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      Generation & Storage, Hydrogen — 6 mins read

      Stanwell: Australia’s green hydrogen powerhouse

      According to Goldman Sachs, the global addressable green hydrogen market could be valued at an estimated US$10 trillion by 2050.*

      As countries move to exploit this emerging industry, and with strong competitors in the Middle East, Russia and Canada, Australia is placing Queensland’s Stanwell project at the centre of a homegrown green hydrogen export industry.

      It remains to be seen whether this flagship venture will lead the world – as its promise suggests - or is merely a contender in the high-stakes race to achieve commercial success and market dominance.

      Stanwell: Australia’s Green Hydrogen Powerhouse

      According to Goldman Sachs, the global addressable green hydrogen market could be valued at an estimated US$10 trillion by 2050.*

      As countries move to exploit this emerging industry, and with strong competitors in the Middle East, Russia and Canada, Australia is placing Queensland’s Stanwell project at the centre of a homegrown green hydrogen export industry.

      It remains to be seen whether this flagship venture will lead the world – as its promise suggests - or is merely a contender in the high-stakes race to achieve commercial success and market dominance.

      Foundation stone for renewable hydrogen industry

      Stanwell Corporation, a major electricity generator, is currently rolling out a 300MW renewable hydrogen project. It aims to export green hydrogen to Japan on completion, as well as supplying major industrial customers in Central Queensland.

      The organisation is undertaking a detailed feasibility study – along with several Japanese energy companies, and Australian energy infrastructure experts APA Group – to develop a large-scale electrolyser and liquefaction facility onsite.

      The project has big ambitions, with a delivery target of $4.2 billion in hydrogen exports, and the addition of $10 billion to Queensland’s GSP over 30 years.

      A central plank in the federal government’s commitment to net zero emissions by 2050, Stanwell will also help the Queensland Government reach 50% renewables by 2030. The plant is scheduled to scale up to 3,000MW by the early 2030s.

      The Coalition has sunk heavy investment – and firm conviction – into the creation of a world-leading export industry, with premium renewable credentials. Yet it is still struggling, along with every other nation, to make green hydrogen affordable.

      Even when on-site production becomes efficient, the logistics of transporting large quantities of green hydrogen to potential global markets remain complex.

      Australia’s potential on the world stage

      The potential is undeniable. A Wood Mackenzie report, 2050: The hydrogen possibility, predicts that hydrogen will make up 24% of the global energy market by 2050.*

      Australia is at the forefront of the global push for commercial hydrogen production and export, for several reasons.

      • Strong government support and investment at both federal and state/territory levels. The federal government aims to produce green hydrogen at less than A$2 per kilogram, contributing around A$11 billion annually to GDP by 2050.
      • Significant trade links between Australia and Japan, a major potential hydrogen importer. As Tokyo turns away from China, and reduces its reliance on fossil fuel imports, Australia has increasing appeal as a provider of cost-effective renewable energy.
      • Major existing world-class port facilities. Currently exporting coal, LNG and mining products, key Queensland and NSW ports – like Gladstone, Townsville and Newcastle – are capable of being upgraded to hydrogen hubs.

      Australia could, therefore, become a major player in the renewable hydrogen supply chain to Asian customers.

      Why Stanwell stands out

      Other Australian green hydrogen projects are currently proposed in Gladstone, the Latrobe Valley, Eyre Peninsula, Darwin, the Pilbara and the Hunter Valley.

      Fortescue Future Industries (FFI) has proposed a 250MW green hydrogen plant at Bell Bay, in northern Tasmania, having signed an agreement with Japan’s IHI Corporation in May 2021. This could produce 250,009 tonnes of green ammonia every year.*

      A study is also underway at Port Pirie, South Australia, for a proposed green hydrogen commercial manufacturing facility. Trafigura Group, Nyrstar and the South Australian state government are collaborating to build a 44MW electrolyser, designed to produce 100tpd of renewable hydrogen at full capacity. *

      Of these additional projects, the FFI venture is by far the most significant, and definitely attracts the loudest fanfare. However, it has yet to match Stanwell’s level of investment, development and progress. Significantly, Stanwell is the first Australian company to sign a hydrogen export agreement with Japan.

      AHC: More investment needed

      Despite the Coalition’s heavy investment in the Stanwell project, the Australian Hydrogen Council (AHC) insists more financial support is necessary to ensure we take the lead in renewable hydrogen exports. The AHC states:

      'It is likely that capital investments to produce hydrogen alone could run to tens of billions of dollars. Until the industry has reached commercial scale, grant funding is essential. Public investment will unlock several times its value from the private sector….Investors are increasingly recognising that they have both an ethical and fiduciary duty to play an active role in transitioning to a decarbonised economy.'

      Stanwell is likely to endure short – even medium – term pain, in order to reap longer term commercial rewards.

      Sources:
      * https://www.goldmansachs.com/insights/pages/gs-research/green-hydrogen/report.pdf
      * https://www.woodmac.com/our-expertise/focus/transition/2050---the-hydrogen-possibility/
      * https://www.pv-magazine-australia.com/2021/06/22/fortescue-signs-contract-with-tasports-progressing-250-mw-green-hydrogen-plant-in-bell-bay/
      * https://www.nyrstar.com/resource-center/press-releases/planned-new-green-hydrogen-project-at-port-pirie-south-australia

      Wendy Riley, Energy Insights

      Energy Insights Monthly Newsletter

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      March 25, 2024 | Sheraton Grand Sydney Hyde Park

      Australian Domestic Gas Outlook 2024

      June 11, 2024 | Melbourne Convention and Exhibition Centre

      Australian Energy Week 2024

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