Ammonia Energy Live May: Origin Energy’s decarbonisation journey

This May we presented a new episode in our monthly webinar series: Ammonia Energy Live. Every month we’ll explore the wonderful world of ammonia energy and the role it will play in global decarbonisation – with an Australian twist.

For May’s episode we welcomed Sarah Tincknell, Stakeholder and Regulatory Manager of the Future Fuels Division at Origin Energy. Sarah joined us to share some of the experiences and learnings Origin Energy has gone through on its decarbonisation journey to date, and give us some insights into what emissions reduction looks like at an electricity generator and retailer. And, of course, we wanted to find out where ammonia and hydrogen fit into Origin’s long term plans for decarbonisation. Sarah was interviewed by Emily Heenan, (Process Engineer, also in the Future Fuels Division at Origin), and Jacinta Bakker (Senior Research Coordinator at Jupiter Ionics).

Origin?

Origin Energy is a well-known Australian organisation with a lot of different business activities, including responsibility for 30% of Australia’s east coast gas supply. Origin’s experience with developing large-scale electricity agreements, complex project delivery, large-scale asset management and familiarity with LNG exporting puts it in a good starting position for green hydrogen and ammonia projects.

But, as Sarah explains, that’s only half the story. Origin can decarbonise via green hydrogen and ammonia, but why would they do it? Well, momentum is accelerating. More than thirty countries have released national hydrogen roadmaps, with ammonia as a serious contender to be the primary energy and molecular carrier. As of February this year there’s more than 200 projects announced with over US$70 billion in funding. There’s a “wall of money” and a real appetite for change out there, so this opportunity should not be wasted!

Sarah’s experience working across agricultural and environmental disciplines has demonstrated to her how vital a stable climate is to our future. Natural ecosystems, food and fiber production in Australia rely so heavily on climate, and extreme weather will stress all of those systems. Living and working in regional areas, Sarah has also seen firsthand the impacts of extreme weather events, so there’s no putting this to one side – the time to act is now.

Level of climate ambition?

Where does Origin see the level of ambition rising to? “How long is a piece of string?!” answers Sarah. Two years ago it would have been inconceivable that the world’s major oil and gas companies would embrace a low emissions future, but here we are: the CEO of BP has publicly stated he is transforming what has been an oil company for over 100 years into an integrated energy company, Shell is now a major player in offshore wind and hydrogen development in Europe, and the list goes on.

Origin has been quite open that their aim is to reach net-zero emissions by 2050. And, this transition will be customer/demand-led: Australian states, foreign trading partners and industrial sectors need to demand a change to decarbonised energy, supported by government or policy driven targets and intervention. And, that should be a cascade effect: early customer demand enables investment in the early commercial scale projects, which will be the fastest way to bring the cost of equipment down the learning curve in time to meet increasing demand. Everyone seems to agree that demand will boom in the 2030s, but steps need to be taken now to guarantee that. Ensuring early off-take agreements are in place in the 2020s and building long-term relationships with future partners is absolutely critical.

Does Australia have any natural advantages over the other potential big hydrogen and ammonia exporters? Not really, says Sarah, “though we have a window of opportunity [that] it is ours to squander!” There’s 63 projects announced in Australia, but only 13 are operational or under construction. If Australia wants to be a leader by 2030, that equates to production and transport of about 500,000 tonnes per year of green hydrogen, and 5-10 GW of electrolysers up and running. These projects typically have a 4-7 lead time, so things have to get started now. It’s far from a guaranteed outcome.

Australian communities and the coming transition

If you’re talking about 5-10 GW of electrolysers and associated industrial plant installed across Australia, how is the wider community going to be brought on board with this transition? This is a key question for Sarah in her role, and a factor that can’t be underestimated. Every large project will require the building of production and storage facilities, most likely a pipeline, most likely high voltage power lines and substations and maybe even a port development. All this activity is going to happen “in someone’s back-yard”, so trust needs to be built from the outset. Ammonia has the added complication that it’s associated with incidents like the recent one in Beirut.

Sarah tells us that current independent research shows that:

• there are low levels of public awareness regarding technology, end uses, and current projects and strategies, 
• there is a neutral to positive response to the development of the industry,
• support for the industry is correlated with knowledge, 
• conversely, a neutral stance is correlated with a lack of knowledge, and​ 
• independent sources of information (e.g. government) are more trusted than proponents.​

So the more communities are aware about a project, the easier it is for sentiment to be tilted in the negative direction. And, in the absence of authoritative information from independent sources, misinformation can fill the void. Being on the ground in these communities, making personal connections, sharing experiences and building trust in the benefits of a project is key, and this is something Origin already does well. Communities impacted by climate extremes will benefit from decarbonised energy, so education & advocacy at a local level is absolutely critical in getting these projects over the line. Government should be leading this conversation, but organisations like the AEA definitely have a big role to play in this.

What color?

So what about the nature of these projects: green hydrogen/ammonia from the outset? Sarah says Origin prefers the term renewable rather than green. Low or zero carbon alternatives to replace their customer’s current fossil fuel demand means it is not an “either/or answer” – a “toolbox” approach is needed, and if that means a blue product with as low a carbon footprint as possible then that’s what’s needed. But price parity will probably be upon us earlier than first thought: just the day before this interview Sarah was listening to Bloomberg analysts predict that Australian green hydrogen will be at price parity with blue within a decade, and that this ramp time is too short to attract significant investment in blue projects.

In terms of certifying that renewable product, Sarah has a few key things that need to be part of a successful certification scheme. Origin needs its customers to feel assured they’re buying products that meet their decarbonisation needs. So any future scheme needs to be transparent, trustworthy, internationally-applicable and led by governments and organisations working in unison. What is the gross and net carbon footprint of the product on a well to gate basis, what form does the carbon abatement take, is this scheme being used globally by other key exporters, etc. These are some of the questions Origin’s customer’s need clearly answered. And there’s some urgency to this – significant investment decisions are waiting for this clarity and can’t move forward with it.

And in audience Q&A Sarah gave us some quick thoughts:

Ammonia-fueled vehicles in Australia? Vehicle manufacturers will definitely drive this, but it’s clear Australia is struggling with the implementation of fuel cell vehicles. Better to look to the marine and heavy transport space on this, or to hydrogen-fueled vehicles.

Ammonia for power generation in Australia? Another good question. Origin won’t be a first mover, but is definitely watching the coal co-combustion demonstrations in Japan with great interest. If successful, Origin will definitely be looking to leverage off the work currently going on.

How does Origin fit into the Asian market? Pretty basic – the supply of low and zero-carbon energy where required. LNG has a role here.

Any updates on Origin’s key hydrogen/ammonia projects? “Beavering away!” Feasibility at Bell Bay, Tasmania is underway, as is work in Townsville looking at liquid hydrogen export. And the MoU with POSCO should produce interesting results.

Is hydrogen and ammonia a chance for Origin to move into a space it hasn’t traditionally been a part of (ie. provision of liquid fuels)? Yes, it’s absolutely a part of growing Origin’s business. 

Thanks again to Sarah, Emily and Jacinta for the session. Watch a recording of the episode here, and read more about Origin Energy in the ammonia space via our Ammonia Energy reporting archives. You can register for our upcoming June episode featuring the Hydrogen Utility (H2U) here. All episodes of Ammonia Energy Live can be found at AEA Australia’s YouTube channel – make sure to hit subscribe while you’re there. Thanks for tuning into Ammonia Energy Live, and see you next month!