Bell Bay Powerfuels Project: $1.4bn green methanol behemoth more than doubles in size

A renewable energy player says its facility, which aims to begin production of green methanol to replace fossil fuels in shipping by 2027, will be the biggest Tasmanian project in 50 years.

Render of ABEL Energy's proposed $1.4bn Bell Bay Powerfuels Project, located within the decommissioned Bell Bay Power Station. Picture: Supplied

The proponent of a proposed $1.4bn green methanol project in the state’s North has brought aboard two significant global players on its march towards production in 2027.

ABEL Energy’s Bell Bay Powerfuels Project, located within the decommissioned Bell Bay Power Station, will eventually scale up to produce 300,000 tonnes of green methanol per annum, the company said in a statement.

This is one-and-a-half times larger than first planned and it will require a 240MW electrolyser to separate the hydrogen and oxygen molecules in water, thereby obtaining the hydrogen that is one of methanol’s key ingredients.

Per annum, it would use an amount of electricity equivalent to 20 per cent of Tasmania’s current consumption.

“The increase in scale is partly in response to an extraordinary surge in forward demand for green methanol as a shipping fuel over the last 12 months,” the company said.

The amount of methanol the facility could eventually produce is about three times Australia’s annual consumption of the fuel, and its use as a shipping fuel would lead to the removal of 540,000 tonnes of carbon dioxide from the atmosphere per annum.

ABEL Energy revealed it had signed contracts with UK firm Johnston Matthey to design the plant’s “methanol synthesis loop and... highly robust methanol synthesis catalyst,” the hardware that will produce the methanol.

Houston-based SunGas Renewables, meanwhile, will supply a biomass gasification system, known as the SunGas System 1,000 gasifier. The system will allow for the renewable production of carbon monoxide, another key ingredient in synthesising methanol.

Bell Bay Power Station. PICTURE CHRIS KIDD

“We’re very proud and excited to have Johnson Matthey and SunGas Renewables agree

to take a role in our Bell Bay Powerfuels Project. We really do feel we have brought the

very best technologies in the world to Tasmania,” said ABEL Energy’s chief technology officer Rhys Tucker.

The success of the powerfuels project will depend heavily on the addition of further wind generation to Tasmania’s energy grid.

A ‘knowledge sharing report’ produced by the company in mid-2022 revealed ABEL Energy was banking on a number of wind proposals getting over the line before 2027.

“Power generation in Tasmania has sufficient capacity to meet the requirements of the Tasmanian market with some spare capacity,” the report said.

“However, the development of multiple large-scale renewable energy based green export projects will require complementary additional generation capacity to maintain balance in the Tasmanian network.”

A number of high-profile green hydrogen projects planned for Tasmania have stalled due to insufficient guarantees of spare generating capacity in the system. They include proposals by Fortescue Future Industries, Grange Resources, and Origin Energy.

ABEL Energy’s commercial director Simon Talbot told the Mercury that the company had an ace up its sleeve regarding future generating capacity – “advanced contract negotiations” with three windfarm proponents.

“They need us as much as we need them,” he said.

If and when ABEL Energy makes a final investment decision on its powerfuels project, Mr Talbot expects investors to fall in line behind the windfarm proposals, giving them momentum and certainty.

“This is Tasmania’s biggest project in 50 years,” Mr Talbot said.