Policy

Hydrogen Headstart | More than 3.5GW of Australian green H2 projects shortlisted for $1.35bn of subsidies

BP and Kepco among developers in line to receive production credits to cover the cost gap between green and grey H2

Artist's impression of the H2Kwinana project (left) and BP's wider Kwinana energy hub.
Artist's impression of the H2Kwinana project (left) and BP's wider Kwinana energy hub.Photo: BP

Six green hydrogen projects totalling more than 3.5GW of capacity have been shortlisted for A$2bn ($1.35bn) of subsidies under Australia’s Hydrogen Headstart programme.

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The eventual winners, due to be announced in late 2024, will receive “hydrogen production credits” (HPCs) in the form of quarterly grants for a period of ten years, starting in 2027.

There is no set rate for the HPC — developers have nominated a dollar value per kilogram of hydrogen (or one of its derivatives), which is supposed to represent the gap between green and grey H2. They have also had to submit “forecast lifetime production volume” for their projects, thus setting a maximum amount of funding.

The six nominated projects are (in order of size of electrolyser):

1) Murchison Hydrogen Renewables Project (1,625MW)

Developer: Murchison Hydrogen Renewables (funded by Denmark’s Copenhagen Infrastructure Partners)
State: Western Australia
End use: Ammonia

2) Port of Newcastle Green Hydrogen Project (750MW)

Developer: Korea Electric Power Corporation (Kepco)
State: New South Wales
End use: Ammonia

3) Central Queensland Hydrogen Project (720MW)

Developer: Stanwell Corporation (electricity generator owned by the state of Queensland)
State: Queensland

End use: Ammonia

4) Hunter Valley Hydrogen Hub (250MW)

Developer: Sydney-based utility Origin Energy
State: New South Wales
End use: Ammonia, mobility

5) HIF Tasmania eFuel Facility (144MW)

Developer: HIF Global (Chile-based producer of e-fuels)
State: Tasmania
End use: e-fuels

6) H2Kwinana (105MW)

Developer: BP
State: Western Australia
End use: Ammonia, sustainable aviation fuel, minerals processing

High-profile Australian hydrogen developers Fortescue and Intercontinental Energy were expected to apply and will be disappointed to have lost out.

“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,” said Darren Miller, CEO of the Australian Renewable Energy Agency, which announced the shortlist on behalf of the Australian government.

“The applicants shortlisted for the next stage provide us with the best opportunity at fast tracking our renewable hydrogen industry.”

Climate change and energy minister Chris Bowen added: “Renewable hydrogen is crucial to reach net zero, while creating economic opportunities for regional Australia.

“We have the largest pipeline of renewable hydrogen projects in the world – Hydrogen Headstart is about supporting these projects to become a reality, as Australia transforms into a renewable energy superpower.”

Fiona Simon, CEO of the Australian Hydrogen Council, congratulated the Australian govenrment for “recognising the urgency of progressing applications this year”.

“We have a strong pipeline of hydrogen projects in Australia, and even those that are not successful in this round of the Hydrogen Headstart will be in a better position to compete in future rounds.

“2024 is shaping up to be a defining year for the hydrogen industry in Australia, and also for the Australian Government in bringing together key policies that send the right signals to investors to realise its renewable energy superpower ambitions.”

The six shortlisted projects have until 27 June 2024 to submit their full application in the second stage of the Hydrogen Headstart programme.

(Copyright)
AustraliaGreen H2BPKepcoCopenhagen Infrastructure Partners
Published 21 December 2023, 10:45Updated 21 December 2023, 10:47