Essay by Eric Worrall
Energy of the future? Even a $28.3 million grant from the West Australian Government company was not enough to push the project over the line.
Australian green hydrogen project scrapped due to transport costs, pumped hydro on hold
Giles Parkinson 26 July 2023
Canadian gas giant Atco says it has scrapped plans for one of the first commercial scale green hydrogen projects in Australia, despite strong funding support from the government’s renewable agency, and has also put a proposed pumped hydro project in NSW on hold.
Atco had planned to build a 10MW green hydrogen electrolyser next to Bright Energy’s 180MW Warradarge wind farm in Western Australia (pictured above), fuelling the plant with renewable energy and producing 4.3 tonnes of green hydrogen a year.
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But Atco’s $53 million Clean Energy Innovation Park – also known as the Mid West project – has been scrapped because it would involve trucking the hydrogen to points where it can be injected into the gas network.
Atco has now decided that this is not viable and says it will relinquish the $28.3 million grant promised by ARENA.
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Atco says it is still confident green hydrogen can be delivered, but says it needs to be located closer to heavy industry where the green hydrogen can be used.
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This cancellation casts a long shadow over Australia’s alleged renewable hydrogen revolution.
Renewable projects need vast acreages of cheap land, but major gas pipelines are rarely built to the middle of nowhere.
So unless Aussie governments are prepared to sweeten the pot even further, pour ridiculous sums of money into building hydrogen ready pipelines between proposed hydrogen parks and the rest of the gas network, why would anyone proceed with green hydrogen projects which even with subsidies are struggling to be commercially viable?
Even funnier, if Aussie governments do pour money into building a pipe network, all that extra public spending will drive up inflationary pressures, which will in turn drive up interest rates and the cost of borrowing money to fund major projects.
Either way, Aussie green energy enthusiasts lose.
The only remaining questions, why didn’t Atco instead choose to store their hydrogen, instead of piping the hydrogen, and use the hydrogen as energy storage, to “firm” electricity output from the Warradage Wind Farm? Or alternatively, they could have converted the hydrogen to green Ammonia, which is much easier to store or transport than green hydrogen?
I think we all know the answer to those questions.