A step towards creating a Central Queensland hydrogen export industry

2 January 2020

Stanwell has a vision for a large-scale, low emissions, hydrogen export industry in Central Queensland. Central Queensland is an ideal location for scaling up the hydrogen industry due to its high quality renewable energy resources, available land and water and access to major port infrastructure. It also has relevant recent experience in delivering new, large-scale industry.

In order for Australia to position itself competitively for participation in global hydrogen export markets, its domestic markets will need to be developed and expanded over time. In driving down the cost of hydrogen production, the Stanwell Hydrogen Project will be a step towards realising its Central Queensland vision.

“We see it in childhood development – you crawl before you walk – and the Stanwell Hydrogen Project is a step along the pathway to scale. Supporting the National Hydrogen Strategy, our project could play a role in driving down the cost of domestic hydrogen production by deploying at large scale and high utilisation,” said Chief Executive Officer, Richard Van Breda.

Set to be one of the largest hydrogen electrolysis demonstration plants of its kind in Australia the ten megawatt or more plant could facilitate the development of the domestic market in advance of export demand realisation from 2030 onward.

“Our discussions in Japan and Korea have confirmed that export demand is likely to grow strongly from 2030. This means that in the meantime, domestic demand for low emissions hydrogen will require stimulation.

“This is likely to be achieved by a combination of reduced hydrogen production cost, grant funding support and the emergence of price premiums for low emissions hydrogen rich products, such as fertilisers and explosives,” Mr Van Breda said.

Stanwell’s ultimate role in the scale up of the hydrogen industry will be determined as part of its feasibility study, but a broad spectrum of options are being considered. These range from the provision of services (e.g. land, power and water) through to project and supply chain development.

While the Stanwell Hydrogen Project is likely to be co-located at a coal-fired power station, Stanwell is committed to developing a carbon neutral product and has identified two options to achieve this:

  • contractual greening – a widely used method involving the purchase of large-scale generation certificates (LGCs) from renewable energy projects equivalent to 100 per cent of energy requirements; and
  • biomass co-firing to cover the energy requirements of the production process.

“We’ve been transparent about our approach with potential customers, investors and other interested parties – and the general consensus is that ours is a valuable and valid approach to producing lower cost hydrogen while minimising the project’s carbon footprint,” said Mr Van Breda.

Producing ‘green’ hydrogen

‘Green’ hydrogen can be produced by directly connecting an electrolysis facility to a renewable energy installation. In Australia, wind or solar are the most obvious power source. However, without storage, the achievement of high plant utilisation is challenging, due to the variable nature and low capacity utilisation of weather dependent power sources.

Connecting an electrolyser to the electricity grid can achieve high capacity production. However the use of grid electricity will create emissions based on market emissions intensity at the time of production. To create a carbon neutral product these emissions would need to be offset in a similar way to what Stanwell is proposing.

For more information, visit our hydrogen project page or email hydrogen@stanwell.com.

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