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Renewables, Climate and Future Industries Tasmania

Tasmania’s funding and investment strategy

Tasmanian Renewable hydrogen industry Development funding program - Overview

The Tasmanian Government is highly supportive of the development of a renewable hydrogen industry in Tasmania, both for domestic and export applications, as outlined in the Tasmanian Renewable Hydrogen Action Plan.

Status of the funding program

The $50 million Tasmanian Renewable Hydrogen Development Funding Program has now closed.

From the first round of the Program, the Government provided $2.6 million to support three feasibility studies investigating large-scale renewable hydrogen projects in Tasmania. These studies have now concluded, with results announced on 27 July 2022.

These studies are:

Applicant

Feasibility Study

Origin Energy

Origin’s feasibility study examined the feasibility of a large-scale green hydrogen and ammonia project at Bell Bay, with an initial production rate of 420,000 tonnes of green ammonia per annum.

The study proposes a plant designed to enable flexible operation, with an estimated electrical load of more than 500 MW. Some green hydrogen and green ammonia will be available for domestic use, however the main focus of the project is to produce green ammonia for export to Asia. Origin is targeting delivery of its first green ammonia shipment by 2027, with international growth in demand expected to occur after 2026.

In April 2022, Origin Energy was announced as a recipient of $3 million from the Australian Government's Clean Hydrogen Industrial Hubs Program (Hub Development and Design funding stream) to support Front End Engineering Design (FEED) for its Tasmanian project.

Download the Origin Energy Knowledge Sharing Report (PDF 8MB)

More information on Origin Energy

ABEL Energy

ABEL Energy’s feasibility study investigated the feasibility of a 100 MW electrolyser plant to produce green hydrogen and green methanol at Bell Bay for domestic and export use.

Increasing global demand for green methanol has subsequently led ABEL Energy to increase the scale of its proposed operations to produce sufficient green hydrogen for 200,000 tonnes per annum of green methanol. Additional green hydrogen will also be available for local offtakers. Biogenic carbon oxides for the methanol production process are to be derived from local wood waste or from direct capture of CO2 from the atmosphere.

ABEL Energy is looking to obtain regulatory approvals and complete the project design.

Download the ABEL Energy Knowledge Sharing Report (PDF 15MB)

More information on ABEL Energy

Grange Resources

Grange Resources' feasibility study explored the potential to use hydrogen to replace natural gas for industrial heating within their pelletising facility located at Port Latta.

Grange Resources estimates that it will require a 90-100 MW renewable hydrogen production facility to replace its current natural gas consumption whilst a study into electrical heating and recuperation of process air to reduce natural gas and hydrogen usage has commenced.

The study confirmed that, at a concept level, the conversion from natural gas to hydrogen in Grange’s furnaces is technically possible but there are economic challenges to overcome with converting furnaces to hydrogen.

Download the Grange Resource’s Knowledge Sharing Report (PDF 5MB)

More information on Grange Resources

The Tasmanian Government also announced Fortescue Metals Group's potential development of a 250 MW hydrogen and green ammonia production facility at Bell Bay, which is targeted for an investment decision in 2021.

Subject to this decision, the project has the potential to create more than 350 construction jobs and 100 operational roles for the initial phase utilising Tasmania's renewable energy resources, there is opportunity for further expansion.

More information on Fortescue Metals Group.

Industry activation study

Following on from the conclusion of the first round of the Tasmanian Renewable Hydrogen Development Funding Program, this Study was carried out to identify near-term domestic projects that could activate a renewable hydrogen industry in Tasmania.

The transport sector was identified as the most promising area for the consumption of renewable hydrogen in the near-term, particularly in the heavy vehicle segment which includes buses and trucks. A key initiative is the demonstration of hydrogen buses by Metro Tasmania, which will assist with building public awareness of the emerging hydrogen sector and start to build Tasmania’s renewable hydrogen industry capabilities. A summary of the report is available here.

Creating investment opportunity

We are actively working with – and welcome- proponents interested in renewable hydrogen industry development in Tasmania for domestic use and export.

The Office of the Coordinator General has released a Tasmanian Renewable Hydrogen Prospectus that highlights Tasmania’s competitive advantages for renewable hydrogen production, with a focus on the Bell Bay Advanced Manufacturing Zone as an ideal hydrogen hub.

The Government remains open to engagement with proponents to fund viable hydrogen projects in Tasmania and ask that any interested parties contact the Office of the Coordinator General in the first instance.