A grant agreement for the development of an Origin Energy-led green hydrogen hub in the Hunter Valley has been signed for around 70 per cent more than had been expected to be committed.
The hub is expected to feature a 55MW electrolyser capable of producing 5,500 tonnes of hydrogen annually. It will be connected to the grid but will be powered from renewable generation already operated by Orica.
When the project was announced by the former government in April 2022, government funding through the Regional Hydrogen Hubs Program was expected to be worth $41 million.
But Thursday’s announcement puts the cost of the hub — which is the first formal investment commitment by the Commonwealth for a regional hydrogen hub — at $70 million.
In October 2022, plans for a second hub in the Hunter Valley proposed by the Port of Newcastle and Macquarie Green Investment Group dissolved, freeing up a $41 million grant the Commonwealth was expected commit.
InnovationAus.com understands this has partly been reallocated to the Origin hub, with the remaining $12 million unallocated.
Separately, the Port of Newcastle also has a $100 million commitment through the Department of Infrastructure to support development of its 220-hectare Clean Energy Precinct.
The Origin hydrogen hub is being developed in collaboration with explosives and mining equipment manufacturer Orica. Most of the hydrogen produced at the hub will be used as inputs to the firm’s ammonia and ammonium nitrate facility.
Some of the hydrogen will refuel buses and trucks at the hub while longer term ambitions include identifying a pathway to export renewable hydrogen and upscaling the production capacity of the hub.
Construction is expected to begin in 2025, with operations to commence in 2026.
On Wednesday, Climate Change and Energy minister Chris Bowen visited the Port of Newcastle to coincide with the port’s signing of 30 memorandums of understanding, including with Japanese and South Korean partners.
Mr Bowen said that “investing in renewable hydrogen is investing in Australia’s future”.
“Newcastle and the Hunter Region have been industrial and economic powerhouses for decades, making the Port of Newcastle an ideal location for a renewable hydrogen hub that can support decarbonisation of heavy industry in the region and connect our renewable resources to the world,” Mr Bowen said.
“This project is the next step towards using locally produced renewable hydrogen in Australia to reduce our industrial emissions and develop a renewable export future.”
Origin Energy’s hydrogen hub will be located on Kooragang Island near Orica’s nitric acid plants and ammonium nitrate plants.
Orica also commissioned its Kooragang Island Decarbonisation Project on Thursday, which involved the installation of tertiary catalyst abatement technology at its three nitric acid plants to decompose nitrous oxide greenhouse gas emissions into nitrogen and oxygen.
It is expected to cut greenhouse gas emissions from the facility by 567,000 tonnes per year. A $25 million investment from the Clean Energy Finance Corporation was made in 2021.
Consultation on the design of the Commonwealth’s $2 billion Hydrogen Headstart production credit program is currently underway alongside consultation on a refresh of the National Hydrogen Strategy.
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