Queensland government-owned energy company Stanwell is rethinking its green hydrogen strategy after confirming the state government ruled it will not invest further in the proposed $12.4 billion (USD 7.55 billion) Central Queensland Hydrogen (CQ-H2) project.
Stanwell is part of a consortium of Australian, SIngaporean and Japanese energy companies developing the CQ-H2 project that was to initially involve the installation of up to 720 MW of electrolysers to produce up to 73,000 tonnes of green hydrogen per year for domestic use and export. It was proposed the project would ultimately scale up to 2.88 GW of electrolysis capacity to produce more than 1 million tonnes of renewable hydrogen per annum.
The proposal is however now in jeopardy after Queensland Energy Minister David Janetzki announced the state government will end support for the project.
“The Queensland government will not be committing the substantial equity and grant funding requested for Stanwell Corporation Limited to progress the CQ-H2 project,” he said.
“It would have required significantly more than $1 billion in state government funding, including infrastructure for water, port, transmission and hydrogen production.”
Janetzki said the renewable hydrogen investment “does not align” with the government’s expectations for generators to “provide affordable, reliable and sustainable power” for Queenslanders.
Stanwell said that it and its consortium partners are now “considering the state’s announcement and that it is also “reviewing its involvement in other hydrogen initiatives and will work with relevant stakeholders regarding future steps for these projects.”
Australian Energy Minister Chris Bowen said he is “surprised and disappointed” by the Queensland government’s move but added the federal government remains supportive of the project which was one of six shortlisted for its $2 billion Hydrogen Headstart program
“The Albanese government is firmly committed to seeing Gladstone’s economy grow and creating new jobs for the region,” Bowen said.
“Green hydrogen plays to Australia’s unique strengths and we’re unapologetic about pursuing an industry that is recognised as having an important role in the future of manufacturing and energy in Australia, and globally.”
“Government support in developing hydrogen opportunities around the country provides additional certainty for projects, however how they progress ultimately remains a commercial decision for the parties involved.”
The CQ-H2 project, which has signed an agreement to source renewable energy from the 380 MW Aldoga Solar Farm being built by Spanish renewable energy company Acciona Energia, is currently completing the Front End Engineering Design (FEED) stage with Stanwell having previously signaled a final investment decision for the initial phase would be made by in mid-2025.
The Queensland government’s decision to end its support for the CQ-H2 project comes after it scrapped the Pioneer-Burdekin pumped hydro energy storage project planned for the state’s central coast.
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