“Ultimately, Green Hydrogen Will Drive The Biggest Changes In Energy”, John Grimes, SEC Australia

John Grimes leads the Smart Energy Council – Australia as its CEO. The council is an independent body that gives an impetus to the renewables sector in Australia by offering energy solutions. In March this year, John led an over 34 member delegation representing over 29 Australian smart energy firms to India. This visit saw the Australia India Trade Association and the Smart Energy Council of Australia entering into an agreement, signed by John Grimes and Ashish Katta, Chairman, Australia India Trade Association. During a stopover in Delhi, SaurEnergy caught up with John to gather his impressions about the energy transformation in India and potential for Australian firms in India and vice versa.

Tell us about your interest in India, and subsequent moves like organising this delegation visit of Australian firms across India?

John: I have been tracking the Indian market, and more recently when India imposed the trade tariffs (BCD) for solar imports, that seeks to foster a manufacturing ecosystem domestically here. In Australia, in the context of COVID and disruption of supply chains, we have been particularly vulnerable to supply shocks, so there was always the case for exploring a diversification of our own supplies in the smart energy space. I came to India in August last year with an open mind and a few questions in mind- Can Australia think of India as a potential partner for supplies? Is India a potential source of investments in clean energy projects in Australia? Could our institutions partner on technology where many Australian institutions have done tremendous research work? And of course, the green hydrogen space which is picking up pace now, and where we have enormous ambitions in Australia.

Travelling across multiple cities, I met people across government, firms in this space, the Niti Ayog, firms in the EV industry. And quite frankly, I was actually shocked as I realised that the Indian market is much more developed than we had imagined. The transformation under way here is much wider, faster than we had imagined, and that made a strong case for a larger engagement with our stakeholders industry in Australia and people here. Though governments set the framework for collaboration, it is the industry that has to ensure it is implemented and reaches fruition on the ground.

What are your reflections following the visit?

John: We have a very diverse group with us. This includes one of the largest project developers in Australia and around the world. A firm is working on a 26 GW project in Australia right now, which is looking for potential suppliers, electrolyser suppliers and more. We have firms making power electronics for inverters, those making cathodes for Lithium-Ion batteries, solar cell innovations, where silver could potentially be replaced with copper to get record efficiencies and lower cost. There is also a case for us to do more value addition in Australia in many of these spaces like Lithium Ion batteries, where we currently just ship the dirt (ore) across to other places. India and Australia can explore a series of opportunities together. Why can’t India collaborate with Australia for lithium refining, for instance? India is set to become one of the largest Lithium Ion battery markets in the world, and seeks security of supplies. Similarly, we have a firm that makes a tiny inverter that can work extremely well in an off-grid environment for water heaters, which has potential use cases in India too. So basically I am extremely optimistic about the possibilities.

Could the two countries build collaboration on Green Ammonia and Green Hydrogen?

John: Yes, so the Indian government spends a massive amount of money on fertiliser subsidies. As gas prices have spiked, the subsidy costs have also risen. Consequently, renewable (green) ammonia for use in fertilisers has become competitive. Imagine if India could support, build out projects for green ammonia in India and Australia, and actually help to strip out emissions from the very hard to abate agricultural sector in the bargain. That’s the kind of blue sky projects we have discussed and need to think about.

The most exciting opportunity is in green hydrogen. While India has a renewable hydrogen exporting agenda, it has a lot of domestic demand too. It is going to take a lot to satisfy demand, just in sectors like fertilisers. Smart Energy Council has a certification scheme to actually guarantee that the hydrogen used in the process is green. The first project has already been certified- it is a green hydrogen refueling station. All of the embedded carbon in a project is being tracked. From the water, to the membranes that have to be replaced, everything is tracked.  A second project is being certified with Bureau Veritas (BV) for green ammonia. Internationally, the benchmark is using one kg or less of embedded carbon for every kilogram of green hydrogen produced. What we are seeing in these projects is that the actual levels are barely 10% of these, making these processes very promising indeed.  In Gujarat, we signed an MoU with Pandit Deendayal Energy University (PDEU), and the objective is that we will share our learnings to help Indian firms certify green hydrogen projects.

I think it is in India and Australia’s mutual interest to develop a trust mechanism (that already exists) so that we can work together to exploit bigger opportunities worldwide. Also, your summer is our winter. If you combine the two, you get a steady flow, perhaps not hydrogen but ammonia. It’s limited by our own imagination.

Do you see potential for a bigger, strategic partnership?

