$432m for Hunter Valley Hydrogen Hub

Orica has been awarded $432m in Hydrogen Headstart funding from the Australian Government for the Hunter Valley Hydrogen Hub in NSW.

Hydrogen Headstart — a federal program administered by the Australian Renewable Energy Agency (ARENA) — provides revenue support for large-scale renewable hydrogen projects once operational, through competitive hydrogen production credits.

The Hunter Valley Hydrogen Hub on Kooragang Island aims to build a 50 MW electrolyser to produce renewable hydrogen to progressively replace natural gas in Orica’s production of low-carbon ammonia and ammonium nitrate — for mining, agriculture, health and food industries.

The Hunter Valley Hydrogen Hub is the second recipient of the $2bn initial Hydrogen Headstart funding round. Murchison Green Hydrogen on the mid-west of Western Australia is the first project, with $814m awarded earlier this year to progress plans for a 1.5 GW green hydrogen production facility, aiming to produce approximately 900,000 tonnes of green ammonia per year.

A further $2bn is allocated for the second round of Hydrogen Headstart, with consultation now open.

Australian Hydrogen Council CEO Dr Fiona Simon said, “AHC is thrilled to see the Hunter Valley Hydrogen Hub move one step closer to a final investment decision with $432m funding support from the Australian Government’s Hydrogen Headstart program.

“This is an important project that supports Orica’s decarbonisation ambitions, the Hunter region’s transition from a coal-based economy and the broader NSW economy. It is critical that government and industry work together to scale renewable hydrogen projects located in regions such as the Hunter where heavy industry needs to decarbonise and common user infrastructure is already in place.

“Hydrogen is the building block for both ammonia and methanol. We are working closely with end users like Orica to ensure hydrogen molecules are available when and where they are needed, to meet different customers’ needs and local attributes.

“The Australian Government’s hydrogen production tax incentive and Hydrogen Headstart will help close the commercial gap for these foundational large-scale projects, but we also need policy to support the right common user infrastructure, renewable energy generation and social underpinnings for these new industries.

“We look forward to working closely with the Australian Government to progress its priorities including the Future Made in Australia Agenda and second round of Hydrogen Headstart, and supporting key stakeholders in the Hunter region as this project progresses.”

The Hunter Valley Hydrogen Hub has previously been awarded $70m in funding from the Australian Government’s Regional Hydrogen Hubs program and $45m from the NSW Government.

Image credit: iStock.com/ismagilov