A few years ago, I much enjoyed reading (although certainly didn't always agree with) Jeremy Rifkin's book, "The Hydrogen Economy". One part though that stuck in my mind was his reference to hydrogen from wind powered electrolysis. On page 189 of the paperback edition he said:

"When wind power drops to 1.5 cents per kilowatt hour in the next few years, electrically generated hydrogen, using wind power, will be competitive with gasoline."

5 years on, wind power prices - as measured by the installed cost per megawatt - have actually gone up. And even with one of the best sites and the lowest possible installation costs, the levelised cost per kilowatt hour over a 20 year period is still pretty much 5 cents per kilowatt hour, excluding all other externalities (additional transmission lines, grid-reinforcing, load-balancing, avian mortality rates, etc. . . . all of which rise with an increased wind penetration). From today's standpoint, 1.5 cents a kilowatt hour looks a very long way off.

But the concept is still alive.

That's why I was intrigued and very grateful to learn from an AEI reader based in New Zealand of a new company seeking to IPO on the Australian Stock Exchange next month (10th August), called Wind Hydrogen Ltd.

The company says it holds international patents over hydrogen-based technology that is complementary to wind power generation, able to overcome the issue of variable output from wind farms, considered a key long-term barrier to the commercialisation of wind power. They also believe their technology opens access to markets for hydrogen and hydrogen-based products. This last bit is important - they think they can sell off the surplus hydrogen to downsteam chemical companies who would otherwise take it from natural gas, releasing CO2, for the production of ammonia.

What I found particularly interesting though is that they have patents pending on wind monitoring and prediction. Combine accurate wind forecasting to an electricity spot market in short supply of power and very quickly you could get a profitable business model.

But hydrogen has to be most expensive form of energy storage so they are dependent - and I suspect taking a bet on - rising and unpredictable gas prices affecting the electricity and chemical industries. Meanwhile, Hydrogenics has just opened a wind-powered hydrogen fuelling station in Dakota.

Wind Hydrogen is definitely a company to watch. Still, the cynic in me thinks if this energy storage is so good, why not combine their storage technology with a fully amortised and rainfall-deprived hydro power plant?

This would be a lot cheaper - and more profitable, as well as renewable.