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Sorry a bit wonky

Gas pipeline giant APA Group and partner Woodside Petroleum have ditched their proposed renewable hydrogen project in Western Australia after they failed to win government support in the latest funding round, while the successful applicants race towards development.

APA and Woodside pitched for funds from the Australian Renewable Energy Agency for a proposed project in WA’s Central West, powered by APA’s Badgingarra wind and solar farm. They are, however, understood to have already backed away from the project before the news last week of the successful bids.

The plan was to produce green hydrogen for use in power generation, transport and industrial applications, and with longer-term options to deliver it by pipeline to Perth.

ATCO and Australian Gas Infrastructure Group plan to build a green hydrogen plant in Wodonga, Victoria.

But Woodside said that it and APA “have decided not to take the opportunity forward at the present time”.

APA declined to comment. It is understood the company intends to keep the project on the back burner and work with the WA government on its strategic hydrogen objectives.

Woodside, which has ambitions to leverage off its large LNG export business to capture a foothold in the emerging hydrogen market in Asia, also was not successful in the ARENA green hydrogen funding round for its Tasmanian project but will still pursue it, likely on a slower schedule.

Both the Badginagarra project and the H2TAS venture at Bell Bay were among seven green hydrogen projects shortlisted for funding by ARENA in its $70 million round.The funding was expanded to $103.3 million, split between three ventures, all involving overseas companies, including Hong Kong-listed Cheung Kong Group, France’s Engie and Canada’s ATCO.

Woodside and partner Countrywide Renewable Energy will now review the concept and schedule of their Tasmanian project, which is planned for the same industrial park asseparate projects planned by Fortescue Metals Group and Origin Energy. Fortescue is aiming for a final investment decision this year for its 250MW project which would produce 250,000 tonnes a year of green ammonia for domestic use and export.

“We understand there is strong support among community and government stakeholders for a phased approach that starts with a Tasmanian market,” a Woodside spokeswoman said.

BHP said it will continue to study the potential to trial the use of an electrolyser alongside renewable power at its Kwinana nickel refinery despite failing to secure ARENA funding for the project.

Macquarie Group declined to comment on plans for its hydrogen project with Anglo American at the Dawson coal mine in Queensland, now that its bid for ARENA funds also failed.

Meanwhile, among the three successful projects in the ARENA funding round, the Cheung Kong’s Australian Gas Infrastructure Group and Engie are aiming for a final investment decision by early 2022 for their $44 million Murray Valley Hydrogen Park in Wodonga, Victoria, where hydrogen will be produced for blending into the local gas network, starting in mid-2023.

December 2022 is the target date for a separate project by ATCO and AGIG at the Warradarge wind farm in WA’s Mid-West to produce up to 4 million tonnes a day for the gas network.

A separate project by Engie and Yara Fertilisers at Karratha is part of a large project aiming at export-scale green ammonia expects within a decade.

The three will each use 10MW electrolysers to split water into hydrogen and oxygen.

Numerous other proposals are in the works around Australia despite the absence of a market for green hydrogen.

Standard&Poor’s said in a report that it expects clean hydrogen to emerge as a fuel for buses and heavy trucks possibly in the second half of this decade, but for cars it would lose out to batteries which are “significantly more energy-efficient”.

S&P also voiced doubts about the pace that hydrogen would emerge in sectors such as steelmaking, which isbeing targeted by Fortescue Metals.

“Net zero commitments imply the full decarbonisation of hard-to-abate sectors such as steel, but using hydrogen to do so would be extremely costly,” said S&P analyst Massimo Schiavo.

S&P expects existing end markets for hydrogen such as oil refining, chemicals and later on possibly fertilisers to be among the early adopters of hydrogen. In power generation, hydrogen could play an important role beyond 2030 to provide storage and firm back-up power as the share of renewables increases, it said.

BothEnergyAustralia’s Tallawarra B gas power project in NSW, which was confirmed last week, and a power plant planned by Andrew Forrest’s Squadron Energy in Port Kembla will be designed to use a combination of gas and hydrogen.