I wrote Hydrogen Boom more than three and a half years ago. I was mainly looking at the wisdom, safety and practicability (or otherwise) of using hydrogen to replace natural gas in residential and commercial buildings. It seems that (despite wasting a lot of money on the project) those in power have given up on that idea, and are concentrating on trying to force us to take up heat pumps instead. However, they haven’t given up on hydrogen as part of their net zero drive.

David Turver has just published an article with the heading “Green Hydrogen to Increase Gas Bills” and sub-heading “Green hydrogen is expensive and the Government is planning to increase your gas bill to pay for it”. I urge you to read the article for yourself, but in essence, it draws attention to the Hydrogen Allocation Rounds (HARs) that are similar to the Allocation Rounds (ARs) under the Contracts for Difference (CfD) scheme, but at much higher prices. HAR1 in December 2023 saw:

a strike price of £175/MWh (in 2012 prices) or about £244/MWh in 2024 money. By way of comparison, today’s elevated gas price is ~99p/therm or £34/MWh. Green hydrogen will cost about seven times the current UK gas price or ~23 times US gas prices. The Government gleefully announced that these projects would receive over £2bn of revenue support from the Hydrogen Production Business Model (HPBM). The 125MW of contracts awarded in HAR1 is only the tip of the iceberg though because HAR2 is aiming to support seven times that with 875MW of capacity under consideration.

This has to be paid for somehow, and the Government is now considering a Gas Shipper Obligation to fund over £2bn of revenue support from the HPBM. Read the article and weep.

However, I want to add another wrinkle to all this nonsense. Another question relates to the utility, if any, of all this in reducing a tiny fraction of the UK’s territorial greenhouse gas emissions, which are in total only 0.7% of global emissions according to the European Union’s Emissions Database for Global Atmospheric Research (EDGAR). The problem is that we can’t simply harness hydrogen without more ado. The government’s plans involve its manufacture, preferably in the form of what they like to call “green” hydrogen. Such processes themselves involve the creation of greenhouse gas emissions. How are they to be measured, in order to ensure that the use of hydrogen as part of the net zero plan makes “sense”? Why, with the thumb on the scale, of course. We have seen how the Levelised Cost of Electricity purports to show that electricity generated by renewables is cheap, by the simple expedient of ignoring many of the costs associated with its production. It seems (given how keen renewables enthusiasts are to cite the Levelised Cost of Electricity in support of their claims) that this tactic has been effective. And so it is also being rolled out when it comes to measuring the greenhouse gas emissions associated with hydrogen manufacture.

There is a UK Low Carbon Hydrogen Standard for hydrogen producers to use for greenhouse gas emissions reporting, including a calculator tool, all pursuant to The Hydrogen Production Revenue Support (Directions, Eligibility and Counterparty) Regulations 2023 (yes, really). Version 3 of the UK Low Carbon Hydrogen Standard Greenhouse Gas Emissions Methodology and Conditions of Standard Compliance was produced in December 2023, and it can be found here, if you’re interested. I warn you, though – it runs to 169 pages. That triggers another thought – it’s really quite terrifying to contemplate the cost of the time of civil servants and sundry “experts” producing stuff such as this, then monitoring it, all to produce some arcane figures relating to one small aspect of the UK’s GHG emissions. However, I digress. Finally, I arrive at the point I wanted to make, which is that when it comes to calculating the emissions associated with hydrogen production, there is once more a very heavy thumb on the scale:

5.2. The GHG emissions from the construction, manufacturing, and decommissioning of capital goods (such as production equipment, any upstream pre-processing equipment, vehicles, storage assets), business travel, employee commuting, and upstream leased assets are not within scope of the Standard.

5.3. GHG emissions associated with hydrogen processes after the Hydrogen Production Facility gate (for example, off-site Hydrogen Storage, off-site liquefaction, off-site hydrogenation into a hydrogen carrier) are not within scope of the Standard.

5.12. The total emissions allocated to Outputs of any Step in a Pathway shall be split only between the Products and Co-Products of that Step. By contrast, Waste or Residue Outputs from any Step in a Pathway shall have no emissions allocated to them.

5.13. The classification of an Output material can, therefore, have a significant impact on the Hydrogen Product GHG Emission Intensity, as Co-Product materials shall be allocated some of the emissions from the Step and previous Steps, reducing the emissions burden on the final Hydrogen Product.

