Hydrogen promises to become a key long-duration energy storage solution and a versatile clean fuel. But how close is Australia to unlocking its full potential?
How Hydrogen Supports the Grid
Unlike batteries, which are suited to short and medium-term storage, hydrogen can store renewable energy for days or even seasons. It is produced by using electricity (ideally from renewables) to split water into hydrogen and oxygen—a process called electrolysis.
This “green hydrogen” can be:
- Reconverted into electricity
- Used directly in industry or transport
- Exported as ammonia or liquid hydrogen
The National Hydrogen Strategy (2023 update) identifies hydrogen as a pillar of Australia’s net-zero ambition, with major hydrogen hubs planned in Gladstone, the Pilbara, and Eyre Peninsula (Department of Climate Change, Energy, the Environment and Water, 2023).
Key Challenges
However, hydrogen is not yet cost-competitive. According to CSIRO’s GenCost 2023–24, green hydrogen remains 2–3 times more expensive than fossil-based alternatives, and round-trip energy efficiency is low—typically 25–35% compared to over 80% for batteries.
Other hurdles include:
- Scaling electrolyser manufacturing
- Storage and transport infrastructure
- Safety regulation and certification standards
ARENA and CEFC are co-investing in demonstration projects to test viability and establish real-world benchmarks.
Conclusion
Hydrogen isn’t today’s dominant storage solution—but it’s vital to Australia’s future export economy and energy security. With investment and innovation, it could become the missing link in long-duration, low-emissions power systems.
