From evangelist to pragmatist: Andrew Forrest’s green hydrogen pivot
Aug 1, 2024
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Andrew Forrest, founder of Fortescue Metals Group and a major player in the green hydrogen movement, shares insights into his shifting vision on green hydrogen amid market challenges. Former chief scientist Alan Finkel discusses the uncertainties surrounding hydrogen as an energy storage solution. They tackle the implications of Fortescue’s job cuts and slowed initiatives, questioning Australia's ambitious hydrogen goals. The conversation highlights the complexities of transitioning to sustainable energy and the hurdles faced in balancing visionary goals with practical realities.
Andrew Forrest's shift from ambitious green hydrogen targets to a more pragmatic approach signifies potential challenges for Australia's energy transition plans.
The podcast reveals concerns about hydrogen's efficiency compared to batteries, questioning its viability as a mainstream energy solution in the near future.
Deep dives
Andrew Forrest Scales Back Hydrogen Ambitions
Andrew Forrest, once a prominent advocate for hydrogen, has significantly reduced his target of producing 15 million tonnes of green hydrogen by 2030. This announcement led to the layoff of 700 staff at Fortescue, indicating a momentous restructuring of the company's plans. Forrest acknowledged that the focus of governments worldwide is now shifting towards reducing electricity prices instead of promoting hydrogen production. Despite this, he insists that Fortescue will continue with three ongoing hydrogen projects, asserting that the ultimate goal remains, albeit delayed.
Systemic Challenges Facing Hydrogen Production
The discussion highlights the inherent inefficiencies in hydrogen production as a viable energy source. Producing green hydrogen requires significant energy inputs, leading to substantial energy losses during storage and transportation. Experts argue that using batteries for energy storage is more efficient, yielding a higher return on energy investment compared to hydrogen conversion processes. This reality challenges the premise that hydrogen could swiftly become a mainstream energy solution, especially in a landscape where renewable options are becoming more accessible.
Impact on Government Hydrogen Initiatives
Forrest's retreat has cast doubts on the Albanese government's aspirations to establish Australia as a hydrogen superpower. The scaling back of Fortescue's projects suggests that existing government incentives may fall short of driving the hydrogen industry into reality. Experts warn that dwindling confidence around hydrogen projects could have implications for Australia’s long-term net-zero goals. Attention now shifts to whether future incentives will adequately stimulate industry growth or remain underutilized as seen with current initiatives.
This week on The Fin podcast, resources reporter Peter Ker discusses whether Andrew Forrest's green hydrogen dream was a fantasy and what his retreat means for the government’s green energy plans and Fortescue’s future.
Green hydrogen too ‘expensive and inefficient’: Finkel Former chief scientist Alan Finkel – who devised Australia’s first clean hydrogen strategy – now says we are “unlikely to use hydrogen for storage of electricity”.
Labor’s hydrogen dream stalls as Fortescue slims down H2 vision Fortescue will cut 700 jobs and slow its push into green hydrogen in a blow to the Albanese government’s plan to make Australia a hydrogen superpower supported by more than $8 billion of taxpayer funded incentives.