The government is a majority investor in three facilities that hope to use green hydrogen to make ammonia and augment natural gas.
Efforts by major energy incumbents to produce green hydrogen at commercial scale have attracted government funding to get off the ground.
The Australian Renewable Energy Agency (ARENA) has conditionally approved $103.3 million towards three commercial-scale renewable hydrogen projects, as part of its Renewable Hydrogen Deployment Funding Round.
Engie Renewables Australia will receive $42.5 million towards a 10MW electrolyser project to produce renewable hydrogen in a consortium with Yara Pilbara Fertilisers at an existing ammonia facility in Karratha, Western Australia.
ATCO Australia will get up to $28.7 million towards a 10MW electrolyser for gas blending at its Clean Energy Innovation Park in Warradarge, Western Australia.
Australian Gas Networks will receive up to $32.1 million in funding for a 10MW electrolyser for gas blending at AGIG’s Murray Valley Hydrogen Park in Wodonga, Victoria (artist’s impression pictured above).
The funding offer started at $70 million but received a $33.3 million boost. The three projects are worth $161 million, leaving 35% of funding to be sourced privately.
At 10MW, the electrolysers in these hydrogen plants will be among the largest in the world and play a significant role in progressing commercial-scale renewable hydrogen production towards the Australian government’s goal of “H2 under $2” per kilogram.
Engie will use renewable hydrogen to produce ammonia at the Yara Pilbara Fertilisers site, while ATCO and AGIG’s projects will use renewable energy to produce renewable hydrogen for gas blending into existing natural gas pipelines.
The funding round was launched last year to support the development of renewable hydrogen in Australia, with ARENA calling for expressions of interest from large-scale electrolyser projects. Seven projects were shortlisted from 36 applications.
Engie, ATCO and AGIG will need to satisfy development conditions and achieve financial close before ARENA funding is released.
“We’re excited to have chosen three projects we believe will help kickstart renewable hydrogen production in Australia at a large scale,” said ARENA chief executive Darren Miller. “Our hydrogen industry in Australia is in its infancy, so the lessons learned from these three projects – and the entire funding round – will be important in driving our future hydrogen economy.
“With more than $100 million in funding, we’re hoping to build some of the biggest hydrogen electrolysers in the world, with the ultimate goal of bringing down the cost of hydrogen produced using renewable energy and growing our skills and capacity to meet future global demand for hydrogen.”
ARENA has committed over $57 million to hydrogen projects since 2016, including $22.1 million towards 16 R&D projects.
A lighter blend
ATCO and Australian Gas Infrastructure Group’s Clean Energy Innovation Park will be co-located with the 180MW Warradarge Wind Farm in Western Australia’s Mid-West region. The plant will be capable of producing up to four tonnes of hydrogen a day, which will be trucked to gas network injection points.
The Australian Gas Infrastructure Group was also successful in a joint submission with Engie, to work on a hydrogen blending project in Wodonga, Victoria. The Hydrogen Park Murray Valley will use renewable electricity to produce hydrogen from mid-2023, to make up to 10% of the existing natural gas network to supply residential, commercial and industrial customers in Wodonga and Albury, NSW.
“We’ve been investing in hydrogen since 2017 and are strong believers in its value as we strive towards a cleaner energy future,” said ATCO Australia managing director and COO Patrick Creaghan.
“The Clean Energy Innovation Park has the dual benefit of not only contributing to the decarbonisation of the gas distribution network, it also allows us to generate the economies of scale required to expand the demand and use of renewable hydrogen as a commercially viable fuel.”