The Hydrogen Horizon: Australia’s Next Big Renewable Leap

As countries worldwide continue to pave a more sustainable path for the future, hydrogen has become a topic of great interest in recent years. 

Hydrogen is a fundamental element in nature, and stands as a versatile and environmentally friendly energy source – offering a promising alternative to traditional fossil fuels. It can be produced and utilised in many different ways, with “green hydrogen” gaining favour as the preferred method due to its climate-neutral properties. 

Green hydrogen – produced via electrolysis of water using electricity generated from renewable energy sources, making it a clean energy source.
Blue hydrogen – made from natural gas, combined with carbon capture and storage technologies to capture and store the emitted CO2.
Grey hydrogen – similar to blue hydrogen but CO2 emissions are not captured. 
Turquoise hydrogen – produced by breaking down methane into hydrogen and solid carbon, without CO2 emissions.
Pink hydrogen – produced through electrolysis powered by nuclear energy.
Yellow hydrogen – essentially green hydrogen produced using solar energy specifically for electrolysis.
Brown hydrogen – coal converted into hydrogen, carbon monoxide, and CO2.

With Australia’s ambitious carbon reduction deadlines fast approaching, awareness surrounding the commercial availability of hydrogen and its potential as a locally-produced renewable energy source is rapidly rising.

ATCO (a global leader in energy, utilities, logistics and infrastructure solutions) is on the frontline of this emerging hydrogen landscape. They are renowned for their focus on innovation and sustainability and have been actively involved in many innovative energy infrastructure and hydrogen projects, such as the following:

• Clean Energy Innovation Hub (CEIH) - an operational model of solar, battery, and renewable hydrogen production through electrolysis. Through this, hydrogen is being blended into the gas distribution network; electricity is being generated from stored hydrogen through an onsite fuel cell; and hydrogen fuel cell vehicles that are part of ATCO’s fleet are being refuelled.
• Hydrogen refuelling station – part of the CEIH and the first of its kind in Western Australia, the station is fuelling ATCO’s fleet of hydrogen vehicles.
• Hydrogen blending project – ATCO is blending up to 10% hydrogen to around 3,000 homes connected to the natural gas network in Perth.
  ATCO is undertaking feasibility work funded by the Australian Renewable Energy Agency’s Hygate program, looking at large scale production and export of hydrogen.
• ATCO is also involved in the South Australian Hydrogen Jobs Plan, having been selected as one of the consortium members participating in the early contractor involvement phase for the design and costings of the hydrogen production and power generation facility, at a world-leading scale, in Whyalla South Australia.

Russell James, General Manager Hydrogen and Future Fuels at ATCO Australia, says hydrogen’s long track record as a reliable energy source demonstrates its strong potential for contributing to renewable energy solutions.

“Millions of tons of hydrogen are made and utilised across the world right now, and have been for decades. We know how to produce, transport, and use it safely and there is already regulation surrounding all of these activities.

“Of most interest right now is the ability to produce hydrogen in a way that results in zero carbon being released into the air. This means that not only is the energy production method carbon neutral, but the energy itself is environmentally friendly and sustainable.’’

ATCO’s Clean Energy Innovation Hub is an operational model of solar, battery and renewable hydrogen production through electrolysis. A vast array of solar panels on site generate electricity which powers an electrolyser to create the renewable hydrogen. 

Through this, ATCO is demonstrating that hydrogen can be blended into the gas distribution network to:

• reduce emissions
• generate electricity from stored hydrogen through an on-site fuel cell
• refuel zero-emissions hydrogen fuel cell vehicles that are part of ATCO’s fleet  

“Currently, ATCO has a project in place where we are now blending up to 10 per cent and supplying it to around 3,000 homes in Western Australia. We're also working on a project home that is designed to demonstrate the use of 100% hydrogen. It includes hybrid battery solar, a natural gas backup generator, and 100% hydrogen appliances and fuel cells.”

Russell has seen that, when integrated with solar and wind initiatives, hydrogen holds significant potential to bridge the gap between renewable energy demand and availability – particularly during peak periods or when weather conditions are unpredictable. 

