Origin, Fortescue make Tas hydrogen energy, ammonia plans
Energy major Origin and would-be new green power player Fortescue are putting forward major plans for hydrogen power in Tasmania.
Energy major Origin and would-be new green power player Fortescue have put forward plans for hydrogen-powered ammonia plants in Tasmania under the state’s Renewable Hydrogen Action Plan.
Origin, Australia’s largest electricity retailer, said the 500 megawatt hydrogen plant would produce more than 420,000 tonnes of zero emissions ammonia a year. The plant could be in production by 2025, Origin said. Fortescue said on Tuesday it was examining the feasibility of building a 250 megawatt hydrogen power plant in Tasmania’s Bell Bay industrial precinct, to power a plant capable of producing 250,000 tonnes of ammonia for domestic and industrial use.
The ventures would see green hydrogen produced from water using renewable energy with hydrogen then combined with nitrogen from the air to create green ammonia which can be exported to international markets.
The hydrogen and ammonia could be used for both power generation and as a transport fuel with some hydrogen expected to meet the state’s net zero emissions goals. The Tasmanian government will pay for half of the $3.2m feasibility study, due to be completed by December 2021, with first ammonia production set for the mid 2020s should the project proceed.
Fortescue Metals Group says it could make a decision on a green ammonia and hydrogen project in Tasmania as early as 2021, after winning support from the state government.
The project is part of Fortescue’s bold ambition to become one of the biggest green energy producers in the world, with founder Andrew Forrest telling shareholders at its annual meeting last week the company is developing plans to eventually produce 235 gigawatts of renewable energy – or five times the current capacity of Australia’s National Energy Market – through its Fortescue Future Industries subsidiary.
Fortescue chief executive Elizabeth Gaines said on Tuesday the company’s board would make a call on the project in 2021.
“Subject to detailed feasibility analysis, the Tasmania Project will be an important step in demonstrating our intention to position Australia at the forefront of the establishment of a bulk export market for green hydrogen,” she said.
Origin has proposed a 420,000t ammonia project in the state, with ABEL examining the economics of a 100MW hydrogen and methanol export plant, and Grange looking at a 90 to 100MR renewable hydrogen project to provide process heat at its Port Latta plant.
Dr Forrest told Fortescue shareholders last week the mining giant plans to challenge global energy majors such as Chevron as an energy producer, with Fortescue Future Industries targeting renewable energy projects across globe, having already stitched up early stage agreements in Papua New Guinea, Indonesia and beyond for potential hydroelectric and other projects. Fortescue itself has been investing heavily in plans to partly power its iron ore mines through a mix of solar and wind generation, and batteries.
The company has also cut deals with Australia’s CSIRO and Hyundai to commercialise hydrogen and ammonia technology and in early 2020 appointed former Pacific Hydro boss Rob Grant as its director of energy projects.
Dr Forrest said the company had now engaged with 25 governments around the globe to talk about potential energy projects, targeting total eventual production of 235GW of renewable energy a year — or five times the capacity of the National Electricity Market.
Ms Gaines said the Tasmanian plant would have the capacity to be one of the world’s largest green hydrogen plants.
Origin general manager of future fuels Felicity Underhill said “Origin has been exploring how hydrogen can best fit into Australia’s energy system and is progressing a number of opportunities. As an integrated energy company operating in key parts of the value chain, Origin is ideally placed to develop large scale green hydrogen and ammonia projects and connect them to markets, either to stimulate a domestic hydrogen economy or to enable the export of energy produced from renewable sources”.
The plan marks an accelerating trend by big energy producers and investors to gain exposure to the hydrogen sector as the world shifts to a greater focus on renewable energy.
The Morrison government named hydrogen among technologies to be prioritised under its technology road map earlier this year with hydrogen to create 7600 jobs between now and 2050 and add $11bn annually to GDP. It has set out a goal for Australia to become a major global hydrogen player by 2030 and a top three exporter of the fuel to the Asian markets.
Santos has commissioned a study to produce hydrogen from gas in the Cooper Basin, with carbon emissions to be reinjected underground into the Moomba gas fields under a scheme to make zero-emission or ‘‘blue hydrogen’’ from natural gas.
Green hydrogen projects are powered by renewable sources with a string of developments including the giant $21bn Asian Renewable Energy Hub in WA targeting the technology.
Big gas industry players including Western Australia’s Woodside Petroleum have started to position themselves to take prime spots developing the fuel. The LNG producer recently agreed a joint study with Korea Gas Corporation as expectations grow for the fuel to eventually mirror LNG and develop into a major export opportunity.
Still, demand among buyers for hydrogen remains uncertain with major energy consumers China and India unlikely to be viable hydrogen export markets for Australia as they develop substantial domestic production for their own use, according to Japanese hydrogen developer Chiyoda.