Prime Minister Albanese has promised $1 billion of your money to manufacture solar panels in Australia that you could buy at a fraction of the price from China. This is at a time when subsidies for solar panels will decline because the market is saturated. In addition, the investment in large-scale solar farms has collapsed because, as Alinta CEO Jeff Dimery said, while net zero emissions of CO2 is the goal, it cannot be achieved with net zero profits, which is a likely scenario in the energy market.

Albanese is promising a similar amount with the (outgoing) Queensland government on quantum computing, one of the uses being to investigate climate change. They may discover that it is bogus. Toby Walsh, Scientia, Professor of Artificial Intelligence at UNSW, commented that the Albanese monies to PsiQuantam were secretive and ‘outrageous’ and that they add to the funds received from the UK government to build a facility there. Of course, as with all other lobbyists for government preferment, Walsh wants Albanese to give substantial funds to AI.

The generally Labor sympathetic economist John Quiggin of the University of Queensland rightly pointed out that each of these ‘bets’ has an opportunity cost – money spent on one thing cannot be spent on another. In addition to the above, building an entirely new electricity distribution system, when one exists, for an unstable electricity generating system built on too many renewables draws materials and a skilled workforce away from housing construction at the time migrants are pouring in.

But this madness pales into insignificance when compared to green hydrogen—hydrogen created by renewable energy. Minister Chris Bowen gave a speech in 2023 in Japan titled ‘Australia as a Renewable Energy Superpower’. He noted Japan’s ‘Hydrogen-Based Society’ commitment and said that Australia has a ‘$300 billion pipeline of proposed hydrogen projects in Australia—the biggest pipeline in the world.’

Australia has shipped liquified hydrogen to Japan. Angus Taylor, then Coalition minister, proudly announced in 2022 that Australia was sending the world’s first shipment of liquified hydrogen to Japan. The project was the first to extract, liquefy, and transport liquid hydrogen by sea to an international market. A problem with that shipment was the energy source used to create the hydrogen. The Taylor shipment was partly brown coal from Loy Yang, which is not greenhouse-friendly—brown hydrogen. Neither is blue hydrogen, which uses natural gas to produce hydrogen. The goal is to generate hydrogen from renewable sources such as wind and solar—green hydrogen.

Rod Sims, chair of the Superpower Institute, is also lining up for government largesse. He argues that renewable energy is not easily exported, so greenhouse-emitting industries not readily abated elsewhere should be manufactured in Australia using our minerals and renewably generated hydrogen. ‘Green’ hydrogen from electrolysis will replace emission-intensive activities in the ‘zero fossil’ carbon economy. He also suggests that methanol made from green hydrogen and biomass will provide zero-emission fuel for shipping.

Let’s pour some cold water on this dream of shipping hydrogen (and hydrogen energy manufacturing in Australia). The inimitable economist and engineer Stephen Wilson explains why the green hydrogen scheme is going to bomb: because its customers can do it themselves.

‘The production and supply chain to turn land, capital, labour, sunshine, breezes, and seawater into electricity, hydrogen, ammonia for export, reconversion to hydrogen, and back to electricity does not make sense.’ The same economics and engineering analyses will hold for the export of liquified hydrogen.

Wilson explains the primary problem: ‘green’ hydrogen will have to compete with other carbon-free hydrogen production, especially so-called ‘pink’ hydrogen made from nuclear energy.

Australia’s likely customers for hydrogen exports, such as Japan, can make the hydrogen they need where they need it from nuclear energy—methanol or no methanol for transport.

When the Japanese realise that they can make hydrogen from nuclear energy more cheaply than they can import green hydrogen from Australia, they may also realise that if they have electricity from a nuclear power plant, they will not need to turn it into hydrogen, store it, move it, and then turn it back into electricity again.

The Albanese government looks more like the Whitlam government of 1972-1975— all whimsy and ideology. At the next election, Labor will likely fall into a minority government, relying on Greens and Teals.

They will no doubt press ahead with the entire green energy dream. It is going to bomb.

Gary Johns is chair of Close the Gap Research