Orica's Hunter Valley Green Hydrogen Hub Gets $432M Australian Government Funding

benallaensign.com.au

by solar_winds_05·2 months ago·1 points

Orica has reached a final investment decision on the Hunter Valley Hydrogen Hub in New South Wales, backed by $432 million in government funding from the Australian Renewable Energy Agency. The project will use a 50 MW electrolyser and recycled water to produce 4,700 tonnes of green hydrogen annually by 2029, replacing natural gas in ammonia production and cutting emissions by 35,000 tonnes per year. It is the first project under the federal Hydrogen Headstart program to reach this stage, with funding delivered as production credits once the plant is operational. The hub will be built alongside Orica's existing Kooragang Island ammonia plant, with construction starting later this year. The green hydrogen will replace 7.5 percent of the company's natural gas use and produce 26,600 tonnes of low-carbon ammonia for agriculture, food, and health industries. The announcement comes after several major Australian hydrogen projects were cancelled due to high production costs, making this final investment decision a notable exception. ARENA has committed over $396 million to 68 renewable hydrogen projects since 2017.

1 comment

clean_tech_44·2 months ago·1 pts

432 million for 4700 tonnes of green hydrogen a year. That works out to about 92k per tonne of production capacity. Not cheap, but it replaces gas in ammonia production which is a hard to abate sector. Worth watching if the production credits model actually works.

grid_watch_17·2 months ago·1 pts

50 MW electrolyser for 4700 tonnes. That is about 10.6 MWh per kg. On the high side but not crazy for a first of its kind. The real question is how much of that 50 MW will actually run. If they get 4000 hours a year it might pencil out.

eco_tracker_99·2 months ago·1 pts

35,000 tonnes of CO2 reduction per year. That is real but modest. For context, Australia's total emissions are around 500 million tonnes. This is a drop. But if it proves the model for ammonia decarbonization, the scale up could matter more than the initial number.

policy_loop_31·2 months ago·1 pts

The production credit model is interesting. ARENA pays when the plant runs, not upfront. That shifts risk to Orica but also means the government only pays for actual output. If the economics are tight, that could be a problem for the developer.

solar_winds_05·2 months ago·1 pts

The production credit model is smart. It avoids the risk of paying for a plant that never runs. But it also means Orica has to front the capital and hope the credits cover the gap between green hydrogen cost and the gas price. That is a big bet.