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Contact Energy welcomes Hydrogen study

Contact Energy welcomes the release of a study today into the use of hydrogen as a way of storing and transporting energy.

To better understand the role that hydrogen could play, Contact, along with Meridian, Powerco, First Gas, the Ministry for Business, Innovation and Employment (MBIE) and the Energy Efficiency and Conservation Authority (EECA) co-sponsored a study carried out by Concept Consulting.

The study - the second of three reports that have been released - compares the cost effectiveness of hydrogen to alternative means of decarbonising the New Zealand economy, with a focus on transport, industrial process heat, space, and water heating, and power generation.

The study concludes that right now, New Zealand’s low carbon electricity is a lower cost option than hydrogen for those looking to convert their transport or process heat away from fossil fuels.

Contact Energy’s Chief Generation and Development Officer, James Kilty, welcomed the report and said it showed that the best option for the majority of customers currently using fossil fuels for process heat and transport, was to switch to renewable electricity.

He said Contact was committed to New Zealand’s decarbonisation objective and that “a key part of this is for us to look at ways to reduce the cost of renewable energy and to support customers to convert to low-carbon electricity.”

“While the costs of hydrogen don’t quite stack up for mainstream use, it’s promising to see there is the potential for hydrogen to be competitive in some niche applications especially where electrification isn’t suitable to replace combustible fuel. These include 24/7 on-site freight-loading operations, and meeting energy demand for remote off-grid locations.”

Mr Kilty said it was pleasing to note that hydrogen may have a wider role to play in the future as technological improvements would see the cost of producing hydrogen reduce.

“We are committed to reviewing all low-carbon options, and understanding the conditions that would lead to hydrogen playing a key role in reducing New Zealand’s greenhouse gas emissions in the longer term.”

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