Queensland promises millions more for massive green hydrogen export plans
Rachel Williamson 17 July 2023 8
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The Queensland government is making moves to replace its gas export revenue with that from green hydrogen, with the latest funding promise to support a feasibility study into an export project at thermal coal port Abbot Point.
Premier Annastacia Palaszczuk spent last week in Singapore, Korea and Japan pitching the state as an investment hub, but putting a particular focus on the green hydrogen and renewables industries.
As a result, the state is promising to spend $8.5 million to help the consortium of Korean multinationals Hanwha Impact, SK Gas and the Australian subsidiary of Korea Zinc, Ark Energy, to look into building a green hydrogen export facility at the port.
The proposal is to send as much as 1.8 million tonnes of green ammonia, made using green hydrogen, out of the country annually.
Singapore, Korea and Japan are keen participants in the burgeoning inustry on Queensland’s coastline.
In May, Singapore company Keppel Infrastructure joined Japanese companies Iwatani Corporation, Kansai Electric Power Company and Marubeni Corporation, and the Queensland government-owned Stanwell Corporation in the Central Queensland Hydrogen (CQH2) project.
Their plan is to build a green hydrogen site in Gladstone that makes use of the existing infrastructure and experience that came with the installation in the 2010s of three separate coal seam gas liquefaction export facilities.
The state is expected to receive $1.27 billion in royalties in fiscal 2023 from the $70 billion export industry, due to the way it taxes fossil gas – a figure analysts say could be six times as high with some tweaks.
But with a time limit on how long fossil gas can still be extracted and exported, given it’s a finite resource, Queensland has been casting around for a replacement.
State-owned Stanwell has been handling the CQH2 project since 2020. The government hopes tht particular project might support up to 8,900 new jobs at its peak, deliver $17.2 billion in hydrogen exports, and add $12.4 billion to Queensland’s Gross State Product over its 30-year life.
Who’s buying
The hope is that buyers for green hydrogen-made export products, either as ammonia or liquefied hydrogen, will come from Japan, Korea, China and Singapore, says Australian Renewable Energy Agency (ARENA) CEO Darren Miller.
He said in May that Australia is well positioned to capitalise on export opportunities to Asia, but will need to act fast if it wants to beat others to the punch and build out the massive infrastructure required to deliver export green hydrogen at a globally competitive price.
“Stanwell’s project represents a near-term green hydrogen production opportunity at globally significant scale,” he said in a statement.
“The development of a renewable hydrogen hub in Gladstone could help decarbonise heavy industrial facilities in the region and create export supply chans.”
The price of $2 per kilogram has long been the supposed target that green hydrogen needs to reach to be competitive with fossil fuels.
But with the first electrolysers still being installed in Australia (Viva confirmed to RenewEconomy its electrolyser is on track for this year) it’s almost impossible to uncover how far away the country is price-wise from that goal.
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The Queensland government says there are 50 green hydrogen projects in varying stages of dress in the state to date but that CQH2 is the biggest.
Initially, it will just pip Fortescue Future Industries’ 500 MW Gibson Island project, which will make circa 191 tonnes per day capacity if it goes ahead, to feed Incitec Pivot’s company-located ammonia plant.
If the Abbot Point project were to go ahead, it would be the largest exporter, promising to ship 1.8 million tonnes of ammonia a day, but making 1500 tonnes of its own ammonia a day, liquefying 20 tonnes of hydrogen a day,and making a small amount with a 1.3 MW electrolyser on site.
Gladstone is also where Fortescue Future Industries is breaking ground on its electrolyser factory, where it hopes to make 2 gigawatts (GW) of the devices a year, and the focus of a green hydrogen hub by the state government and CSIRO.
The initial CQH2 plan is to install up to 640 megawatts (MW) of electrolysers and produce up to 200 tonnes per day of gaseous renewable hydrogen by 2028, to export. The government claims that by 2030 some 2.24 GW of electrolysers will produce as much as 800 tonnes per day.
The project is currently at the front end engineering design stage, the precursor to EPC (engineering, procurement and construction), to figure out technical issues and provide a rough cost.
Come one come all
Last week, Palaszczuk boasted of the international flavour of the state’s green hydrogen projects, saying the partnerships highlight globally “the benefits of investing in Queensland’s booming hydrogen sector”.
“W are committed to delivering a globally competitive energy solution that is centred around firmed, low-carbon electricity for industry, that benefits both Queensland and our consortium partners,” she said in a statement.
“We are invested in growing industries in Central Queensland by strengthening regional skills and employment to lower capital intensity and planning for the infrastructure to enable the industry to thrive.”
Can’t catch up
Although arguably the state with the country’s best renewable resources, Queensland is one of the most dependent on coal and has only recently jumped aboard the clean energy train.
In June it said it would legislate its multiple renewable energy targets – which rise to 80 per cent by 2035 – this year as part of a $62 billion investment plan over the next decade.
At 22 per cent of its grid, Queensland currently has the lowest renewable energy share of any state in Australia and will not overtake other states despite the targets.
The state Labor gvernment says it expects 22GW of new wind and solar, and another 12GW of batteries and pumped hydro, will be built by 2035, creating 100,000 jobs along the way.
This new energy, combined with plans for a ‘Supergrid’, are aimed at feeding burgeoning industries such as the Gladstone and Gibson Island green hydrogen facilities.
