Palisade Investment Partners has joined a consortium to explore the development of hydrogen fuel cell-powered electric buses in Australia.
The Sydney-headquartered fund manager said it has signed a memorandum of understanding with four partners in an initial step that it hopes will lead to wider development of hydrogen fuel cells in the country.
Its partners in the H2OzBus project consortium are: Ballard Power Systems, which will supply the fuel cell system that will be integrated into electric buses; gas supplier and equipment provider BOC; hydrogen energy solutions manufacturer ITM Power, which will work with BOC to provide hydrogen production and refuelling infrastructure; and Transit Systems, a subsidiary of SeaLink Travel Group that is one of Australia’s largest private bus operators with operations in Sydney, Melbourne, Brisbane, Perth and Darwin.
Palisade will provide funding and strategic financial oversight for the project. Managing director and chief executive Roger Lloyd told Infrastructure Investor the agreement has not seen any costs borne by Palisade yet, and that the investment could sit within any of its three funds – the Diversified Infrastructure Fund, the Australian Social Infrastructure Fund, or the Renewable Energy Fund – depending on how it is eventually structured.
“At the moment it spans the three funds. It fits in the renewables bucket as [hydrogen] is a renewable energy source – it’s just another type of battery in a way,” Lloyd said.
“We’re keen to work with the Clean Energy Finance Corporation, which is one of our investor clients, as they’ve just set up a fund around hydrogen as well.
“You’ve also got potentially very strong government contracts that would sit within the diversified fund or with our direct investment mandates.”
Lloyd said Palisade had been searching for opportunities in hydrogen for a few years and that the firm was “very keen” on exploring it as a “fuel source for the future”.
“There’s been so much talk, particularly over the last year, about the new hydrogen economy and the potential for [Australia] to be a big hydrogen generator over the long term. There are markets out there, particularly on our side of the planet with Japan and Korea, who are big supporters of hydrogen,” he said.
“Unfortunately, it’s not cost-effective at the moment to talk about large-scale production of hydrogen, but there are certain places where it can make sense as a replacement for high-cost fuel, like diesel.”
The consortium will collaborate initially on securing contracts to deploy at least 100 hydrogen fuel cell-powered buses throughout Australia in the first phase of the agreement over the next 12 months, with the intention that this will seed a wider roll-out.
“If we get to 100-plus, this becomes worthwhile – and you start to get to the point where the price of equipment comes down and you won’t need as many government subsidies, and so on,” he said.
“It’s been proven elsewhere that you can run buses on hydrogen and that the refuelling equipment does exist. So, it’s about bringing all those bits together and trialling it on a relatively small scale with 100 buses to get the ball rolling.”
The Australian federal government has been pushing the development of the hydrogen industry in the past year, with the CEFC earlier this year receiving a new A$300 million ($199 million; €180 million) mandate to establish its Advancing Hydrogen Fund, which it said would be used “to support the growth of a clean, innovative, safe and competitive” hydrogen industry.