A Western Australian ammonia project is set to be the first recipient of the Australian Renewable Energy Agency’s (ARENA) Hydrogen Headstart Program.
Under the first round of the program, ARENA has allocated $814 million in funding to Copenhagen Infrastructure Partners (CIP) for its 1500MW Murchison Green Hydrogen Project in Western Australia.
The project is set to convert solar and wind powered hydrogen to green ammonia for export.
Stage one is expected to produce 900,000t of green ammonia each year, which is equivalent to almost half of Australia’s current ammonia production from fossil fuels.
Green ammonia can be used to make fertiliser and other chemicals, as an energy carrier and to power ships as a green fuel.
ARENA CEO, Darren Miller, said Australia has immense potential when it comes to hydrogen projects – however, many face challenges due to the current gap between the market price for renewable hydrogen and production costs.
“At the time it was announced, Hydrogen Headstart was the largest government investment in Australia’s developing renewable hydrogen industry,” he said.
“ARENA’s support will help Australia’s first large-scale projects get to financial close and deliver on its promise as a provider of clean energy to decarbonise industry in Australia and globally.”
Mr Miller said the Hydrogen Headstart Program commits funding to bridge the current commercial gap in the form of a production credit, meaning funding is only provided once projects are constructed and operational.
“Enabling hydrogen projects through Hydrogen Headstart is essential to ensure our economic prosperity as the world transitions to cleaner forms of energy especially in hard to abate sectors such as ammonia, iron and alumina.
“Copenhagen Infrastructure Partners’ (CIP) Murchison project is an example of how we can leverage Australia’s high-quality solar and wind resources to produce low-cost renewable hydrogen and ammonia at scale, increasing export opportunities and embedding Australia as a key enabler of global decarbonisation.”
The Murchison project must now satisfy a number of development conditions and achieve commercial operations before the funding is released. Funding under the program is paid based on production volumes over a ten-year operating period.
To date, ARENA has provided more than $370 million to 65 renewable hydrogen projects from early-stage research to deployment projects.
According to analysis by the Department of Climate Change, Energy, the Environment and Water (DCCEEW), Australia’s hydrogen industry could unlock over $50 billion in additional private sector investment and create up to 16,000 new jobs by 2030.
Federal Minister for Climate Change and Energy, Chris Bowen, said Australia has one of the largest renewable hydrogen project pipelines in the world.
“This support is about unlocking that private capital to help realise our potential, not only to become a renewable energy superpower but create a Future Made in Australia with real jobs right now.”
Murchison Green Hydrogen CEO, Shohan Seneviratne, said CIP is honoured to receive Hydrogen Headstart funding, which reinforces the company’s shared vision with the Federal Government to establish a leading green hydrogen industry in Australia.
“We are committed to contributing to Australia’s green hydrogen ambitions by creating local jobs, supporting skills development and sharing project benefits with local [and First Nations] communities.
“We appreciate the support from the Federal Government, Minister Bowen, and ARENA and commend their leadership, vision and collaboration to make Murchison and the Australian hydrogen industry a reality.”
About the Murchison Green Hydrogen project
The Murchison Green Hydrogen project is being developed by CIP through its Energy Transition Fund I (ETF I), with the project team based locally in Perth.
Murchison involves large-scale production of renewable hydrogen and ammonia in the mid-west of Western Australia.
It will be located approximately 15km north of Kalbarri and will include up to 1.5GW of electrolysis and 3600t per day of Haber-Bosch ammonia production capacity.
The facility will operate completely off-grid, powered by approximately 1.2GW of solar PV and approximately 1.7GW of onshore wind new build generation, with a 600MW/1200MWh battery energy storage system and water sustainably sourced through a new desalination facility.
Renewable ammonia is expected to be exported to support global decarbonisation.
