39 min
De-mystifying economic policy for Hydrogen – “The 5 Levers” with GHD Exploring Hydrogen
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- Technology
De-mystifying economic policy for Hydrogen – “The 5 Levers”, with GHD
Introduction to Ariel:
Ariel Elboim a Senior Advisor for GHD working in the future energy market. A consultant for 10 years, Ariel has worked on the decarbonisation of infrastructure, and renewable energy projects across various sectors, including energy, water and transport. For the past 5 years, his focus has been dedicated to accelerating the growth of the hydrogen industry in Australia. He plays an active role not only through his project work for both private and public clients but also through his engagement with industry, including his position as H2Q Hydrogen Queensland Policy Advocacy Taskforce Lead.
1.45 - About GHD & Ariel's work
GHD is a globally recognised organisation operating in the markets of engineering, architecture, digital, water, energy, environment, and transport. Above 11,000 employees across 5 continents and 120+ offices.
Over the last 4 years, Ariel has been working holistically to accelerate the growth of the hydrogen industry in Australia, and that's been looking at strategic, tactical, operational projects, and more recently, at policy and policy mechanisms and how they can be conducive to the growth of the industry in Australia.
3.00 - The work H2Q Hydrogen Queensland is doing to help translate what industry sentiment is and how that can help inform government policy. They have been doing a lot of engagement and report writing over the last year with a white paper that was released over Christmas.
4.15 -Summary of the 5 levers & examples around the world
Lever # 1 - Tax Regulation
What can the government do in terms of regulatory standards and requirements to influence proponent behaviour, and what kind of tax levers can they use to influence taxpayers' behaviour?
Regulatory standards and requirements that the government can implement to influence behaviour, or what kind of tax incentives or penalties can the government implement to also influence behaviour?
06.00 - Carbon prices around the world & the Safeguard Mechanism
08.20 - Lever #2 - Tax credits & subsidies
Tax credits and subsidies are an incentive-based policy instrument that provides market-compatible forms of direct government intervention.
09.00 - U. S. Inflation Reduction Act
This offers a tax credit of up to $3 per kilogram of hydrogen produced. That $3 per kilogram is based on the carbon intensity of the product.
10.06 - What can Australia do, even without having such ‘deep pockets’ as the US?
11.20 - Lever #3 - Market based schemes
Market-based schemes are interesting because they're an amalgamation of different mechanisms and they usually consist of a pull mechanism or a lever that tries to pull investment into the market, and a push mechanism, so it pushes proponents to do something.
12.30 - Lever # 4 - Contracts for Difference
This lever is getting a lot of attention across the world at the minute, especially in the hydrogen space. CFDs, Contracts for Differences, are financial contracts between a supplier and a purchaser of energy, provided a certain price. The Contract for Difference stipulates that the purchaser will pay the seller the difference between the market value at the time of contracting.
Essentially a market price is agreed upon, usually called the strike price, and this is based on several factors. It could be the level of CO2 emissions that are being abated. It could be the cost of the fossil fuel plus a green premium, whatever the market decides is a strike price, but everyone agrees that's the baseline.
14.45 - Review periods for Contracts for Difference
"Contracts for Difference usually last for about 10, 12, 15 years and by that point, the market will have readjusted to an equilibrium. And then you reassess it."
17.00 - "The biggest issue in the hydrogen space at the minute and the reason projects aren't getting past FID, or to FID, is because the prem
De-mystifying economic policy for Hydrogen – “The 5 Levers”, with GHD
Introduction to Ariel:
Ariel Elboim a Senior Advisor for GHD working in the future energy market. A consultant for 10 years, Ariel has worked on the decarbonisation of infrastructure, and renewable energy projects across various sectors, including energy, water and transport. For the past 5 years, his focus has been dedicated to accelerating the growth of the hydrogen industry in Australia. He plays an active role not only through his project work for both private and public clients but also through his engagement with industry, including his position as H2Q Hydrogen Queensland Policy Advocacy Taskforce Lead.
1.45 - About GHD & Ariel's work
GHD is a globally recognised organisation operating in the markets of engineering, architecture, digital, water, energy, environment, and transport. Above 11,000 employees across 5 continents and 120+ offices.
Over the last 4 years, Ariel has been working holistically to accelerate the growth of the hydrogen industry in Australia, and that's been looking at strategic, tactical, operational projects, and more recently, at policy and policy mechanisms and how they can be conducive to the growth of the industry in Australia.
3.00 - The work H2Q Hydrogen Queensland is doing to help translate what industry sentiment is and how that can help inform government policy. They have been doing a lot of engagement and report writing over the last year with a white paper that was released over Christmas.
4.15 -Summary of the 5 levers & examples around the world
Lever # 1 - Tax Regulation
What can the government do in terms of regulatory standards and requirements to influence proponent behaviour, and what kind of tax levers can they use to influence taxpayers' behaviour?
Regulatory standards and requirements that the government can implement to influence behaviour, or what kind of tax incentives or penalties can the government implement to also influence behaviour?
06.00 - Carbon prices around the world & the Safeguard Mechanism
08.20 - Lever #2 - Tax credits & subsidies
Tax credits and subsidies are an incentive-based policy instrument that provides market-compatible forms of direct government intervention.
09.00 - U. S. Inflation Reduction Act
This offers a tax credit of up to $3 per kilogram of hydrogen produced. That $3 per kilogram is based on the carbon intensity of the product.
10.06 - What can Australia do, even without having such ‘deep pockets’ as the US?
11.20 - Lever #3 - Market based schemes
Market-based schemes are interesting because they're an amalgamation of different mechanisms and they usually consist of a pull mechanism or a lever that tries to pull investment into the market, and a push mechanism, so it pushes proponents to do something.
12.30 - Lever # 4 - Contracts for Difference
This lever is getting a lot of attention across the world at the minute, especially in the hydrogen space. CFDs, Contracts for Differences, are financial contracts between a supplier and a purchaser of energy, provided a certain price. The Contract for Difference stipulates that the purchaser will pay the seller the difference between the market value at the time of contracting.
Essentially a market price is agreed upon, usually called the strike price, and this is based on several factors. It could be the level of CO2 emissions that are being abated. It could be the cost of the fossil fuel plus a green premium, whatever the market decides is a strike price, but everyone agrees that's the baseline.
14.45 - Review periods for Contracts for Difference
"Contracts for Difference usually last for about 10, 12, 15 years and by that point, the market will have readjusted to an equilibrium. And then you reassess it."
17.00 - "The biggest issue in the hydrogen space at the minute and the reason projects aren't getting past FID, or to FID, is because the prem
39 min