In the race to a Clean Energy future, “green” hydrogen is considered the next big thing in the move away from hydrocarbons – particularly in the area of vehicle fuels.
The mining industry – always an innovator in the uptake and development of new technologies and ideas – has been an important early mover in investigating hydrogen’s potential to significantly lower CO2 emissions.
Recently, a report titled “Hydrogen Insights 2021: A Perspective on Hydrogen Investment, Deployment and Cost Competitiveness” was released jointly by the international Hydrogen Council and McKinsey & Company. The report investigates market deployment around the world, investment momentum, and the implications of the cost competitiveness of hydrogen solutions.
The report found that as of early 2021, over 30 countries have released hydrogen roadmaps and governments worldwide have committed more than US$70B in public funding in support of decarbonization through hydrogen technologies. No less than 228 large-scale projects have been announced along the value chain, with 85% located in Europe, Asia, and Australia.
These include large-scale industrial usage, transport applications, integrated hydrogen economy, infrastructure, and giga-scale production projects. The report says that if all announced projects come to fruition, total investments will reach more than US$300 billion in spending by 2030. Of this investment, US$80 billion can currently be considered “mature” – meaning that these projects are in the planning stage, have passed a final investment decision (FID), or are under construction, already commissioned, or operational.
According to the report, anticipating continued growth in scale, from a total cost of ownership (TCO) perspective – hydrogen can become the most competitive low-carbon solution in more than 20 applications by 2030, including long-haul trucking, shipping, and steel.
It suggests deployment through clusters with strong off-takers will help suppliers share both investments and risks while establishing positive reinforcing loops. Three cluster types are already gaining traction: 1) industrial centres that support refining, power generation, and fertilizer and steel production; 2) export hubs in resource-rich countries; and 3) port areas for fuel bunkering, port logistics, and transportation.
“In the scale-up of the hydrogen ecosystem, we see interesting patterns emerge: short-term, around 40% of investments flow into hydrogen production, and most projects target heavy transport and industrial clusters such as ammonia, refineries and steel,” said Bernd Heid, Senior Partner at McKinsey & Company.
Mining companies leading the way
While there are many challenges to be overcome in the transition to a new “clean” hydrogen existence, according to Accenture, mining companies may have a unique role to play in accelerating the use of – and benefitting from – this sustainable energy source as an alternative to fossil fuels.
Accenture says the mining industry, and the way in which mines are operated, can mitigate many of these challenges, making it a logical first mover in the space for the following reasons:
- Mine haulage fleets “return to base” to refuel at the same site at the end of every shift, thus benefitting from a centralized refuelling infrastructure with a suitable economy of scale. These fleets require maximum utilization and, therefore, demand a rapid refuelling speed that batteries currently cannot provide
- With a mine’s mechanically standardized heavy vehicle fleet concentrated in one location, skilled maintenance expertise would be more focused and better utilized
- Diesel fuel and electricity costs are often excessive at mine sites given their relative isolation. Retail prices for diesel in remote areas may exceed the national average price by more than 15%. For some mine sites the numbers are even more stark: miners have indicated that diesel-generated electricity costs are as much as five times higher in remote territories than purchasing electricity from the grid in less remote locations
- Miners are more incentivized to switch to renewable energy due to the higher power costs at their remote operations, and therefore – by proxy – are better placed to produce green hydrogen by utilizing said renewable energy infrastructure
- With mileage and bulk less of a concern for heavy vehicles, mine haulage trucks and transport vehicles are expected to utilize hydrogen storage tanks pressurized to a more conventional 350 bar, unlike light vehicles that would require more compact and complex tanks pressurized to 700 bar. This implies lower compression costs and less expensive storage systems
- Mining companies are familiar with the safe storage and management of chemicals, reagents, and compressed gases. Usually there is enough land area to safely store compressed gasses away from workers, infrastructure, and local communities
The push to embrace hydrogen
Some of the biggest names in mining and mining infrastructure have already taken major steps to ensure that the industry is at the forefront of the utilization of hydrogen.
Hatch, Anglo American, BHP, and Fortescue formed a Green Hydrogen Consortium in 2020 to look at ways of using green hydrogen to accelerate decarbonization within their operations globally.
Primarily, the consortium says it aims to collectively help to eliminate the obstacles to the adoption of green hydrogen technologies and encourage innovative application.
The combined goal is to identify opportunities to develop green hydrogen technologies for the resources sector and other heavy industries and provide a mechanism for suppliers and operators to contribute to and engage with these development activities.
Some of the proposed activities include undertaking research, technology, and supply chain development, as well as piloting green hydrogen technologies to seek to de-risk and accelerate the technologies.
Leading services firm Hatch has been appointed as the project management and governance facilitator of the Green Hydrogen Consortium. Australia’s premium scientific organisation, the CSIRO, is just one of many bodies around the world investigating the potential benefits the mining sector can gain from the use of hydrogen.
“There are a whole range of opportunities for hydrogen in the mining sector,” says Dr Daniel Roberts, who is the Director of the CSIRO Hydrogen Energy Future Science Platform.
“There’s a strong drive to decarbonize mining operations. Hydrogen can be used to store renewable energy to generate electricity, it can power equipment and trucks and cars, and it can even be used in certain mining processes as a reductant,” Dr Roberts says.
According to Dr Roberts, the use of “green” hydrogen energy is currently a hot topic in the resources sector, pointing out that there are already numerous examples where renewable-sourced hydrogen is actively used as an energy source and as a means for storing renewable energy in the mining industry.
