Newcastle port eyes green hydrogen future

Macquarie Group, Snowy Hydro and Chinese-controlled pipeline owner Jemena are all involved in a group that will examine a potential green hydrogen hub in Newcastle that could have a capacity of 1 gigawatt by 2030.
  1. Macquarie Group, Snowy Hydro and Chinese-controlled pipeline owner Jemena are all involved in a group that will examine a potential green hydrogen hub in Newcastle that could have a capacity of 1 gigawatt by 2030.

    A $3 million feasibility study into the hub, led by Port of Newcastle and Macquarie’s Green Investment Group (GIG), will be half-funded by a grant from the Australian Renewable Energy Agency.

    The hub would initially use a 40 megawatt renewables-powered electrolyser to split water into hydrogen and oxygen, with the hydrogen to be used initially in the Hunter region, in agriculture, transport and energy generation. It could later lead to hydrogen exports from Newcastle, the world’s largest thermal coal terminal.

    Kate Vidgen, head of industrial transition and clean fuels at GIG, said that while countries around the world are pursuing green hydrogen opportunities, only a few projects have the attributes of the Hunter. She highlighted the region’s strong industrial heritage, several domestic and export use cases, existing transport and energy infrastructure, and its local skilled workforce.

    Ms Vidgen said the port has the scope to produce green hydrogen at the scale needed to make it price competitive internationally and said the study would better define domestic and export opportunities. The initial 40 MW project would generate enough hydrogen to power 900 buses for a year, she added.

    Macquarie CEO Shemara Wikramanayake has been a vocal advocate for Australia to capitalise on its natural advantages in abundant wind and solar resources and seize the opportunity in green hydrogen, which is expected to become a major globally traded commodity.

    Renewables-based hydrogen is one of the federal government’s priority technologies to help reach net zero emissions by 2050. It has set a stretch goal for green hydrogen production at less than $2 per kilogram, a level at which it would be competitive with traditional fuels for industry and transport. The NSW government last month announced up to $3 billion in incentives for green hydrogen production.

    But energy think tank Beyond Zero Emissions said more support was needed for renewables generation and transmission networks to power the green hydrogen plants, and for the local manufacture of electrolysers,

    Port of Newcastle CEO Craig Carmody said it made sense for the port to play a key role in Australia’s bid to become a significant exporter of renewable energy in the form of hydrogen.

    “By partnering with Macquarie’s Green Investment Group to develop the Port of Newcastle Hydrogen Hub Project, we are tapping into the expertise of a world-leading renewables developer, investor and financier,” Mr Carmody said.

    The project would incorporate a green ammonia plant, a green hydrogen plant and grid-connected renewable energy and could create thousands of low-carbon jobs and a new export industry for the coal-focused region.

    Japan’s Idemitsu, tram and rail operator Keolis Downer and Lake Macquarie City Council have also agreed to participate in the feasibility study, as has Macquarie’s agriculture platform, Macquarie Asset Management Agriculture, which has a focus on green ammonia for fertiliser production.

    Idemitsu’s interest is focused on the feasibility of exporting green hydrogen and ammonia to Japan, said the firm’s CEO in Australia, Kovac.

    The project will supplement federal government-owned Snowy Hydro’s renewables generation portfolio with dispatchable capacity to help meet customer demand when it is at its highest, said CEO Paul Broad.

    Snowy’s new Hunter gas power plant will be designed to run partly on hydrogen.

    “We expect hydrogen will play a role in the decarbonisation of Australia’s national energy mix in the decades to come, particularly once hydrogen is scaled and available on commercially attractive terms,” Mr Broad said.

    ARENA is already helping fund a study into large-scale hydrogen at Gladstone in Queensland led by Stanwell Corporation that involves APA Group and four large Japanese firms. That venture is aiming to start exports to Japan from 2026.

    Source: Financial Review