29 Nov 2021

Australia’s NSW Passes Hydrogen, Gas Blending Law

29 Nov 2021  by   

Australia's New South Wales (NSW) state has passed legislation that will allow blending of hydrogen and biomethane into natural gas pipelines and help achieve a target of having 10pc of hydrogen in its gas networks by 2030.

The passage of the Energy Legislation Amendment Bill 2021 comes after Australian gas pipeline operator Jemena started blending hydrogen produced from renewable sources, also known as green hydrogen, into its gas network in western Sydney in NSW earlier this month. Jemena's hydrogen blending operations will service up to 23,500 households and more than 100 commercial and industrial customers.

NSW plans to be a significant producer of hydrogen for domestic use and export through a A$3bn ($2.2bn) state-funded investment plan for the expansion of renewable energy to produce hydrogen rather than for alternative methods of producing hydrogen from coal or gas.

NSW plans to create hydrogen production hubs in traditional coal-producing regions of the Hunter Valley, which is the country's largest thermal coal producing and exporting area, and the Illawarra region, which produces metallurgical coal, as well as build hydrogen hubs around planned renewable energy zones in regional NSW. The NSW state government has targeted a hydrogen price made from renewable energy, otherwise known as green hydrogen, at A$2.80/kg by 2030 from around A$8.60/kg at present, with much of the cost reductions coming from electricity network concessions and through economies of scale.

The new laws to support hydrogen are part of NSW's energy transition plan, with the state looking to cut greenhouse gas (GHG) emissions by 50pc by 2030 from 2005 levels. The NSW government is also looking to debate legislation next year to tighten the level of nitrogen oxides, sulphur dioxides and mercury emitted from the state's coal-fired plants.

The planning and environment committee of the Legislative Council, the upper house of the NSW state parliament, said in a report that it is time that the state's comparatively outdated and relaxed exceedance limits are tightened to reduce harmful impacts to residents' health. "Recognising the possibility of unintended consequences to reliability of electricity, the committee acknowledges that some transition measures and provisions may be necessary so as to plan," the report said.

The NSW Legislative Council committee concludes that a new Clean Air Bill to impose stricter limits on the concentrations of air pollutants emitted by NSW coal-fired power stations should be debated in parliament, the report said. This will likely occur in early 2022. Some energy retailers have informed the committee that the bill will force the closure of some power stations that cannot meet the new thresholds, it said.

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