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Future of hydrogen-based communities a step closer with H2City launch

Future of hydrogen-based communities a step closer

ARENA, ATCO and KPMG collaborate to drive sustainable hydrogen energy solutions for Australia.


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The potential of hydrogen to transform the energy sector is a step closer today with the national launch of the H2City industry model and KPMG’s ‘Hydrogen Communities – Assessment of Suitability of Communities for Conversion to Hydrogen’ Report. The report is being launched today and its application will be demonstrated during the All Energy Australia Conference at the Melbourne Conference and Exhibition Centre 23-24 October 2019.

H2City is the result of a four-way collaboration between KPMG, ATCO, CSIRO, together with Australian Renewable Energy Agency (ARENA). These entities worked together to develop a tool that can be used to assess the costs and benefits of regional town or municipality switching to hydrogen.

“The H2City Tool is the first of its kind to calculate the break-even point when a hydrogen pathway is competitive with an electrification pathway in order to provide energy to a community,” said James Arnott, KPMG Partner and WA Management Consulting Lead. “While it is sophisticated, it contains relevant cost and performance data provided by the CSIRO – as well as publicly sourced data – and it significantly advances the Australian hydrogen debate in a practical way.”

Darren Miller, CEO ARENA, also recognised the benefits of the H2City Tool.

“H2City is an open source tool to assess the cost benefit and commercial feasibility of switching to renewable hydrogen at a municipal-scale. This will help the hydrogen industry, gas networks and energy developers and local communities to think about hydrogen, and will help us to accelerate Australia’s hydrogen industry, which is one of our investment priorities,” said Mr Miller. “Green hydrogen offers a major opportunity to provide carbon-free energy to cities and towns, while leveraging existing natural gas infrastructure.”

In addition, co-collaborator and leading energy infrastructure provider ATCO, says the Australian gas sector – which includes hydrogen – is a vital part of securing a clean energy future.

“ATCO believes Australia’s gas distribution networks will play a key role in the future energy mix," said Stevan Green, President of ATCO’s Australian Gas Division. “Beyond natural gas, the gas network has the potential to store and deliver ‘clean’ hydrogen, and to play a central role in reducing energy costs and carbon emissions.”

Mr Green said the H2City Tool and Assessment Framework would provide the screening framework needed to support the business case at which point hydrogen becomes a significant viable part of Australia’s low carbon energy future.

KPMG’s James Arnott also pointed to research from the International Energy Agency (IEA) analysis that found the cost of producing hydrogen from renewable electricity could fall 30 percent by 2030 as a result of declining costs of renewables and the scaling up of hydrogen production.

KPMG noted that governments around the world were signalling interest in moving the hydrogen economy forward. Australia was no exception having already progressed a number of local initiatives and investments in the hydrogen economy.

“Following CSIRO’s National Hydrogen Roadmap, and in addition to our ongoing research program, we are pleased to provide data to support the collaborative development of the H2City Tool,” said Jenny Hayward, Senior Research Scientist at CSIRO Energy

Stakeholders who could benefit from the H2City Tool include the energy industry participants, government, transport and infrastructure agencies, developers and policy makers. Access to the tool is via ARENA website.

About H2City

The H2City Total Cost of Ownership Model (H2City Tool) and multi-criteria assessment framework provides a platform to support energy industry participants, government, transport and infrastructure agencies, developers and policy makers in assessing potential communities suitable for transitioning to a hydrogen-based energy future.

The H2City Tool includes over 200 input drivers that can be used to determine preparedness for a potential transition to hydrogen-based energy. Both qualitative and quantitative assessments and data inputs are gathered in areas that include: demand, production, storage and transport, local infrastructure, end use, regulatory policy and legislation, climate policy, and social benefits. These inputs are used to contrast a hydrogen vs electrification solution for a community.


The Australian Renewable Energy Agency (ARENA) invests in projects to accelerate Australia’s shift to affordable reliable renewable energy. We do this by funding projects and sharing knowledge that drives innovation and commercialisation of renewable energy technologies.

About ATCO

With approximately 6,000 employees and assets of CAD $24 billion, ATCO is a diversified global corporation delivering service excellence and innovative business solutions in Structures & Logistics (workforce housing, innovative modular facilities, construction, site support services, and logistics and operations management); Electricity (electricity generation, transmission, and distribution); Pipelines & Liquids (natural gas transmission, distribution and infrastructure development, energy storage, and industrial water solutions); and Retail Energy (electricity and natural gas retail sales).

In Australia, ATCO owns and operates two gas-fired power stations, Western Australia’s largest natural gas distribution network, and provides structures and logistics materials and expertise.

ATCO’s Clean Energy Innovation Hub had a total project cost of $3.9M including a $1.7M grant from the Australian Renewable Energy Agency (ARENA). The research facility was established to investigate the potential role of hydrogen in the future energy mix – and as a test bed for microgrids enabled by gas technology, integrating with solar and batteries.

For further information

Marjorie Johnston
0407 329 430

© 2020 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Liability limited by a scheme approved under Professional Standards Legislation.

KPMG International Cooperative (“KPMG International”) is a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.

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