Australia selects six projects to kickstart green hydrogen industry

AUSTRALIA has shortlisted six large-scale electrolysis projects under a A$2bn (US$1.34bn) scheme to decarbonise heavy industry and become a leader in green hydrogen production and exports.

The selected projects include the 1,625 MW Murchison project that would produce hydrogen for ammonia in Western Australia and the 750 MW Kepco Australia facility that again would be used for ammonia production at the Port of Newcastle in New South Wales.

The shortlisted applicants have until 27 June to submit a full application with the government expected to announce its final decision on who gets funding from the Hydrogen Headstart programme by the end of the year.

Dan Miller, CEO of the Australian Renewable Energy Agency (ARENA), which is running the scheme, said: “Hydrogen Headstart is a crucial step towards keeping Australia on the path to become a global hydrogen leader, creating new export opportunities, while helping to decarbonise our economy.”

The government set tight limitations on who could apply, ruling out any hydrogen production from fossil fuels, which drew the ire of the country’s powerful coal sector. All applicant projects had to produce hydrogen entirely from electrolysis and be 100% powered by renewable energy. And they had to be at least 50 MW in capacity and located at a single site.

Governments around the world are pushing to use clean-burning hydrogen to decarbonise existing industry and take a leading position in new green technologies that can be sold globally. It can be burned to produce industrial heat or as a fuel for heavy transport, and as greener feedstock for the chemicals sector.

All but one of the shortlisted projects plan to use hydrogen to produce ammonia which can be shipped around the world and transformed back into hydrogen at point of use. This would open the door to Australia using its vast potential for solar and wind energy to create a hydrogen export industry.

The other four shortlisted projects are BP’s 105 MW H2Kwinana project in Western Australia; Origin Energy’s 200 MW Hunter Valley project in New South Wales; Stanwell’s 720 MW Central Queensland project; and the 144 MW HIF Tasmania facility which would produce hydrogen and react with CO2 from plant biomass to produce carbon neutral vehicle fuel. The government has not confirmed how many projects will win support – only that a “small number” will receive funding.

Under the rules of the funding programme, the Australian government will cover the additional cost of producing green hydrogen compared to market price for hydrogen. The winning projects must also publicly share knowledge from their projects to help accelerate the country’s hydrogen industry.

Separately, Australia has also committed half a billion dollars to develop regional hydrogen hubs.