Sign in Subscribe
Renewable energy

Federal Government Commits $430 Million to Large-Scale Hydrogen Production in NSW

Strategic Insights

— 1 min read

The Australian government has pledged $430 million to develop a major hydrogen production hub in the New South Wales Hunter region. Climate Change and Energy Minister Chris Bowen announced the funding, which will be used to construct a 50-megawatt hydrogen electrolyser at Kooragang Island, near the Port of Newcastle. The facility is expected to produce 4,700 tonnes of green hydrogen per year, primarily for use by Orica at its nearby site, helping the company to reduce emissions from its explosive manufacturing processes. The project, developed in partnership with Origin Energy and Orica, aims to tap into the growing demand for hydrogen, with Japan and South Korea expressing interest in using the fuel source.

Key Takeaways:

  • The federal government has committed $430 million to support large-scale hydrogen production in the NSW Hunter region.
  • The proposed hub will include a 50-megawatt hydrogen electrolyser to be constructed at Kooragang Island, producing 4,700 tonnes of green hydrogen annually.
  • Orica plans to use the majority of the hydrogen produced to reduce emissions from its manufacturing processes, with potential for exporting excess quantities in the future.
  • The project has been delayed, shifting its operational timeline from 2026 to 2028, citing high input costs and technological advancement challenges.
  • Energy consultant Geoff Bongers has highlighted the significant cost barrier to green hydrogen production, with high capital and ongoing costs.
  • Despite this, there is "relatively high" demand for hydrogen, with Japan and South Korea expressing interest in using it as a fuel source.

Statistics:

  • $430 million: the amount committed by the federal government to support large-scale hydrogen production in the NSW Hunter region.
  • 50-megawatt: the size of the hydrogen electrolyser to be constructed at Kooragang Island.
  • 2028: the revised operational timeline for the project.
  • 4,700 tonnes: the annual production capacity of the proposed hub.
  • 70%: the portion of the hydrogen produced that will be used by Orica for emission reduction.
  • 2025-2026: the original planned operational timeline for the project.

Sources:

  • "Funding boost for NSW hydrogen hub", ABC News Australia (2023)
  • "Government commits $430 million to hydrogen hub", Australian Financial Review (2023)
  • "Green hydrogen's future still shrouded in uncertainty", The Australian Financial Review (2023)

Read more