Hydrogen Valley planned for Aussie coal country

A CONSORTIUM has outlined proposals to create a ‘hydrogen valley’ in the Hunter Valley region of New South Wales in Australia, that would help pioneer clean energy and feedstocks in place of the region’s coal industry.  

Beginning next year, stage one of the Hunter Hydrogen Network project would involve repurposing the Muswellbrook coal mine. The project would build an electrolyser at the site that would be powered by wind and solar. It would begin to produce hydrogen by the end of 2024 for use as feedstock and to power mining activities and vehicles in the Upper Hunter Valley region. This would involve building a pipeline to transport the hydrogen south to Liddell, home to AGL’s coal-fired power plant.

Plans to shut down the Liddell plant by 2023 are forcing regional coal mines to close. Muswellbrook’s owners are already undertaking a feasibility study into repurposing the mine for pumped hydro.

A second stage starting in 2022 would involve building more electrolysers at Liddell, and a pipeline to carry hydrogen down through the Lower Hunter Valley region to Newcastle where it could be used to produce chemicals, burned in plants to generate power, and converted into ammonia for export as a liquid fuel.

The consortium includes AGL, electrolyser manufacturer ITM Power, renewables developers RES Australia and Walcha Energy. The project is coordinated by energy advisory firm Energy Estate.

Energy Estate Principal Vincent Dwyer said: “A hydrogen economy and thriving supply chain in the Hunter has the potential to support local industry and workers into the jobs of the future and positions the Hunter in the race to be one of Australia’s leading renewable energy exporters.”

The company has yet to respond to requests on the value of the deal, which The Guardian reports is worth A$2bn (US$1.55bn); or whether the consortium is seeking support from the Government to progress its plans.

The Australian Government has committed to funding five hydrogen hubs. In 2019, it published a National Hydrogen Strategy and went on to earmark A$70m last year to build a hydrogen export hub, and a then a further A$275.5m was announced this year for another four hubs.

Separately, the government has awarded A$103.3m through the Australian Renewable Energy Agency’s (ARENA) Renewable Hydrogen Deployment Funding Round to build three 10 MW electrolysers.

Engie Renewables has been awarded A$42.5m towards an electrolyser that will produce hydrogen for use in Yara Pilbara Fertiliser’s existing ammonia plant in Karratha, Western Australia. ATCO has A$28.7m to produce hydrogen for gas blending at its clean energy innovation park in Warradarge, Western Australia. And Australian Gas Networks (AGIG) was awarded A$32.1m for gas blending at its Murray Valley Hydrogen Park in Wodonga, Victoria.

Minister for Energy and Emissions Reduction Angus Taylor said: “These projects show how our existing ammonia industry and gas pipeline network will be crucial to the future clean hydrogen sector. This will be key to bringing down cost of renewable hydrogen production and distribution.”

The government has set a target of producing hydrogen at a cost of A$2/kg.

“That’s the point where hydrogen becomes competitive with alternatives in large-scale deployment across our energy systems,” Taylor said, last year.

Speaking at the Clean Energy Council’s All Energy Conference last year, ARENA CEO Darren Miller said including capital investment, electrolysis today can produce hydrogen at A$6–9/kg. To achieve the A$2 target, he said electrolyser costs will need to fall from between A$2m–$3m/MW to A$0.5m/MW and the cost of electricity from solar and wind will need to nearly halve.