What is the HESC Project?
The Australian, Victorian and Japanese Governments are jointly working with reputable and highly experienced industry partners on this initiative.
The HESC Project will begin with a pilot phase, aiming to demonstrate a hydrogen supply chain that includes production, transportation and storage, with the ultimate goal of a commercial-scale phase in the 2030s.
Key elements of the pilot supply chain include:
- A newly constructed hydrogen production plant, located at AGL’s Loy Yang Complex in the Latrobe Valley, will produce hydrogen gas using existing technologies adapted specifically for Victorian brown coal
- The hydrogen gas will be transported by road to a liquefaction and loading terminal at Bluescope’s existing site at the Port of Hastings
- The hydrogen gas will be liquefied at the Port of Hastings then shipped to Kobe, in Japan, by a marine carrier specifically developed for the task.
What’s the project timeline?
Construction for the pilot phase will begin in 2019, following planning approvals. The pilot phase is expected to operate for roughly one year from 2020 to 2021.
If the pilot is successful, the Project Partners will move towards commercial scale operations and a multi-billion dollar commercial phase. The decision to proceed to a commercial phase will be made in the 2020s with operations targeted in the 2030s, depending on the successful completion of the pilot phase, regulatory approvals, social licence to operate and hydrogen demand.
What are the main uses for hydrogen energy?
Uses of hydrogen energy include:
- Mobility: including hydrogen-powered cars, buses, trains, trucks, ships, and industrial vehicles such as forklifts
- Stationary fuel cells: Stationary fuel cells operate like large-scale portable batteries and can be used to power or heat homes. They can be replaced or topped up as required
- Power generation: Hydrogen is anticipated to be used for power generation on a large scale. In Japan, hydrogen power generation is expected to enable lower dependency on nuclear and a potential replacement of oil-fired power generation.
Is hydrogen safe?
Measures will be put in place along all stages of the supply chain to prevent, detect and mitigate the risk of hydrogen leaks. These will be in accordance with government standards for portable gases and fuels.
Additional measures will be used to safely store liquid hydrogen, which must be kept at extremely low temperatures, including the development of purpose-built ships for overseas transport.
The liquid hydrogen storage containers are very solid, safe and, similarly to other specialised containers, are manufactured to comply with strict industry standards. They are double-walled and vacuum sealed. They are also designed to release the hydrogen as a gas in the unlikely event that the outer or the inner wall is breached.
The HESC Project Partners have a wealth of experience in the safe handling of hydrogen gained since the 1970s. They have developed world’s best practice health and safety procedures that will be followed carefully in all Australian operations. In Japan, they already operate many hydrogen facilities and refuelling stations.
How will the pilot phase work?
Hydrogen production will be undertaken at a pilot facility, proposed to be built at AGL’s Loy Yang Complex to enable easy access to brown coal.
The hydrogen gas will then be transported by road to a second pilot facility at Bluescope’s existing site at the Port of Hastings where it will be liquefied and loaded onto a purpose-built marine carrier before being transported to Japan by sea.
The pilot phase will run for about 12 months. After this time, the Project Partners will use the results of the trial to assess whether it will be possible to ‘scale up’ operations to transport larger quantities of liquefied hydrogen on a commercial scale.
What will happen once the pilot phase is complete?
Will there be opportunities for local businesses?
Who is delivering the HESC Project?
The Japanese portion is coordinated by HySTRA (the Japanese Consortium).
Given the potential for this project to create a new industry in Victoria, the Victorian and Australian Governments, along with the Japanese Government and industry Project Partners, are investing in the pilot phase.
Why invest in hydrogen?
Hydrogen has been identified as the clean energy and commodity of the future to help address the need to diversify energy mix and reduce carbon emissions. It is seen as a credible solution to the world’s energy and climate change problems. As a result, global demand for hydrogen will grow exponentially and the hydrogen market is expected to be worth US$2.5 trillion by 2050 due to its versatility in power generation, storage and zero emission fuel-cell vehicles.
Japan is investing heavily to leverage hydrogen to diversify its energy mix and reduce CO2 emissions. The Japanese Government has established a detailed policy roadmap which seeks to dramatically increase the use of hydrogen by around 2030 and beyond.
