Industry Issues

What is Going to Happen in the 2030s

What is Going to Happen in the 2030s

A hydrogen refuelling project, being developed by Lochard Energy, is a kind of test bed for what is going to happen in the 2030s. It is a long process to develop this sort of infrastructure.

Building the initial project will be a good learning curve for Lochard, going forward. Having gone through the process, the company can then plan for a roll out of hydrogen infrastructure in the 2030s.

The end game is to be able to build a facility providing bulk renewable hydrogen, that can either be purchased directly from the site to minimise its handling and, therefore, costs. It can also be loaded onto a truck, in either gaseous or liquid form and delivered down the road.

The initial project on the shoulder of the Hume Highway, near the Winton Raceway, 230km north of Melbourne and 230km south of the Tarcutta trailer exchange. It’s location is not an accident. When researching possible sites, Lochard were triangulating a multitude of important KPIs, in finding a site and that has good access to renewable energy, keeping the costs as low as possible. It also needs access to sustainable water and access for trucks.

The company is currently going through the planning process, firstly for the solar farm and access to the grid network. This first site planning application will be a significant learning curve, as the team looks forward to later projects.

It is projected to be able to create 12 tonnes of hydrogen a day and store an extra amount, as well. It will be permitted for either liquid hydrogen, gaseous hydrogen, or both. It will need to offer flexibility to the market, because at the moment it is difficult to know exactly what technology will be needed when the demand for hydrogen ramps up.

Image: Prime Creative Media

Reducing Volatility

“We’ve seen, over the last few years, the volatility of the diesel market and the pain that it has inflicted on transport operators,” said Bart Simes, General Manager Energy Development at Lochard Energy, at the Victorian Transport Association Alternative Fuel Summit.. “But, I have to emphasise how much more significant it will be when we start to move into the electricity market. Most importantly, the electricity wholesale market ranges annually, on average, around between about $50 a megawatt hour $150 depending on how the markets behaving.

“We’re trying to design facilities here, like the Iona facility, that offer a hedge to the customers and offer them something that they can get involved in. Get involved in and partner with Lochard Energy to get safe reliable and cost effective access to hydrogen moving forward.

“We need to emphasise the importance of having a partner and for our customers to come on the journey with us, because it is very expensive. It is very time consuming and ultimately we are trying to design a product to meet people’s needs, if we get that wrong, then we all fail.

“We started looking for this site back in 2020, it takes a long time to negotiate with landholders and find the sort of sites that necessary to close those deals. You then move on to immediate community and stakeholder engagement, and that process never ends.”

The project is sited on 430 acres mind you, because most of it is a solar farm. If all goes well the process of planning and building takes 18 months, however getting approvals through can be fraught with delays and issues.

This initial project well enable Lochard to scope out the issues involved and the viability of future developments. Bart expects the final investment decision on this sort of infrastructure to be made by 2027.

“You can see how long it takes to go from concept to final investment decision on a piece of infrastructure in the modern world that only satisfies 150 articulated trucks,” said Bart. “It is a monumental challenge that we will face. It then takes you about a year and a half to build it. So that means that roughly by 2028 or thereabouts, this sort of facility will be commercially operated.

“The timing of this aligns very nicely. If you speak to the large vehicle manufacturers, the OEMs recognise that a 2028 commercial operation aligns with scores of these zero emission trucks coming into the country.

“When you think about trying to take this project and start to apply it to a more meaningful scale, our investors and most other investors who’ve got their head screwed on, will not embark on deeper tranches of spending until they have de-risked their own understanding of things and started to move forward with initial planning.”

As knowledge about engineering and procurement increases and there are trucks on order which will need to refuel, confidence should increase and developers can start to think about a much larger scale facility. The next stage would be to go to a 500 trucks a day facility, designers will need to start talking wind farms and solar farms, major hydrogen production refuelling stations.

“The problem is significant, because that 500 trucks a day is still a drop in the ocean,” said Bart. “If you look at the pollution caused by the heavy transport sector as of today it’s about four per cent of Australia’s emissions, but in order to address this with a combination of battery electric and alternative fuels, we need to install as much renewable energy as we’ve done in the last 25 years in Australia, this is a serious, serious challenge.”

 

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