New Zealand

Country: New Zealand

Document type: Vision

Title: Interim Hydrogen Roadmap – for consultation

Released: August 2023

Interim Hydrogen Roadmap

An Interim Hydrogen Roadmap for New Zealand was released in August 2023 and forms a pillar of the forthcoming New Zealand Energy Strategy (due by the end of 2024) alongside other projects including the Energy Market Measures Project, Offshore Renewable Energy Regulatory Framework Project, the Gas Transition Plan, and the New Zealand Battery Project.

A key purpose of the interim roadmap is to seek public feedback on the proposed role for hydrogen in meeting the needs of Aotearoa New Zealand’s energy system, its climate and economic goals, and the government’s role in that transition.

It is intended that the Hydrogen Roadmap will be finalised for release alongside the New Zealand Energy Strategy by the end of 2024.

The interim roadmap notes that the demand for green hydrogen is expected to grow significantly in the coming decades and could reach 180,000 tonnes per year by 2035 (base case), rising to 560,000 tonnes by 2050 (base case).

The interim roadmap notes such a demand pathway could start in the 2020s with the growing use of hydrogen as an industrial feedstock, and in heavy transport demonstration trials, then scaling up through the 2030s and begin peaking in the 2040s as established demand emerges from transport applications (particularly long-haul heavy transport, specialty vehicles, and aviation and marine transport), steel production, electricity system services, as well as an export market for hydrogen-based derivatives such as ammonia or methanol.

The interim roadmap notes that if this level of demand eventuates, meeting it could require 1.5 GW of electrolyser capacity in 2035, rising to 4.5 GW in 2050, which in turn could require electricity demand of 11.5 TWh in 2035 and 33.9 TWh in 2050.

The interim roadmap notes that an important policy consideration is that hydrogen development is matched with sufficient renewable electricity generation capacity: hydrogen production could require a build-up of at least 12.5 GW renewable electricity by 2050, assuming a mixture of solar and wind resources.

In this vein, the interim roadmap notes that while the New Zealand Government welcomes private activity for export, it does not see a case for public financial support at this time, as it wishes to ensure the necessary electricity generation and transmission required can be consented and built in line with hydrogen production, to avoid compromising decarbonisation in other sectors that will rely on electrification.

As regards public funding support, the interim roadmap notes that research projects, demonstration and deployment trials, and commercial partnerships across the the hydrogen supply chain has been supported by NZ$88 million in already committed government funding and financing with a further NZ$100 million for the Regional Hydrogen Transition consumption rebate and NZ$30 million for the clean heavy vehicles grant announced in Budget 2023.

The interim roadmap was informed by modelling of potential scenarios for hydrogen production/demand which was released alongside the Interim Hydrogen Roadmap. This Hydrogen Economic Modelling Results report was updated and re-issued in December 2023.

The hydrogen roadmap builds on previous and related works on hydrogen, including the 2019 Vision for Hydrogen in New Zealand, the hydrogen scenarios modelling project report (and associated) modelling tool published in 2022, and the review of regulatory settings to support non-traditional uses of hydrogen.

A Vision for Hydrogen in New Zealand

In September 2019, The New Zealand Government released for consultation the green paper “A vision for hydrogen in New Zealand”. The green paper looked at the scope of New Zealand’s hydrogen potential to frame discussions for a national strategy. The green paper sought feedback about the challenges and opportunities, and the Government’s role, in nine key areas: hydrogen production, hydrogen electricity nexus, hydrogen for mobility, hydrogen for industrial processes, hydrogen for seasonal power generation, decarbonisation of gas, hydrogen for export, innovation expands job opportunities, and transitioning the job market.

Hydrogen Scenarios and Modelling Project

Following release of the Vison, and as the first stage in the development of a hydrogen roadmap, an initial analysis of potential hydrogen supply and demand in New Zealand was undertaken. The modelling project suggested that demand for hydrogen is likely for heavy vehicle fleets, with other niche vehicle uses likely to follow similar technology tipping points. Gas pipeline blending to reduce the greenhouse gas emissions from combustion for heating was also possible.

This initial modelling effort was extended to develop potential scenarios for a future New Zealand hydrogen economy, along with key drivers of these scenarios, to be used to help inform policy and investment decision-making and enable the roadmap to determine the right size for a hydrogen economy in New Zealand. This finalised hydrogen scenarios report is dated June 2022.

Hydrogen Regulatory Settings

The Government is undertaking a review of New Zealand’s regulatory settings to evaluate if they are fit-for-purpose for facilitating the safe introduction of non-traditional hydrogen technologies and applications. As part of the process, a report (dated July 2022) was commissioned to review the regulatory frameworks required to support a future hydrogen economy in New Zealand and potential reform pathways.

In addition, Standards New Zealand has completed a scoping study outlining a suite of standards adoption recommendations to enable the use of hydrogen across New Zealand.

 

Updated: January 2024