Picture: Alix Sweeney
Picture: Alix Sweeney

Hydrogen energy could be the future of the Surat Basin

A NUMBER of renewable hydrogen projects worth more than $3 billion are vying for funding from the Australian Renewable Energy Agency (ARENA) to build the first commercial scale hydrogen projects in the country.

ARENA opened the $70 million Renewable Hydrogen Deployment Funding Round in April to help fast track the development of renewable hydrogen in Australia.

They have so far received 36 expressions of interest in the funding round.

ARENA CEO Darren Miller is excited that there is a broad interest in renewable hydrogen.

“This is an important step for the sector and it looks like we have many companies now ready to start building large scale renewable hydrogen projects across a range of industries and end uses” he said.

“The fact that we’ve received expressions of interest for projects totalling over $3 billion in cost and almost 500MW in size shows that we’re beginning to see companies embrace making hydrogen through renewable means.

“While we’re only at the early stages of renewable hydrogen production in Australia, much like our role in making large scale solar competitive, ARENA aims to help bring down the cost of hydrogen, build Australia’s skills and capacity, create jobs and activity in regional areas and help Australia achieve our emissions reduction objectives.”

The funding round is expected to play a significant role in supporting commercial-scale deployments of renewable hydrogen in Australia and commence the pathway to achieving the Australian Government’s goal of ‘H2 under $2’.

Through the funding round, ARENA aims to support two or more large scale renewable hydrogen projects, with electrolysers of a minimum 5MW capacity and with a preference for 10MW or larger.

These projects will be expected to be among some of the largest electrolysers in the world.

An overview of the expressions of interest received includes:

  • Over $1 billion in total grant requests
  • Over $3 billion in total combined project value when you account for private sector investment in the EOIs
  • Almost 500MW of electrolysis capacity, with the size of projects ranging from 5MW to nearly 80MW
  • A wide range of demand or end use case applications
  • Expression of interest applications from every state and territory in Australia

Each project will need to be powered by renewable electricity, either directly or through a contracting approach.

Projects selected in the funding round can also be considered for further financing from the Clean Energy Finance Corporation (CEFC) under the CEFC’s $300 million Advancing Hydrogen Fund.

ARENA will now assess the expressions of interest and invite short-listed projects to submit a full application, with the aim of awarding funding by the end of 2020.

The funding round follows the release of the National Hydrogen Strategy last year and is in line with the Australian Government’s focus on growing an innovative, safe and competitive hydrogen industry.

The funding round will also help to stimulate jobs and economic growth through the application stage of the round as well as the construction and ongoing operation.

ARENA has already committed over $55 million in funding for renewable hydrogen including $22.1 million towards R&D projects, as well as feasibility studies into large scale projects and smaller scale demonstrations looking at renewable ammonia, power to gas and hydrogen mobility.

“Preliminary feasibility outcomes indicate there is a significant commercial gap and it is expected that grant and concessional funding will be required for hydrogen production facilities in the short to medium term,” Mr Miller said.

Toowoomba and Surat Basin energy and infrastructure general manager Lance MacManus said it’s still not known if the Darling Downs will receive any of the funding.

“If an application from our region was to be successful in receiving funding, our region could be home to a large-scale renewable hydrogen project,” he said.

“Our region has proven that we are a strong energy hub.

“While we aren’t aware of any hydrogen energy projects in the pipeline for the Darling Downs or South West, existing energy infrastructure and renewable energy projects could look at developing hydrogen from existing infrastructure.”

The hydrogen industry is expected to be used to expand the renewable energy industry and could be a viable option for energy production in the regions.

“These types of projects could leverage off regional energy infrastructure and ensure longevity of regional energy production assets that have already been built.

“As we move toward a transition of commercial renewable production, the commercial establishment of next generation energy production such as battery storage, bioenergy and forms of hydrogen production will help ensure the Surat’s title of energy production capital of Australia for decades to come.”

Mr MacManus said the existing gas industry’s supply chain can be used to serve as a platform for hydrogen.

It is expected to store energy used from solar and wind farms.

He said the industry is expected to earn $1.7 billion from exports annually be 2030.

“Hydrogen energy is certainly a viable option to complement wind and solar.

“While our region continues to harness renewable capacity, with an array of wind and solar farms, adding hydrogen to our local sector will act as an essential integrator, utilising excess power generation, supporting intermittent supply and demand, and aiding a clean, resourceful and sustainable energy system.”

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