Make of it all what you will. I am increasingly left thinking we are ruled by lunatics.

As the USA returns to energy sanity – driven by Donald Trump’s determination to destroy the wind industry and embrace, coal, gas and nuclear – any country still obsessed with chaotically intermittent and heavily subsidised wind and solar looks positively bonkers.

Australia sits firmly in that category. However, with a Federal election set for 3 May, politicians who ignore the crushing power bills faced by householders and businesses – and the obvious cause – are going to cop a pounding at the ballot box.

Now, for this week’s round up.

Melanie Groves reports on the revolt being led by farmers in Queensland, determined to Stop These Things destroying their ability to live in and enjoy their very own homes.

‘Noise is noise’ calls for wind farms to comply with noise limit regulations
Queensland Country Life
Melanie Groves
23 March 2025

Dick Filby reports on a study which proves the bleeding obvious: wind turbine blades, with their outer tips travelling at over 300 km/h make mincemeat of birds of all shapes and sizes.

Flying Blind: Why Gulls May Not See What’s Coming
Rare Bird Alert
Dick Filby
21 March 2025

The team from Jo Nova report on how net-zero carbon dioxide emissions targets are no longer the flavour of the month, and the hostility to net-zero madness now includes the world’s big bankers.

Bankers now abandoning Net Zero too
Jo Nova Blog
Jo Nova
28 March 225

Robert Bryce provides an update on his growing list of the wind and solar factory plans that have been crushed from the get-go, thanks to the efforts of diligent pro-community advocates, focused on providing reliable and affordable power, to all.

More Wind & Solar Projects Spiked. US Rejections/Restrictions Hit 791, Global Total Now At 91
Substack
Robert Bryce
28 March 2025

Paul Homewood tallies up the insane cost of Britain’s wind and solar scam, all born by power consumers and taxpayers, of course.

Environmental Levies Will Cost £95 Billion In Next Five Years
Not a Lot of People Know That
Paul Homewood
27 March 2025

Gavin Maguire provides a healthy antidote to the anti-nuclear squad, with a report from South Korea, which is rapidly increasing its nuclear power generation capacity, and enjoying the reliable and affordable power provided.

Nuclear growth helps South Korea cut back on coal and LNG imports
Reuters
Gavin Maguire
26 March 2025

Stay tuned, STT will be back next week with more.

Essay by Eric Worrall

Domestic energy policy blunders from politicians on all sides are killing Australia’s manufacturing industry.

‘The big lie’: Why governments can’t deliver cheaper power

Political leaders have been promising lower power bills for two decades. But with the energy transition in full swing, its high time they came clean about its true costs.

Ryan Cropp Energy and climate reporter
Mar 27, 2025 – 5.00am

Since the early 2010s, when Australia’s climate wars began in earnest, practically every federal political leader has at some point in the electoral cycle pledged to do something about power prices. Very rarely have they followed through.

The Albanese government is the latest to walk into the trap. On Tuesday night, Treasurer Jim Chalmers offered up a third round of electricity rebates, in part to cover its tracks after its ill-fated 2022 election promise to reduce bills by $275 was overtaken by events – albeit largely beyond their control.

Not to be deterred, though, the Coalition is heading into the federal election selling an equally ill-advised counterclaim that its policy to replace Australia’s coal power stations with seven government-owned nuclear power stations will lower power bills by 44 per cent.

…

But whichever way you slice it, Australia’s energy system is at a crossroads. It is reliant upon an ageing and increasingly unreliable fleet of coal-fired power stations that will eventually need to be replaced. Whether governments choose to do that with renewables, nuclear or something else entirely, it’s going to cost a lot of money.

…

Read more (paywalled): https://www.afr.com/policy/energy-and-climate/the-big-lie-why-governments-can-t-deliver-cheaper-power-20250318-p5lki3

Australia’s energy infrastructure is not “at a crossroads”, it is on the verge of falling apart. Decrepit power systems have been maintained well beyond their expected end of life, because decades of hostile regulatory policies have deterred investment in new generators.

The impact of incompetent, ill considered government energy policy interventions from both sides of Australian politics has been devastating.

Australia’s failed energy system crashes on economy

Leith van Onselen
Tuesday 18 March 2025

Electricity prices soar by up to 9% 

Labor’s 2021 Powering Australia Plan, released prior to the last federal election, promised that Australians would save $275 on their residential electricity bills by 2025 and $379 by 2030.