John: Yes, there is a case for a genuine strategic agreement. We can also support the Indian industry with offtake agreements for solar modules and other technologies that will underpin those, agreements that enable investments by both sides. We are at a moment in history where it’s all about timing. What I hear from both sides is a commitment to make it work. We already have some examples of Australian firms that are working here like PowerLedger. Both sides would like to see some success stories to increase momentum.

Major countries around the world are making efforts to give an impetus to domestic manufacturing. Here, in India, we have the PLI Scheme. What is your opinion on such attempts?

John: There is a major $15 billion dollar fund being set up for solar batteries, smart energy, modules etc in Australia too. In major markets like the United States, moves like the Inflation Reduction Act can have a huge (distorting) impact on the global Hydrogen market for instance, so we have to find ways to work around those and ensure our own industry reaches potential. The imperative of climate change is such that demand has to remain strong, and will. So despite these moves, growth will follow for these industries.

Australia has been record rooftop additions and share of grid. What explains it? What is the potential for rooftop going forward?

John: In our major jurisdictions, rooftop solar penetration is at close to 30-35%. So yes, it will get saturated at some time. It has been big in Australia simply because it is so cheap. The levelised cost of electricity from rooftop solar can be as low as 5 cents per kWh, versus 30-25 cents from the grid. So with subsidies in place till 2030, the rooftop solar expansion will continue. There have been periods of time when 100% of demand has been met by rooftop solar in South Australia, for instance.

In South Australia, they are trialing something called flexible exports, which basically curtails exports to the grid when supply is too high. What they are finding is that curtailment happens less than 2% of the time, removing apprehensions about large scale curtailment.  What we all need is a much more capable, intuitive responsive and sophisticated grid, which means a partnership between the solar industry, the manufacturers, and the grid operators.

As opposed to Australia, the uptake of rooftop solar in India has been rather slow. What are some takeaways that can be taken from Australia in this segment?

Political pressure worked in Australia. We ran hard hitting campaigns to build awareness on how we were missing out. Rooftop solar was too politically potent for politicians to ignore. The other thing is, we have a big offgrid footprint in Australia. A lot of areas have a very small population, so renewables with storage made even more sense. In India, I would love to see some C&I customers go off the grid. That would really shake things up in terms of the possibilities. More importantly, there is always initial skepticism for new ideas. But as we have seen, once you build them, many people come over to your side.

What about the Australian experience with Big batteries, starting with the profitable record of the first one, the Hornsdale big battery?

John: Power engineers would laugh off big batteries if you brought it up to them. But once these were installed, they have delivered stunning results, and done it with huge financial returns too. It’s almost like they don’t believe it till they see it. The pipeline for large scale batteries in Australia sits at over 4 GW, which is huge. In India, what I’ve been hearing is that you still have low penetration rates for renewables in the grid, so the grid acts like the battery in the sense that it is the primary fallback for most people. That’s where we were ten years ago, so as the share of renewables goes up, there is a lot we can share and learn from Australia.

Does the Smart Energy Council see opportunities to train people outside Australia?

One of the things we have is a smart energy training centre. We provide high quality training to solar designers, installers. We have one of the most cost efficient and high quality of rooftop solar in the world in Australia. So I think there is a lot we can offer, we are looking at opportunities to train the trainer. Some of the larger developers are also looking at training for their projects.

Do you think carbon capture is the future? Does Australia have a carbon mechanism in place?

Yes, it is the future. You look at the carbon border adjustment tariffs that Europe is talking about. Ultimately, it is going to drive everything. That is why I am very bullish on green hydrogen. Today, we take a unit of energy from coal or gas, and you convert it into Hydrogen and then you use the hydrogen to create energy, to get the same unit of energy is 6x to one, or even 11x to one. So that is going to kill the world. So this notion of all the colours in Hydrogen is nonsense. A viable carbon capture story is also nowhere in sight. So it is the market that decides. If the market doesn’t demand it, then we have a huge problem everywhere. Australia is right now putting in place a carbon mechanism which will require firms to either invest in carbon mitigation, or buy offsets. It’s a big step forward from where we have been, like the last ten years were a disaster for climate policy. Of course, there is still a risk of poor quality credits, but we have to start for now, and keep improving as we go along.

Where did policy fail?

We have too much coal. We have enough coal to power the world for the next 300 years. But it’s really essential that that most of this coal stays in the ground. It’s like the tobacco industry that tried to obfuscate and worse. The most recent federal elections basically cut that argument with people siding with the transformation pitch. It was an important win that we needed to make sure happened, and things will change now.