Green hydrogen Tasmania: Origin Energy puts plans on ice in response to energy crunch

A massive energy player has confirmed its plans for a Tasmanian green ammonia plant in the state’s North, which is dependent on new wind generation entering the system, have been put on ice.

Bell Bay Advanced Manufacturing Zone. There are nascent plans for Bell Bay to host a green hydrogen hub. Picture: File

Origin Energy says it has not lost interest in establishing an ammonia plant using green hydrogen in the state’s North, but that its plans are on ice until there is more “certainty” about Tasmania’s pipeline of renewables projects.

Origin, one of a handful of significant players who have outlined proposals to get in at the ground level of Tasmania’s nascent green hydrogen industry, was held up by Labor on Thursday as an example of how a lack of capacity in the system is scaring off business.

“It has now been 1112 days, or over three years, since the last Tasmanian wind farm [Granville Harbour] was completed,” energy spokesman Dean Winter said.

“How many more days will … industries and businesses have to wait for new energy to come online?

“Even the most optimistic assumptions don’t show a significant renewable project being commissioned until 2026 [the 288MW Northern Midlands Solar Farm].

“Origin Energy, which wanted to build a hydrogen plant at Bell Bay, is now short-listed to build one in the Hunter Valley instead – it couldn’t get any power in Tasmania.”

Origin is one of three companies, alongside ABEL Energy and Grange Resources, that received Tasmanian Government funding in 2021 to compile pre-feasibility reports on establishing local green hydrogen projects.

Granville Harbour Wind Farm, Tasmania’s most recently commissioned wind farm, in 2020. Picture: Kevon O'Daly/ Granville Harbour Wind Farm.

Origin’s proposal was for an ammonia plant producing 420,000 tonnes per annum at Bell Bay, to commence production in 2027.

It would have an estimated electrical load of more than 500MW, according to the report.

The report found that, while the project was technically feasible, three uncertainties would need to be removed before it could progress to the FEED (Front End Engineering Design) stage.

They are: whether there is a social licence for a large-scale hydrogen industry in Tasmania, how much inputs would cost, and whether there will be capacity in an energy system that currently has none spare for projects requiring 50MW, let alone ten times that amount.

“Certainty is required around the development of wind generation, associated firming,

transmission infrastructure and load arrangements, including time frames and costs, to support

a project of this size,” the report said.

“Whilst there is plenty of [wind] projects available, planning and approval time frames for wind farm projects do not support the project’s time frame for 2027 delivery.

Grazier Roderic O'Connor's 17,400ha Cressy property, Connorville, the proposed site of a new $500m, 288MW solar farm, due for commissioning in 2026. Picture: Supplied

“This is particularly a problem for wind farms requiring substantial transmission build. “Additional support is required to activate regions with high wind farm development potential and streamline transmission build.”

Ryan Willemsen-Bell, general manager of Origin Energy Future Fuels, told the Mercury it remained interested in Bell Bay but had put its plans on ice.

“While technically feasible, we have paused work as there are several commercial factors requiring resolution to progress,” he said.

“These are highlighted in the knowledge sharing report and are factors are outside of Origin’s control. We remain open to future development, subject to these enabling factors.”

Minister Felix Ellis said the government “wants to see a strong pipeline of energy projects coming through here in Tasmania”.

He noted plans for massive expansions of the Lake Cethana and Tarraleah hydropower schemes, and the recent progression of ACEN Australia’s Robbins Island Renewable Energy Park, delays to which he blamed on the Commonwealth.

“We know that Robbins Island is currently sitting on the federal Labor environment minister’s desk and we want to see that project expedited in a timely manner,” Mr Ellis said.

Energy Minister Nick Duigan emphasised the state government countinued to support large-scale hydrogen project developments as outlined in the Tasmanian Renewable Hydrogen Action Plan.

“It is difficult to fathom why Mr Winter and Labor continue to talk down the industry and put a cloud over its future,” Mr Duigan said.

Originally published as Green hydrogen Tasmania: Origin Energy puts plans on ice in response to energy crunch