…

Last week, the Australian Energy Regulator (AER) announced that electricity bills will rise by up to 9% from 1 July. The largest jump will be seen in NSW (up to 9%), whereas QLD will see prices rise by up to 6%.

…

Incitec Pivot has downsized its fertiliser production because of high energy costs. It closed its Gibson facility in Queensland in 2022, impacting 170 jobs. Incitec’s Geelong fertiliser business also closed last year, costing 40 jobs.

…

Last year, Australia’s last major plastics manufacturer, Qenos, closed due to high energy costs, making Australia wholly reliant on imported plastics from China.

Australia’s only architectural glass manufacturer, Oceania Glass, closed last week after 169 years of operation.

…

Read more: https://www.macrobusiness.com.au/2025/03/australias-failed-energy-system-crashes-on-economy/

The article blames gas exports for high prices, but why are gas companies prioritising exports over domestic consumption? Sometimes at a lower paper profit?

The answer is obvious – the export market is safer and more predictable. Exporters know when they sign those contracts that they will make money.

The same cant be said for the domestic gas market, which in Australia is subject to capricious government price controls.

While in theory the export market is just as vulnerable to government tinkering as the domestic market, in practice the integrity of the gas export market is protected by angry foreigners who threaten massive economic retaliation whenever Aussie politicians try to interfere.

There have also been hints gas giants will play the “Atlas Shrugged” card if the Aussie Government gets too interventionist. Argentina in particular is attracting attention as an alternative to Australia, they have vast, underexploited gas reserves. Pro-business President Milei, often described as the Argentina’s answer to President Trump, is pushing hard for businesses to invest in the vast Vaca Muerta shale gas field (estimated reserve 308 trillion cubic feet). While Argentina is not currently a serious player in the gas export market, and faces onto the Atlantic rather than the Pacific, it won’t take long for solutions to be found if there is sufficient demand. In a few years, Asia will no longer need to look to Australia for gas.

In the face of this threat of imminent demand destruction, why is Australia being such a troublesome gas export partner?

The reason for all this political foolishness is no mainstream Australian political leader is focussed on prosperity. With a few honourable exceptions, politicians on all sides of the Australian political spectrum are obsessed with tinkering with energy policy, trying to create an energy policy with offends the least number of voters, instead of an energy policy which works.

It doesn’t have to be this way. Australia could easily have the best of both worlds, by using cheap coal for domestic industrial energy, especially brown coal, which is immune to international price changes because nobody else wants it, and letting international trading partners have all the gas they want. Japan, which desperately needs gas, might be persuaded to stick with Australia instead of diverting development resources to places like Argentina. They might even be persuaded to build some new high efficiency coal power plants at rock bottom prices, in return for better long term access to Australian gas – if Australia acts quickly enough.

The mainstream opposition plan for a government funded nuclear programme is a step up from the incoherent renewable energy plans of the incumbents, but crisis hit Aussie manufacturing needs a solution which delivers now, not in 20 years. Nuclear will do nothing in the short term to alleviate the pain of Australian energy prices.

The long term benefits of nuclear are dubious for a nation like Australia. Nuclear is a viable technology, but Australia has lots of coal. The upfront capital costs of nuclear power are much greater than coal. With the opposition proposed government funded nuclear programme, all the capital cost of building nuclear power plants will pile onto Australia’s national debt, just as baby boom demographics are starting to bite. Even if the nuclear plants are completed, the cost of energy produced by nuclear plants will be significantly higher than coal – especially in a nation which is sitting on a mountain of accessible, shovel ready coal resources.

Don’t get me wrong, there are places in Australia where nuclear makes sense, where remoteness and a lack of local fossil fuel energy resources tips the balance firmly in favour of nuclear. Advances in nuclear energy could alter this balance further. But where coal is available, Australia needs a solution which delivers today, not 20 years from now, otherwise there will be no manufacturing industry to rescue.

Even if you think I am wrong about nuclear, we need something to tide us over while the nuclear plants are being built. Nuclear power plant construction is not something which should be rushed, especially in a nation as inexperienced as Australia.

The next Aussie federal election is 3rd May 2025. But whichever mainstream party wins, Australian manufacturers will lose. This Aussie federal election provides no prospect for relief for what is left of Australia’s manufacturing industry.