Queensland commits A$25m to green hydrogen partnership

Out-Law News | 24 Feb 2021 | 1:27 am | 2 min. read

Australia’s Queensland state government has committed A$25 million to a renewable hydrogen partnership between state owned CS Energy and IHI Corporation of Japan.

The two sides will prepare a feasibility study of a new renewable hydrogen demonstration plant on Queensland's Western Downs. It is the second hydrogen collaboration in three months between Queensland and Japanese energy companies.

The proposed renewable hydrogen site is next to CS Energy's Kogan Creek Power Station near Chinchilla, a 750-megawatt (MW) coal fired power station. The plan for the new plant includes the co-location of a solar farm, battery, hydrogen electrolyser and a hydrogen fuel cell.

CS Energy said it would be one of Australia's 'few truly green hydrogen projects' with plans to power the hydrogen electrolyser by behind-the-meter solar energy. The feasibility study will also explore whether plans for the plant to support grid stability are viable through the provision of services such as Frequency Control Ancillary Services. 

CS Energy is pursuing the project to ensure it has the requisite technical experience to enter the hydrogen market once it becomes commercially viable, it said.

“CS Energy's approach is indicative of its intentions to promote and invest in its domestic hydrogen market,” said George Varma of Pinsent Masons, the law firm behind Out-Law.

"We have recently seen the Western Australian government announce its second funding round for hydrogen projects in Western Australia. The funding provided by the Queensland government is a prime example of the type of investment required at a government level to drive the growth and investment in our domestic hydrogen market,” he said. “While it may still be some time before hydrogen is a cost and energy efficient way of power storage and grid stabilisation in the future, there is significant research and development being deployed to develop these technologies and achieve the necessary efficiencies. However, another interim market to keep on the radar is the mining sector, where hydrogen will be a critical component for decarbonisation.”

“As the mining sector drives significant economic activity in both Queensland and Western Australia, there will be a clear and more immediate need for hydrogen to be deployed on these projects. Through using fuel cells for heavy haulage vehicles and potentially shipping, along with the goal of using hydrogen as an energy storage vector for mining operations, it is clear that there will be a strong domestic demand for hydrogen in these markets."

“The Queensland government is confident that its proximity to Asia, its existing infrastructure and its ability to generate renewable energy provide it with a unique competitive advantage in the production of renewable hydrogen. The lure of partnering with countries like Japan and South Korea, both of which have declared their intent to be net importers of hydrogen in the future, is a coveted prize that Australia is very focused on winning,” said George.   

“Australia is well positioned to be a net exporter of hydrogen in due course. As we continue to push the development of our domestic market and large scale hydrogen production becomes more economical, this is a clear way forward. With the success of the Australian LNG market, Australia now being the largest exporter of LNG in the world, we have a very good footprint upon which to base the development and export of hydrogen. This is an exciting market to be involved in at a time where growth and opportunities are rife,” he said.