The New South Wales (NSW) government has signed off on a $45 million funding agreement to help build the Hunter Valley Hydrogen Hub and assist emissions-heavy industries in reducing their reliance on fossil fuels.
The Hunter Valley Hydrogen Hub project, led by Origin Energy, will deliver approximately 55 MW of electrolyser capacity by 2026, with a goal of scaling to more than 1 GW capacity over the next decade. The electrolyser will be connected to the grid and renewable energy certificates will be surrendered so the electricity can qualify as “green”.
It is expected the first stage of the project will be capable of producing up to 5,500 tonnes of green hydrogen each year with most of the output to be used by explosives manufacturer Orica’s ammonia manufacturing facility on Kooragang Island. Hydrogen will also be made available for refuelling hydrogen buses and trucks at the hub.
Origin Future Fuels General Manager Ryan Willemsen-Bell said hydrogen has the potential help Australia reach its decarbonisation goals through substitution into industrial processes and manufacturing and by replacing diesel in heavy transport.
He did however say that government funding is crucial to the development of the technology.
“Support from government is vital to bridging the commerciality gap that exists for hydrogen projects today, helping to demonstrate the technology can be produced at scale,” he said.
The NSW government funding announcement follows a $70 million contribution from the federal government announced in mid-July.
Origin said that pending a final investment decision, construction of the Hunter Valley Hydrogen Hub is expected to begin in 2025 with first hydrogen production targeted from 2026.
NSW Energy Minister Penny Sharpe said the project will serve as a regional cornerstone of the hydrogen industry, accelerating the state’s shift towards clean technologies and net zero.
“The Hunter area is one of NSW’s leading industrial regions … and has a critical role to play in our state’s clean energy transition,” she said.
“Projects like the Hunter Valley Hydrogen Hub are vital to decarbonising the industrial sector as we work towards a net-zero future.”
Sharpe said a green hydrogen industry in NSW has the potential to support 10,000 new jobs and add $6.4 billion in gross state product.
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