Colin Packham, Australian Financial Review
Natural hydrogen could play an immediate and vital role in Australia’s energy grid, Gold Hydrogen chairman Alexander Downer said on the eve of the company’s listing.
The future of hydrogen as an energy source is a hotly contested. While some see it as a viable alternative to fossil fuels, others say that to produce it in significant volumes would require either vast sources of renewable energy, or viable carbon capture to mitigate the use of gas needed to produce it.
Gold Hydrogen is hoping it can fill the void. It has an exploration licence, covering nearly 8000 square kilometres on the Yorke Peninsula and Kangaroo Island in South Australia, and it hopes to prove the historic occurrence of natural hydrogen of up to 89 per cent purity.
To proceed to drilling, Gold Hydrogen has raised $20 million during its public offer, issuing 40 million shares at 50 cents each, but it had to overcome some unfamiliarity from investors. Shares begin trading on Friday.
Mr Downer, the former foreign minister, said the listing, however, demonstrates market excitement about the project.
“Natural hydrogen, if successful, will be substantially cheaper than green hydrogen,” Mr Downer told The Australian Financial Review.
Green hydrogen is created when renewable energy is used to power electrolysers that split water into hydrogen and oxygen. It is free of emissions but requires significant energy generation.
Blue hydrogen is the use of gas to power the splitting of water, which is typically much cheaper than using renewables. The fossil fuel industry argues that this type of hydrogen production offers the fastest route to commercialisation, though environmentalists argue it adds to Australian emissions.
Blue hydrogen had been in favour with the former Morrison government, but the election of Labor in May has led to a series of new green hydrogen project announcements. Only one so far has reached a final investment decision, signalling the difficulties and length of time required in bringing proposals to reality.
Gold Hydrogen hopes to fill that void, harnessing cheap, naturally occurring hydrogen that therefore has no environmental impact. Stage one drilling program was pegged to start in the third quarter of this year on the Yorke Peninsula in South Australia.
Mr Downer said Gold Hydrogen will only know the extent of supplies of natural hydrogen once it begins drilling, but it is optimistic.
“We won’t know until all the survey and exploration work has been completed, but we believe there is a very large amount of natural hydrogen there,” said Mr Downer.
“It is very speculative number, but we are talking about around 1.3 billion kilograms of natural hydrogen,”
Gold Hydrogen is seeking seven more tenements in SA covering another 67,512 square kilometres beyond its flagship Ramsay Project,
The development of a natural hydrogen industry would be a boost to South Australian Premier Peter Malinauskas and his plan to spend nearly $600 million to build a government-owned hydrogen plant.
It would hasten Australia’s transition to hydrogen. Many expect hydrogen as a fuel source to grow, but it could take decades before it reaches large-scale commercialisation.
Still, Andrew Forrest, the executive chairman of Fortescue Metals Group, is moving aggressively into the market. Fortescue is building an electrolyser in Gladstone, Queensland, which will be able to produce more than 200,000 tonnes of hydrogen a year, according to the company, and more than double global production of the gas.
But some renewable energy advocates, including Saul Griffith, founder and chief scientist at Otherlab, argue that hydrogen is not safe and too expensive.