Norway races Australia to fulfill Japan's hydrogen society dream

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By Lefteris Karagiannopoulos, Sonali Paul and Aaron Sheldric  /  Reuters, OSLO, MELBOURNE and TOKYO

Norway and Australia are racing each other to show they can supply Japan with hydrogen, hoping to fulfill its ambition to become the first nation significantly fuelled by the super-clean energy source.

While Australia has planned to derive liquid hydrogen from brown coal for some time, Norway could steal a march if a pilot project producing the fuel using “renewable” energy — a climate-friendly method more in keeping with Japan’s aims — is cheaper.

Japan is betting heavily on becoming a “hydrogen society,” despite the high costs and technical difficulties which have generally slowed its adoption as a carbon-free fuel.

Japanese Prime Minister Shinzo Abe is pushing his vision of vehicles, houses and power stations using hydrogen to end Japan’s energy crisis since the March 2011 Fukushima Dai-ichi nuclear disaster, which led to a dramatic drop in electricity production from its nuclear plants.

The country’s annual hydrogen and fuel-cell market is forecast to hit ¥1 trillion (US$9 billion) in 2030 and ¥8 trillion in 2050, according to the Japanese Ministry of Economy, Trade and Industry.

Kawasaki Heavy Industries Ltd (KHI) is developing a supply chain to back Abe’s initiative, which is to be showcased when Tokyo hosts the 2020 Olympic Games.

KHI has been looking at using brown coal from the Australian state of Victoria, where supplies are plentiful.

However, it is hedging its bets with a project in Norway to derive hydrogen using power from hydroelectric dams and eventually wind farms.

Using Australian coal requires removing its climate-changing carbon and burying it in old oil or gas wells there.

In Norway, KHI has teamed up with Nel Hydrogen AS, a maker of hydrogen plants, with backers including Japan’s Mitsubishi Corp and Norway’s Statoil ASA. The project aims to demonstrate that liquefied hydrogen (LH2) can be produced using renewables and delivered to Japan on tankers.

Nel Hydrogen market development vice president Bjorn Simonsen told reporters that the company aims to deliver liquefied hydrogen to Japan for a minimum ¥24 per normal cubic meter. A study on the scheme is due to be completed in 2019.

KHI estimates that hydrogen from Australia costs about ¥29.8 per normal cubic meter and the company plans to establish a global LH2 supply chain like that for liquefied natural gas, KHI spokesman Keisuke Murakami said by e-mail.

“If Norway commercial [production] goes rapidly it might be earlier than Australian commercial,” he said.

Both projects still have a long way to go before they could start commercial production.

Under the Australian plan, coal would be converted to gas for processing to remove sulfur, mercury and carbon dioxide, leaving hydrogen. The Norwegian system would use renewable energy for high-temperature electrolysis to split water into hydrogen and oxygen, which would be released into the atmosphere. In both cases, the hydrogen would be liquefied for shipment to Japan.

In Australia, a small demonstration ship is being built and KHI plans to build bigger tankers in the 2020s.

The firm is also seeking support from the Victorian and federal governments, Murakami said.

A hydrogen plant would “contribute to job creation and the acquisition of foreign currencies,” he said, adding that a pilot project in Australia is scheduled to start before 2020.

Victoria is looking at the project due to the decline of brown coal mining and power stations burning the polluting fuel.

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