More than $3 billion of hydrogen projects bid for ARENA funding
Renewable hydrogen projects with a collective value of more than $3 billion are competing for ARENA funding.
ARENA has announced 36 expressions of interest through a $70 million hydrogen deployment funding round that opened in April.
The funding is being offered to two or more shovel-ready hydrogen electrolysis projects that will produce renewable hydrogen at scale.
In line with the recently released Technology Investment Roadmap and the National Hydrogen Strategy released last year, the funding supports efforts to bring the cost of renewable hydrogen production below $2 per kilogram to be cost competitive with hydrogen generated from fossil fuels.
To be eligible, applicants are required to deploy electrolysers powered by electricity from renewable sources, with a minimum capacity of 5 MW and preference for 10 MW or more.
Collectively the 36 applications received have more than 500 MW of electrolysis capacity. Projects range in size from 5 MW to approximately 80 MW and will seek to produce hydrogen for a wide range of end uses across a number of industries.
Applications have been received from every Australian state and territory, with more than $1 billion in grant requests and $3 billion in combined project value, when accounting for private sector investment.
Each EOI application will now be assessed and shortlisted projects will be invited to submit a full application with the aim of awarding funding by the end of 2020. Successful projects will aim to reach financial close and begin construction in 2021.
Steps in the journey to hydrogen industry
ARENA’s plan for a hydrogen funding round was first announced in November, days after Australia’s Chief Scientist Dr Alan Finkel presented the National Hydrogen Strategy to the Council of Australian Governments.
In what it described as a ‘cautiously optimistic’ scenario, the strategy found that international demand for hydrogen could grow to between two and nine million tonnes by 2030 and go on to create 7600 jobs and $11 billion in GDP by 2050.
While Australia is well positioned to meet some of this demand thanks to strong trading relationships with emerging hydrogen markets, reducing the cost of producing renewable hydrogen production is a barrier.
To accelerate the rollout of electrolyser technology, ARENA has already supported a range of projects producing hydrogen using renewable energy, from feasibility studies with large ammonia users, to trials injecting hydrogen into gas distribution networks and construction of Toyota’s Ecopark to test transport applications.
The projects are showing that it is technically feasible to produce hydrogen with renewable energy, but attention is now shifting to large scale demonstrations to help renewable hydrogen compete on cost with hydrogen produced from fossil fuels.
ARENA CEO Darren Miller welcomed the strong response to the funding round, saying it is exciting to see strong interest in renewable hydrogen from a broad cross section of industry.
“The fact that we’ve received expressions of interest for projects totalling over $3 billion in cost and 500 MW in size shows that we’re beginning to see companies embrace making hydrogen through renewable means and we’re seeing a lot of projects ready to be built,” Mr Miller said.
“It is early days in the hydrogen journey but this is an important step for the sector and it looks like we have many companies now interested in building large scale renewable hydrogen projects across a range of industries and end uses.”
“While we’re only at the early stages of renewable hydrogen production in Australia and there is a long way to go, much like our role in helping to make large scale solar commercially competitive, ARENA aims to help bring down the cost of hydrogen, build Australia’s our skills and capacity, create jobs and activity in regional areas and help Australia achieve our emissions reduction objectives.”