$64m for two hydrogen hubs in NSW

Brandon How

Two hydrogen projects in New South Wales will share in $64 million in support from the state government, with the announcement coming three weeks out from the next election.

At the same time, the state government has announced the opening of $1.5 billion in electricity concessions for large-scale green hydrogen producers.

Both programs were committed to under the NSW Hydrogen Strategy in 2021.

The funding will support initial development of a 10MW electrolyser near Port Kembla, which will have an annual green hydrogen production capacity of around 1,460 tonnes, and a 12MW electrolyser near Moree for the production of green ammonia.

BOC’s Illawarra Hydrogen Technology Hub near Port Kembla will also feature at least four hydrogen refuelling stations, sufficient for powering up to 40 heavy vehicles per day. It aims to expand electrolyser capacity to 650MW in the long term to support decarbonisation of local steel, glass, and cement production.

These projects were selected from a shortlist of 10 projects. Total funding earmarked for the hydrogen hub initiative is for up to $150 million.

The green ammonia project is located at Sundown’s Keytah cotton farm and will supply fertiliser to farms in the surrounding region. Overtime, the project’s capacity will scale to 112MW.

Currently, the state’s hydrogen strategy is targeting scaling electrolyser capacity to 700MW to produce 110,000 tonnes of green hydrogen per annum by 2030. It also hopes to have 100 hydrogen refuelling stations and 10,000 hydrogen vehicles in the state by that time.

NSW Treasurer Matt Kean described the funding and concessions as “globally competitive”, and would push green hydrogen costs to the NSW Hydrogen Strategy target of less than $2.80 per kilogram by 2030.

“At the same time, green hydrogen producers across NSW are now able to access $1.5 billion in concessions to reduce costs for large scale investment, including up to a 90 per cent reduction in their electricity network charges if they connect to parts of the grid with spare network capacity,” Mr Kean said.

“These incentives will set us up for success as we compete with the high-profile US Inflation Reduction Act hydrogen incentives, because the NSW concessions can apply to projects finishing well beyond 2030, while the US program finishes in 2032.

“Green hydrogen can help drive deep decarbonisation in hard-to-abate market segments within the transport, industrial and energy sectors which account for around 18 per cent of NSW’s annual emissions.

“Providing these hard-to-abate sectors with a pathway to zero emissions is crucial to safeguarding their NSW business operations and employees, and setting them up to thrive in a global low-carbon economy.”

The funding comes after a joint venture between the Port of Newcastle and Macquarie for a hydrogen and ammonia production facility fell through, resulting in the release of a previous federal grant commitment of $41 million. It was part of a broader project for a Clean Energy Precinct, which is still going ahead and also includes plans to support ammonia and hydrogen production. A $100 million grant has been committed by the Commonwealth to support development of the precinct.

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