Assessment for Suitability of Communities for Conversion to Hydrogen
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Hydrogen Communities Assessment for suitability of communities for conversion to hydrogen June 2019 KPMG.com.au Contents Executive Summary 1 Case Studies and Lessons Learnt 9 2.1 H21 Leeds City Gate ................................................................................................... 13 2.2 Liverpool-Manchester Hydrogen Cluster ..................................................................... 15 2.3 HyDeploy ..................................................................................................................... 17 2.4 ENE-Farm ..................................................................................................................... 18 2.5 California Fuel Cell Partnership .................................................................................... 19 2.6 H2 Mobility ................................................................................................................... 20 2.7 Scandinavia Hydrogen Highway Partnership ............................................................... 21 2.8 Clean Energy Innovation Hub ...................................................................................... 22 2.9 Western Sydney Green Gas Project ............................................................................ 23 2.10 Hydrogen Park South Australia .................................................................................... 24 2.11 Hydrogen Energy Supply Chain (HESC) Project* ........................................................ 25 2.12 Toyota Ecopark Hydrogen Demonstration .................................................................. 26 H2City Tool Approach 27 3.1 Pathway scenarios ....................................................................................................... 28 3.2 Hydrogen Pathway Value Chain .................................................................................. 29 3.3 Electrification Pathway Value Chain ............................................................................ 30 3.4 Tool’s approach to value chain .................................................................................... 31 3.5 Tool’s modes ............................................................................................................... 32 H2City Tool Assessment Criteria 33 4.1 Introduction .................................................................................................................. 35 4.2 Hydrogen demand ....................................................................................................... 37 4.3 Hydrogen production ................................................................................................... 41 4.4 Storage and transport (of hydrogen) ............................................................................ 46 4.5 Local infrastructure upgrades ...................................................................................... 49 4.6 End use ........................................................................................................................ 52 4.7 Regulatory policy and legislation ................................................................................. 53 4.8 Climate policy .............................................................................................................. 56 4.9 Social benefits ............................................................................................................. 57 Electrification Pathway 58 5.1 Introduction .................................................................................................................. 59 5.2 Approach and key assumptions ................................................................................... 59 © 2018 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Liability limited by a scheme approved under Professional Standards Legislation. Document Classification: KPMG Confidential Appendices 62 Appendix 1: H2City Tool scope ............................................................................................... 64 Appendix 2: H2City Tool key known simplifications and limitations ....................................... 65 Appendix 3: Regulatory issue considerations .......................................................................... 72 Appendix 4: Getting started with the H2City Tool ................................................................... 75 Appendix 5: H2City Tool illustrative examples for the hydrogen pathway .............................. 77 Bibliography 88 © 2019 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Liability limited by a scheme approved under Professional Standards Legislation. Disclaimer Inherent Limitations This report has been prepared by KPMG and CSIRO as outlined in the Scope Section. The services provided in connection with this engagement comprise an advisory engagement, which is not subject to assurance or other standards issued by the Australian Auditing and Assurance Standards Board, and consequently, no opinions or conclusions intended to convey assurance have been expressed. No warranty of completeness, accuracy or reliability is given in relation to the statements and representations made by, and the information and documentation provided by, Australian Renewable Energy Agency (‘ARENA’) management, personnel and stakeholders consulted as part of the process. KPMG have indicated within this report the sources of the information provided. We have not sought to independently verify those sources unless otherwise noted within the report. 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Document Classification: KPMG Confidential 1 | HYDROGEN COMMUNITIES Executive Summary Hydrogen is emerging as an alternate carrier of energy. It has the potential to play a key role in the decarbonisation of the energy sector, if produced by zero or low emissions sources. Governments around the world and in Australia are signalling interest in moving the hydrogen economy forward. Current efforts are focused on developing hydrogen visions and strategies, supported by investments and partnerships with industry to progress technology and unlock the barriers across the hydrogen value chain. Hydrogen technology is still maturing. For hydrogen to be cost competitive, key barriers in supply chain infrastructure and supply cost need to be overcome. Current investments are focused on research and trials to further develop the maturity of technology, educating and gaining acceptance of communities for hydrogen. © 2019 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Liability limited by a scheme approved under Professional Standards Legislation. HYDROGEN COMMUNITIES | 2 With Australia’s extensive renewable energy The hydrogen strategy group, led by Chief resources of wind and solar, clean hydrogen Scientist Alan Finkel, releasing a briefing can be produced for domestic use as a lower paper outlining the opportunities of emissions source of energy. This would ensure hydrogen for Australia security of the energy system and provide an ARENA’s opportunities for Australia from opportunity for export to the global market. hydrogen