Hydrogen holds great potential, with many possible applications

Hydrogen is useful for more than powering homes and businesses. It also holds considerable potential as an alternative fuel source for cars, buses, trucks, trains, ships, planes, and various other applications. 

“Hydrogen can be used in so many ways, including as a fuel source for all forms of transport,” says Russell. “It’s a light molecule which allows for significant compression and efficient energy storage in vehicles. Compared to battery electric motors, a passenger vehicle would take less than five minutes to fill up and the car could then travel roughly 650kms. For this reason, hydrogen's potential to facilitate heavy haulage by powering trucks, cargo trains, and planes is quite remarkable. 

“Most importantly though, the only emission from any vehicle using hydrogen is warm water. So when we combine the emissions saved during production compared to oil production, and carbon emissions eliminated from vehicle use, we find a very compelling case for hydrogen.”

In terms of commercial viability, the primary challenge for hydrogen lies in its cost – particularly since green hydrogen production methods tend to be more expensive. 

“For hydrogen to become a widespread alternative to fossil fuel energy sources, we need to be able to produce it at scale where it lands at a reasonable cost to consumers. Industry would also need to make a significant investment in infrastructure, making government support critical. There must be firm assurance of hydrogen's acceptance as a renewable energy source, along with a sustained commitment to support its production, distribution, and adoption.  

“We’re already seeing this with the Australian Government’s pledge to invest $2 billion in the new Hydrogen Headstart program. Initiatives such as these recognise that it is much more environmentally friendly for Australia to produce its own hydrogen than to require shipments from overseas. Other countries recognise this too, which is why we’ve seen similar investment commitments in hydrogen across Europe, the US, UK, Japan, and more.

“Safety will continue to be an essential consideration, which we acknowledge with every new hydrogen project we work on at ATCO. As a society, we’ve come to accept the inherent risk of energy sources such as electricity and fuel, and hydrogen will be no different. While it can be far safer than others, we must always be engaging with safety regulators and communities to drive proper education around hydrogen use.  

“Communication is key if we are to devise genuine and pragmatic solutions for a cleaner future and make them accessible to the public.” 

Japan’s ambitious hydrogen strategy
Japan's green hydrogen initiative represents a significant step towards a sustainable energy future. With a target of transitioning to a hydrogen-based society by 2050, they are investing heavily in research and development – particularly in electrolysis technology and hydrogen fuel cells. This initiative is supported by substantial government funding and collaboration with private sectors to develop a robust hydrogen infrastructure.

One of the key aspects of the initiative is securing a stable supply of renewable hydrogen through international partnerships. Japan is also focussed on integrating hydrogen into various sectors, such as public transportation and residential energy systems. Through their commitment, they are actively demonstrating the feasibility of hydrogen as a clean energy source and inspiring global adoption of similar sustainable energy solutions.

Partnering with a future-focused adviser

RSM has been working closely with ATCO, providing comprehensive internal audit services to strengthen the organisation’s operational, financial, and compliance processes. By supporting ATCO’s Internal Control Certifications (ICC) program, RSM helps ensure that internal controls are effective and aligned with industry best practices. In addition to offering IT controls assurance earlier in our working relationship RSM also assisted ATCO by auditing its greenhouse gas emissions, assisting the company to meet regulatory requirements while enhancing transparency in its sustainability efforts. Our ongoing collaboration ensures ATCO maintains robust governance, reduces risk and continually upholds stakeholder trust.

Watch this space

With the clean energy landscape continuing to evolve, RSM is keeping our finger firmly on the pulse. We are excited to see new innovations develop, and to work with our clients to help position them for success – be it through strategic guidance, business advisory, and audit or consulting support in areas such as risk management, ESG, cyber security, grants, funding, and more. 

To start a conversation with one of our experienced advisers, contact Dan Hutchens in Perth on (08) 9261 9302, Jacob Elkhishin in Brisbane on (07) 3225 7819, or your local RSM office.