A multi-million dollar green hydrogen development in Western Australia has been canned despite receiving support from the federal and state governments.
Canadian conglomerate ATCO will no longer go ahead with its plans to build a Clean Energy Innovation Park (CEIP) in Warradarge, Western Australia because its distance from heavy industry made it commercially unfeasible, as first reported by Business News.
The facility, expected to be co-located with Warradarge Wind Farm, aimed to produce 1,200 tonnes of green hydrogen per annum though a 10MW electrolyser for use in gas blending which would’ve been transported by truck on a daily basis.
The Australian Renewable Energy Agency (ARENA) announced it would award ATCO up to $28.7 million in grant funding, however, “changes in project fundamentals” means this will now not be taken up.
ATCO estimated the capital expenditure of the project would be $46.1 million in 2021.
In a statement, the firm said that it “still intends to explore a commercial hydrogen facility however believes it is more feasible to identify opportunities closer to heavy industry where demand will justify the investment”.
“While we were initially confident we could build CEIP at Warradarge, our ongoing assessment and market development found the benefits of being closer to the end-user of the renewable hydrogen was more commercially viable than locating the CEIP in a more remote location,” ATCO said.
“We are confident that as the hydrogen economy in Western Australia grows and demand for renewable hydrogen increases, developing hydrogen plants across the state will become a reality.”
In January 2020, ATCO had also received a $375,000 grant to undertake a feasibility study for the project through the Western Australian government’s Renewable Hydrogen Fund.
ATCO had previously described the CEIP project as “one of the critical first steps of Western Australia’s Hydrogen Pathway” in a knowledge sharing report published as a condition of the grant received from the state government.
It was supposed to build on the pilot work undertaken at ATCO’s Clean Energy Innovation Hub, which trialled the operation of a hybrid energy system microgrid which integrated hydrogen, gas, solar, and battery storage. ARENA also previously committed $1.5 million to this project.
The Western Australian government set a one per cent hydrogen use target for its electricity grid at the end of last year.
The federal government’s national hydrogen strategy is in the process of being refreshed, with consultation also open on its flagship $2 billion hydrogen production credit, the Hydrogen Headstart program.
