Hydrogren implossion

Someone should tell the Energy Minister that the green dream is over

Energy Minister Chris Bowen did his best to dismiss the implosion of Andrew Forrest's green hydrogen plans as no big deal this week.

Forrest's Fortescue Metals told investors on Wednesday that its target of 15 million tonnes of production capacity had been kicked road from 2030 to "eventually", a destination one stop short of Never Never Land. In the meantime, Fortescue will concentrate on what it does best: digging stuff out of the ground instead of building castles in the air.

Bowen, however, remains wedded to his plan to ramp up green hydrogen production as the centrepiece of his plan of turning Australia into a renewable energy superpower. On Friday he claimed Fortescue had merely "de-prioritised" green hydrogen, and boasted that there was $200 billion of investment attached to hundreds of other projects "in the pipeline".

In the pipeline is renewable energy speak for "the cheque is in the mail". Forrest is hardly alone in dragging his heals as a survey by Boston Consulting discovered last September.

BCG’s survey found that 824 green hydrogen projects with a theoretical capacity of 21 million tonnes a year were in the pipeline in North America and Europe, that is to say they had been announced. However, only 2 percent of the announced capacity had been committed and moved to the planning stage.  Just 0.2 percent, or a miserly 51,000 tonnes, had been completed.

Global energy companies are rethinking the wisdom of pumping billions of dollars of capital into an unproven technology with uncertain timing and no guaranteed rate of return.

Stakraft, the Norwegian hydroelectricity giant, rolled back its plans last month. "We have definitely underestimated the challenges," a company spokesman said. "Developing green hydrogen has become much more expensive than we expected."

Earlier this year, French energy giant Engie dropped plans to build a green hydrogen plant in Portugal. This month, the European Court of Auditors criticised the European Union's 2030 green hydrogen production target of 10 million tonnes as "over-ambitious," saying that it was unlikely to be met and, therefore, shouldn't be included in carbon reduction calculations.

The green hydrogen fantasy has run its natural course, as I’ve been writing for some time.

I’ll have more to say on this topic in my column for The Australian tomorrow, including a delicious reprise of Forrest’s naïve expectations for the “miracle molecule” in speech to the National Press Club in 2021.

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