It is going to be a challenging task for the Australian economy and the transport industry but, developing a hydrogen refuelling station infrastructure is going to be vital.
“You can be forgiven for not knowing who Lochard Energy is, because we are a silent achiever,” said Bart Simes, General Manager Energy Development at Lochard Energy, at the Victorian Transport Association Alternative Fuel Summit.
“Lochard Energy is a very important player in the energy space in Australia, particularly in Victoria. Our major asset is the Iona underground gas storage and processing facility down in Port Campbell (200km SW of Melbourne) and plays a very important role in our market.
“What it essentially does is smooth out the gas market for gas participants in the natural gas space. Without Iona, the volatility of the wholesale gas market would be extreme and the implications for our customers and consumers would be very extreme. So this asset is very very important in hedging the wholesale markets in Victoria, in South Australia and New South Wales as well.”
When gas demand is low in summer the facility is filled with gas, which then is released during the high demand season as the weather gets colder and houses turn to gas for heating. The storage facility also supplies the gas fired power generation in Victoria, when electricity supply from other sources is unable to meet demand.
“What we’re doing now is taking those skills that are associated with natural gas and starting to think about how we redeploy them into the brave new world that is decarbonisation,” said Bart. “That’s how we got into the hydrogen refuelling business, we’re transposing our skills. We are also about reducing volatility, as this is fundamentally important.
“It’s going to become increasingly important in the sector as time goes on, because the more people move away from liquid fuel and its associated infrastructure, the more it moves towards the electricity market, and the electricity market is extraordinarily volatile, way more than the natural gas market, which is more volatile than the diesel market.
“So you need to come up with analysis and business models that hedge that risk effectively for the customer, at Iona our customers tend to be blue chip customers like AGL, Origin and Snowy Hydro, incumbents that have very significant energy loads and need to manage that risk accordingly.”
Lochard taking the current business models and starting to think about how the operation can help new customers as they move towards decarbonisation. Bart’s team comes largely from the power generation sector, across solar, energy storage and gas fired power generation. The plan is to create a new infrastructure for the transport sector.
Hydrogen can come from various sources. Grey hydrogen and blue hydrogen both derive from natural gas, and do nothing to decarbonise the environment. It is still a fuel that is coming from a fossil fuel.
“Given the urgency of climate change and the urgency to start adopting new ways and new technologies, Lochard is focusing on renewable hydrogen,” said Bart. “This is using renewable electricity, whether that be wind or solar, and then processing water to get the hydrogen. I will talk you through the sequence of how the project works.
“We start off with renewable energy, renewable electricity, the project has an on-site solar farm, but that’s insufficient for its needs. It also takes power from the electricity grid, and that we hedge with renewable energy contracts. So the the entire electricity draw is green. You also need a water supply and you want to do something that’s sustainable. So, we’re talking to the local water authority about using their recycled water. It’s a problem for them, and we’re taking that problem off their hands, and then splitting their water with our electricity in the process of electrolysis.
“We now have the hydrogen, we can vent the oxygen into the atmosphere with no problems whatsoever. We now have the hydrogen The question is what to do with it, what pressuring do we want, do we want to liquid? The hydrogen has to be in some form or another to be available for vehicles and available at the site itself, so you’re effectively buying wholesale, or it can be transported to another location.”
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