towards more sustainable sources.

Diverse Energy Strategy

• Integrated Approach: FFI’s strategy includes investments in the entire green hydrogen value chain, from renewable energy generation (solar, wind) to hydrogen production (electrolyzers) and transportation infrastructure.
• Technological Innovation: Investing in electrolyzer manufacturing and solar panel production indicates a commitment to driving down costs through technological innovation, which is crucial for making green hydrogen competitive.
• Risk Mitigation: By diversifying its portfolio, FFI is mitigating the risk inherent in the green hydrogen market. This approach allows the company to capitalize on various aspects of the renewable energy transition, not just hydrogen production.