Given there are very few domestic sources of hydrogen in Japan, Japan is seeking to work with other countries, primarily Australia, to explore ways to produce and import the commodity. Australia could be the first country to create a thriving hydrogen export industry with huge local economic benefits.
Many other countries around the world are investing in developing a domestic hydrogen market, including South Korea, China, Germany, France, the United Kingdom and the United States.
How do you produce hydrogen?
Hydrogen production from coal is achieved through gasification. Coal gasification works by first reacting coal with oxygen and steam under high pressures and temperatures to form synthesis gas. Synthesis gas is a mixture consisting primarily of carbon monoxide (CO) and hydrogen (H2). The synthesis gas is cleaned of impurities, and the carbon monoxide in the gas mixture is reacted with steam to produce additional hydrogen and carbon dioxide. Hydrogen is removed by a separation system. The highly concentrated CO2 can be separated and captured using CCS technology.
Hydrogen from renewables can be produced in several ways, including production from electrolysis, biomass conversion, and solar conversion. Hydrogen production from electrolysis is achieved by splitting water into hydrogen and oxygen using electricity from renewable sources.
Hydrogen production from biomass conversion is accomplished via either thermochemical or biochemical conversion to other products that can then be separated or reformed to hydrogen, or fermentation techniques that produce hydrogen directly.
Hydrogen production from solar conversion uses either thermolysis (splitting water at very high temperatures), with solar-generated heat for high temperature chemical cycle hydrogen production, or photolysis in which solar photons are used in biological or electrochemical systems to produce hydrogen directly.
 IEA, Hydrogen technology Roadmap, 2015, page 42
What will the hydrogen from the pilot be used for?
Only a very small quantity (one to three tonnes) of hydrogen will be produced during the pilot phase. This will be used for demonstration purposes only.
What is the cost of the pilot phase?
The Australian portion of the investment will be spent in Victoria where the Pilot Project is expected to create many jobs during its planning, construction and one year of operation.
Will the pilot plant produce CO2?
As the amount of hydrogen being produced for the pilot is very small (one to three tonnes) the amount of CO2 is expected to be 100 tonnes. This is equivalent to the annual output of approximately 20 cars.
Where will the plant be located?
Have you proved the technology will work?
What is the lifespan of the plant?
How much hydrogen gas will the plant produce?
How much electricity will the plant use?
* The Office of the Chief Economist Australian Energy Update 2016 states that the average Australian home uses 50 gigajoules of energy (13.8889 MWh) per year.
Will you be doing any road works?
How much equipment will be contracted or purchased locally?
Will there be construction jobs for local people?
The pilot will create immediate jobs for the Latrobe Valley and surrounding areas.
How will the hydrogen gas be stored and transported?
How big will the plant be?
What are the expected traffic impacts?
Will there be any waste as a result of the coal-hydrogen gasification process?
When will you be starting work?
What are the working hours during the construction period?
Will there be people coming here to work from outside the Latrobe Valley?
When will you be ready to hire local staff and contractors?
Why was the BlueScope land at the Port of Hastings chosen as a location to process hydrogen?
While the proposed Hastings site for this project is on existing industrial land, it is nearby to a number of local communities and sites of environmental significance. Development of the Hastings component of the HESC pilot phase will be undertaken with careful consideration of both residential and environmental impacts.
The pilot plant hydrogen liquefaction and loading operations do not require any dredging, or any works on water. The existing berth at BlueScope is suitable to allow safe ship loading of liquid hydrogen. The liquefaction facility will be constructed on existing industrial land owned by BlueScope, leased to the Project.
Where will HESC be located in the Port of Hastings?
Will the project require dredging of Western Port?
Are there plans to process coal at Western Port?
How will HESC manage the impacts of ballast water?
However, if ballast water does need to be discharged at Hastings, a water treatment facility will be installed on the ship to ensure ballast water is treated prior to being released. This would prevent the spread of foreign marine species to the Port of Hastings.
Have you proved the liquefaction technology will work?
Why are you liquefying the hydrogen here rather than in Japan?
How much liquefied hydrogen will the facility produce?
How many trips will the marine carrier make between Australia and Japan?
How will the marine carrier store the liquefied hydrogen?
One of the key elements of transporting liquefied hydrogen is preventing heat from turning the liquid hydrogen back into a gas. This is known as ‘boil off’. A specialised insulation technology will be used to respond to this challenge.