Fortescue to cash in on US hydrogen funding

Fortescue is in line for a hefty subsidy after cutting a deal to study the feasibility of converting a US coal-fired power plant and mine in Washington into a hydrogen production facility.

Andrew Forrest’s Fortescue will be involved in the US government-backed development of the Pacific Northwest Hydrogen Hub. Picture: SoCo Studios

A US green hydrogen project backed by mining giant Fortescue is in line to receive a subsidy of up to $US150m ($238m), after President Joe Biden announced $US7bn of funding for seven regional hubs to accelerate a rollout of the green fuel.

Fortescue in May cut a deal to study the feasibility of converting a US coal-fired power plant and mine in Washington into a hydrogen production facility.

The Perth-headquartered iron ore giant said late on Friday it had been selected to begin award negotiations as part of the US government-backed development of the Pacific Northwest Hydrogen Hub, one of seven hubs in line to receive up to $US1bn in Bipartisan Infrastructure Law funding.

Money from the US Department of Energy’s Office of Clean Energy Demonstrations would be used for advanced planning, detailed design, environmental permitting and procurement of long-lead equipment.

“There is no place better in the world to be investing in renewable and green energy projects right now than the United States,” Fortescue executive chairman Andrew Forrest said.

“Federal funding like this, alongside other incentives in the Inflation Reduction Act, go a long way to helping reduce risk and ­accelerate the widespread production of green hydrogen.”

The project is currently in the design stage, with construction to start in 2026 and continue into 2028, subject to a final investment decision by the Fortescue board.

Dr Forrest first flagged his plan to move to repurpose US coal-fired power stations into hydrogen production facilities in April, telling The Australian he was eyeing the acquisition of as many as 22 power stations in West Virginia.

Fortescue then signed a deal to study a feasibility study at the Centralia mine and power station in Washington with the Industrial Park at TransAlta – a group formed to look at options for redeveloping the industrial site when the power station closes in 2025.

The project would be located on a remediated coal mine adjacent to Washington’s last coal-fired power plant.

Fortescue said the proposed facility would produce green hydrogen at scale for use locally in the Pacific Northwest in heavy-duty transportation, grid reliability, maritime, industrial processes and other hard-to-abate sectors.

The coal-fired plant is owned by Canada’s TransAlta, and has been running since 1971. The first of its two 670 megawatt generating units closed in 2020, with the second due to close in 2025.

The US government said the seven selected regional clean hydrogen hubs would catalyse more than $US40bn in private investment and create tens of thousands of jobs, bringing total public and private investment in hydrogen hubs to nearly $US50bn.

The hubs aim to produce more than three million tonnes of clean hydrogen a year, hitting almost one-third of the US’s 2030 clean hydrogen production goal.

Fortescue said last week it was close to finalising five deals to sell hydrogen as the nascent fuel source edges closer to commercialisation.

Global interest in hydrogen is soaring as nations dash to reach their net zero targets by 2050, but it remains some way from ­maturity.

Fortescue Energy CEO Mark Hutchinson said the company was close to a series of deals: “I’m hopeful of getting five deals through my board in the next few weeks. One in Phoenix, one in Norway. Phoenix is a domestic play, Noway and Brazil feed into Europe, and we have one in Kenya and one in Australia.”