ARENA launches $70 million hydrogen funding round

The Australian Renewable Energy Agency (ARENA) has opened the $70 million Renewable Hydrogen Deployment Funding Round as the National Hydrogen Strategy kicks into gear to help accelerate Australia’s development of a renewable hydrogen industry. 

The Renewable Hydrogen Deployment Funding Round was announced late last year as part of the adopted National Hydrogen Strategy. The round is an invitation for expressions of interest for large-scale renewable hydrogen projects. This is to say, two or more large-scale projects with electrolysers of a minimum of 5 MW capacity, but with a preference for 10 MW projects or bigger. Thanks to Australia’s solar resources ARENA expects these projects to be among the largest electrolysers in the world. 

All of this is to be funded toward the goal of bringing down the price of hydrogen production in Australia, ‘H2 under $2’. The importance of renewably sourced hydrogen such as that sought in this Funding Round is especially important considering the National Hydrogen Strategy remains “technology-neutral”. 

Although Australia’s Chief Scientist Alan Finkel pushed Australia toward hydrogen produced by solar and wind during the Strategy discussions, he also remained attached to the fossil fuel-CSS idea. So it is then that now Australian hydrogen will be produced using renewable energies, and via fossil fuels with “substantial” carbon capture and storage (CCS). Of course, developing a hydrogen industry using fossil fuels may seem about as ill-fated as the Titanic, but I guess Energy Minister Angus Taylor and Prime Minister Scott Morrison are counting on the fact that, in the near future, there will be no icebergs left anyway.

The need of a Funding Round has been demonstrated by the already $55 million ARENA has committed in funding for pre-commercial activities such as feasibility studies including Dyno Nobel, Queensland Nitrates, Yara and Stanwell. As ARENA itself put it: “The preliminary feasibility outcomes indicate a significant commercial gap and it is expected that grant and concession funding will be required for hydrogen production facilities in the short to medium term.” 

ARENA CEO Darren Miller said the funding round is a significant step in progressing the commercialisation of hydrogen production in Australia and opening up domestic and international hydrogen market opportunities.

“With this significant investment we expect to take the sector to the next level,” said Miller. “To take advantage of hydrogen’s potential, we need to increase the scale and reduce the costs of electrolyser installations in Australia. Through this round, ARENA aims to share knowledge on technical and commercial parameters for commercial-scale renewable hydrogen production for domestic and international markets.”

Tell Him He’s Dreamin’ 

Whether Australia can develop a hydrogen industry domestically is not in doubt. But whether Australia can develop a hydrogen export industry certainly is. 

Some studies have shown the growing demand for hydrogen could result in an export industry worth $1.7 billion by 2030, and could provide 2,800 jobs, most likely regional ones. On top of this, two international reports have confirmed Australia’s potential as a future major hydrogen supplier. The World Energy Council identified Australia as a ‘giant with potential to become a world key player’, while the International Energy Agency projected that Australia could easily produce 100 million tonnes of oil equivalent of hydrogen, which could replace 3% of global gas consumption today.

However, a report by The Australia Institute (TAI) released in the run-up to the COAG meeting found the projected demand for hydrogen had been overstated. The think-tank argued the hydrogen export projections from consulting firm ACIL Allen, which the government is referring to, were 11 times higher than Japan’s official target, noting that even the low demand projection is two and half times the official target. The projections for South Korea are similarly high by comparison with government plans.

ARENA CEO Darren Miller seems convinced that Australia is well placed to become a major renewable hydrogen producer and exporter. Of course, the latter is dependent on the former, and it is the former we should be focusing on lest we count our eggs before they hatch. 

Expressions of interest are now open until Tuesday 26 May (5pm AEST) via ARENA’s funding page.