91É«ÇéƬ

As Australia invests in green hydrogen, AI and other emerging industries, competition for water is expected to grow.

Lydia Zhang, a PhD candidate in 91É«ÇéƬ’s School of Chemical Engineering, has developed a new framework to help decision-makers understand how climate affects water allocation, supporting better long-term planning for Australia's energy transition.

A recent proposal to use irrigation water to cool an AI data centre in Tasmania has reignited debate about how Australia should manage one of its most valuable resources.

As industries such as green hydrogen and artificial intelligence continue to expand, they will increasingly compete with agriculture, communities and the environment for access to limited freshwater.

For Zhang, this debate highlights a much bigger challenge. Rather than asking whether a new industry should receive water, she believes Australia needs better evidence to decide when, where and under what conditions water should be shared.

"Future debates should not simply ask, 'How much water does this industry use?'" Zhang says. "They should ask, 'What is the best use of this limited water under an uncertain climate?'"

That question sits at the heart of her research.

Looking beyond the coast

Green hydrogen is expected to play a major role in Australia's transition to a low-carbon economy. Produced using renewable electricity and water, it could help reduce emissions from industries that are difficult to electrify, including long-distance freight transport.

When Zhang first became interested in green hydrogen, most discussions focused on large coastal projects, where seawater can be desalinated.

But while reading about the future of hydrogen-powered heavy vehicles, she realised something was missing.

"If hydrogen is going to support transport across Australia, we can't rely only on coastal hydrogen hubs," Zhang says. "We also need hydrogen production in inland regions, where renewable energy resources are often even better."

Unlike coastal regions, inland Australia depends on regulated freshwater that is already shared by agriculture, mining, local communities and the environment.

"What surprised me was that although many studies discussed hydrogen's water demand, I couldn't find a framework that actually evaluated how water should be allocated between competing sectors," she says. "That unanswered question became the starting point of my PhD."

A new way to think about water

To answer that question, Zhang developed a new decision-making framework that combines engineering, economics, climate science and Australia's water allocation system. Existing studies have examined many of these issues separately, but her research brings them together to better understand how competing demands for water change over time.

The framework tests thousands of possible future scenarios, helping reveal how changing climate conditions could affect both green hydrogen production and irrigated agriculture.

This is important because Australia's climate is far from predictable.

Many planning approaches assume average weather conditions. Zhang's research instead considers droughts, wetter years and changing economic conditions, providing a more realistic picture of the trade-offs involved before governments and industry make long-term investment and water allocation decisions.

It's not just about how much water is used

One of the biggest surprises from Zhang's research challenged a common assumption.

"Green hydrogen is often described as a water-intensive industry, but our research found that a typical inland hydrogen plant would use less than one per cent of the irrigation water currently used by cotton in the study region," she says.

Instead, her research found that the bigger challenge isn't the amount of water being used. It's how the value of that water changes.

During dry El Niño years, Australia typically experiences more sunshine, making renewable hydrogen cheaper to produce while agricultural returns tend to decline. During wetter La Niña years, the opposite happens. Farming becomes more productive, making irrigation water more valuable.

The same amount of water can therefore create very different economic and social benefits depending on the climate.

"The real challenge isn't how much physical water hydrogen uses," Zhang says. "It's how the value of that water changes. Climate can completely change the economics of water allocation."

Supporting better decisions

Although Zhang's published research focuses on green hydrogen, she believes the same approach can help governments evaluate other emerging industries competing for water and electricity, including AI data centres.

Rather than suggesting one industry should always take priority over another, her research provides a way to better understand the risks and trade-offs before decisions are made.

"I hope my research provides evidence that helps decision-makers better understand the value that water creates in different sectors before making allocation decisions," Zhang says.

"Rather than simply transferring water from one industry to another, we need to understand the broader economic, environmental and social impacts." The next stage of Zhang's research will expand the framework beyond agriculture to compare hydrogen, AI data centres and other emerging industries, while exploring future climate scenarios and policies that could reduce competition for both water and electricity.