Australia confirms funding for 3 GW green hydrogen project

From pv magazine Australia

The Australian and Queensland governments have united with a consortium of Australian and Japanese energy companies to make the “largest investment in a renewable hydrogen project of its kind in the nation’s history,” committing AUD 117 million to fund further development of the Central Queensland Hydrogen (CQ-H2) project in Gladstone, Queensland.

The CQ-H2 project is being developed by Queensland-government owned generator Stanwell in conjunction with Japanese energy companies Iwatani, Kansai Electric Power Corporation, Marubeni, and Kawasaki Heavy Industries, and Sydney-based energy infrastructure business APA Group.

The consortium partners have today committed $81.8 million to fund the Front End Engineering Design (FEED) for the CQ-H2 project, which would eventually include 3 GW of electrolyser capacity capable of producing up to of 800 tonnes of green hydrogen per day for export to Japan and use in local industry.

The Australian Renewable Energy Agency (ARENA) will provide AUD 20 million in funding, while AUD 15 million will be provided by the Queensland government. The study will also investigate the development of a hydrogen liquefaction facility based at the port of Gladstone that will produce 400 tons per day of liquefied hydrogen for export by the end of 2030.

Federal Energy Minister Chris Bowen said successful completion of the FEED will bring the project one step closer to a final investment decision, planned for late 2024.

“Projects like this are critical to scaling up Australia’s green hydrogen industry,” Bowen said. “The government is committed to making Australia a global hydrogen leader and projects like the CQ-H2 project could lead the way in exporting renewable hydrogen to the international market. Japan, Korea and China are three of our largest trading partners and have all made clear commitments to increase the use of hydrogen, with a focus on establishing international supply chains for imports.”

It is anticipated the CQ-H2 project, being developed at Aldoga, about 20 kilometers northwest of Gladstone, would initially involve the installation of up to 640 MW of electrolysers to produce 73,000 tons of green hydrogen per annum by 2028. The electrolyzer capacity is to ramp up to 3 GW, producing to 292,000 tons per annum by 2031. The hydrogen would then be liquified or converted to ammonia for export to Japan and potentially local industry offtake.

ARENA Chief Executive Officer Darren Miller said Australia is well positioned to capitalise on export opportunities to Asia, however, unlocking it will require the rapid development of substantial hydrogen production and export facilities at a globally cost competitive price point.

“Stanwell’s project represents a near-term renewable hydrogen production opportunity at globally significant scale,” he said. “The development of a renewable hydrogen hub in Gladstone could help decarbonise heavy industrial facilities in the region and create an export supply chain between Australia and Japan and Singapore.”

Miller said the CQ-H2 project could provide “valuable learnings around the current cost of producing hydrogen from renewable energy at large-scale …  This understanding is critical to scaling up hydrogen production in Australia and developing both the domestic and export industry for renewable hydrogen in line with Australia’s ambitions.”

Queensland Energy Minister Mick de Brenni said the CQ-H2 project will help establish the state as a global hydrogen heavyweight and unlock huge economic opportunities with estimates indicating the project will generate almost 9,000 jobs and more than AUD 17.2 billion in hydrogen exports over its 30-year life.

“Green hydrogen is the next resource frontier for a world hungry for renewables, and it’s Queensland’s green hydrogen industry that will ensure the greatest climate, jobs, and export opportunity in a generation,” he said. “We are writing a new chapter and carving our own path to ensure Queensland’s mighty sun, wind and water are leveraged to help decarbonise our nation, and the world.”

The funding for the FEED comes after a AUD 10.4 million feasibility study showed that the proposed CQ-H2 project is technically feasible and commercially viable, “with appropriate government support in the initial phases.”

Stanwell has already secured a 236-hectare site at Aldoga for the hydrogen production base and a ~100-hectare site is to be acquired at the Port of Gladstone to serve as a hydrogen liquefaction and loading base.

A memorandum of understanding has also been signed that allows for a direct connection to be established between the hydrogen production facility and Spanish renewable energy company Acciona Energia’s proposed 600 MWp Aldoga Solar Farm.

Acciona has previously said construction of the Aldoga Solar Farm is due to commence later this year with generation output scheduled to commence in December 2025.