Iron ore-billionaire Andrew Forrest has admitted that getting his green hydrogen business off the ground has been one of the “hardest sells” of his career — comparable to the tough time he says he had convincing investors to join him in the iron ore business in the early 2000s.
And the chairman and founder of Fortescue — which now houses ambitious green hydrogen developer Fortescue Energy — lamented the “deeply cynical questions” he has fielded from Australian investors in particular.
“I’ve been told by the Australian markets that I’m lost and lonely,” he told the Australian Financial Review (AFR) in an interview this weekend. “It has been a hard sell, but I believe we’re on a very serious tipping point.”
The Fortescue founder compared the experience to his early days flogging iron ore, during which he faced some “humiliating tough times” trying to persuade investors to get on board. Iron ore later made him a billionaire.
Forrest did not elaborate on the “cynical questions” on green hydrogen. However Fortescue has come under scrutiny for the secrecy it maintains around the economics of its project portfolio —
with one banking group describing it as a “cash burn” — as well as the high churn of senior executives over the past three years.
Meanwhile, industry observers have become increasingly sceptical of the green hydrogen industry’s ability to convince offtakers to sign long-term supply agreements, for fear of locking themselves in to high H2 prices.
Forrest appears to believe that this negativity has contributed to unnecessary investor caution over green H2 projects.
“You can see the public screaming for [green hydrogen] yet, still, it’s been so hard to convince people that you’re making a good investment, and they should come with you,” he told AFR, adding that companies such as US technology firm General Electric (GE) are now lobbying for government support to source renewable H2.
“[GE] are selling gas turbines that are 100 per cent convertible from gas to hydrogen,” he said. “People are buying them saying, ‘right I can have a pollution free energy system, I’ve just got to find green hydrogen, hey far out, where is the green hydrogen?’”
Forrest is not quite correct on GE gas turbines, as the US company says its turbines are on “a path towards running on 100% hydrogen”. However,
Siemens recently announced that one of its gas turbines can run on 100% H2.
Forrest’s comments come as Fortescue enters into funding negotiations with the US government for up to $150m in green hydrogen subsidies, after the Pacific Northwest Hydrogen Hub (a consortium which includes
Fortescue’s Centralia green H2 scheme in Washington state) was
selected as one of the successful applicants for a share of $7bn federal H2 Hubs cash on Friday.
“Federal funding like this, alongside other incentives in the Inflation Reduction Act [which allows green H2 projects to access up to $3/kg in federal tax credits], go a long way to helping reduce risk and accelerate the widespread production of green hydrogen,” Forrest added.
“There is no place better in the world to be investing in renewable and green energy projects right now than the United States.”
But his home nation of Australia, where Fortescue is
expected to take final investment decision on its green hydrogen and ammonia project in Queensland over the coming weeks, could become a major player in green hydrogen exports.
“I argue that Australia is more than capable, if it gets a hydrogen industry going, of having an energy export source that could rival Saudi Aramco,” he said.
Last week the Australian government
opened its A$2bn (US$1.28bn) Hydrogen Headstart subsidy programme, inviting developers to register their interest in applying for production credits.
