Stanwell’s utility-scale green hydrogen plans get financial shot in the arm

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The Australian Renewable Energy Agency (ARENA) has announced a $1.25 million grant to Queensland government-owned electricity generator Stanwell to assist a feasibility study for a renewable hydrogen demonstration plant, which will be collocated with the corporation’s existing power station, south-west of Rockhampton. Commenced in July last year, Stanwell’s $5 million study is investigating the technical and economic feasibility of the installation of 10 MW or greater of hydrogen electrolysis, which, if built, would be the largest green hydrogen electrolysis plant in Australia.

To offset 100% of the emissions associated with running the electrolyzer, Stanwell will procure energy and green certificates from renewable energy projects in the region. This would be yet another innovative deal for the publically owned generator following the last year’s network support agreement between Stanwell’s Kareeya Hydro Power Station and Pacific Hydro’s 100 MW Haughton Solar Farm. Under the deal, the services provided by Kareeya will strengthen the regional grid, which is subject to lower system strength levels, in such a way as to enable the solar project to generate in compliance with generator performance standards.

Along with determining the technical design, configuration, and options for utilizing the existing infrastructure at the site, a key outcome of the study will be to define the highest value end use for the renewable hydrogen produced. The utility-scale electrolyzer would enjoy the advantages of the existing power station in being able to use pre-existing land approval, network connection and access to demineralized water which is required for hydrogen production.

The project is said to offer a unique proposition in demonstrating the role that renewable hydrogen production can play to benefit the electricity system. Namely, the hydrogen electrolyzer could be used as a complementary energy market load that can ramp up in times of excess energy supply, such as peak solar output during the day. It could also aid system security through participation in Frequency Control Ancillary Services (FCAS) markets or future markets such as Fast Frequency Response (FFR).

“Through Stanwell’s feasibility study we’re showing a new option for producing and using renewable hydrogen. This will create opportunities across the domestic economy and help to position Australia to become a major renewable energy exporter,” ARENA CEO Darren Miller said. The ongoing study is expected to be completed in late 2020.

With the hydrogen industry in its infancy in Australia, the study would determine the optimal conditions for electrolyzers operating at high capacities. “The construction and operation of a utility-scale electrolyzer is important to demonstrate the costs associated with producing renewable hydrogen at scale,” Miller said. “If feasible, this could help underpin future commercial scale deployments leveraging existing network infrastructure at other power stations, and play a role in driving down the cost of domestic hydrogen production.”

Under its investment priority focused on accelerating Australia’s hydrogen industry, ARENA has committed approximately $50 million towards hydrogen initiatives so far, including over $22 million to R&D projects, and almost $28 million to demonstration, feasibility and pilot projects. In some of its earlier Queensland initiatives, ARENA announced it was providing $2.9 million in funding to two studies looking at the potential to use solar and wind-powered hydrogen produced via electrolysis to increase ammonia production at facilities which currently rely on gas as feedstock.