Tasmanian Renewable Hydrogen Industry Development Fund
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 (PDF 2.2 MB).
The $50 million The Tasmanian Renewable Hydrogen Development Funding Program was launched in May 2020 and the second round of funding was announced in September 2023 to hlep activate renewable hydrogen industry development in Tasmania.
Round one of The Tasmanian Renewable Hydrogen Development Funding Program has now closed.
There was strong interest, with 23 submissions received through this process, with a mix of proposals from feasibility studies and infrastructure projects.
The applications covered the production, distribution and use of renewable hydrogen, with a wide-variety of potential end uses, including transportation.
Based on the recommendations of the Independent Assessment Panel, the Tasmanian Government announced it is providing $2.6 million to support three feasibility studies investigating large-scale renewable hydrogen projects in Tasmania arising from this first round of the Program.
The program guidelines are available here.
These studies are:
| Applicant | Feasibility Study |
|---|---|
| Origin Energy | Origin's feasibility study is looking at developing a large-scale green hydrogen and ammonia plant 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. Subject to the feasibility study results, Origin are targeting delivery of its first green ammonia shipment in the mid-2020s. More information on Origin Energy |
| ABEL Energy | ABEL Energy's feasibility study will examine the feasibility of deploying a nominal 100 MW electrolyser plant to produce green hydrogen and green methanol at Bell Bay for domestic and export use. ABEL estimates that the methanol synthesis plant will consume 38 tonnes H2/day, with up to a further 6 tonnes H2/day available to local offtakers. Carbon Dioxide (CO2) for the methanol production process is to be derived from local wood waste, or from direct capture of CO2 from the atmosphere. More information on ABEL Energy |
| Grange Resources | Grange Resources's feasibility study will explore the potential to use hydrogen to replace natural gas for industrial heating within their pelletising facility located at Port Latta. If this proves to be technically and commercially feasible Grange Resources estimates that it will require a 90-100 MW renewable hydrogen production facility. More information on Grange Resources |
Project Funding and next steps
The Assessment Panel did not recommend that any projects continue to stage 2. Therefore, this round of funding has now ended.
The key challenge for most applicants was articulating a hydrogen offtake strategy that was viable over the next few years and that could be supported within the funding available in the Program.
The Assessment Panel, therefore, recommended that more work be done to clarify market opportunities and government support for hydrogen offtake in Tasmania.
The Department of State Growth will be expediting further detailed investigations of end-use opportunities, such as hydrogen buses, that could be incorporated into domestic-sized renewable hydrogen projects in Tasmania.
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.
As this round of funding has closed, applicants are now free to engage with government businesses to further develop proposals.
The Tasmanian Government announced a further round of funding under the Tasmanian Renewable Hydrogen Industry Development Fund (TRHIDF) in September 2023 to assist the local renewable hydrogen industry develop in Tasmania.
The Government is allocating up to $8 million from the Tasmanian Renewable Hydrogen Industry Development Fund to reduce the sale price of green hydrogen within Tasmania. The funding aims to bring the sale price of green hydrogen down to a level that is competitive with other energy/fuel sources to become an attractive substitute for end users.
It is expected that the funding will ensure that a stable sale price for renewable hydrogen is established, and maintained, for a number of years. Ensuring a stable, long-term green hydrogen price and supply will further encourage industries and sectors considering green hydrogen as an alternative zero emissions energy or fuel source.
The successful applicant(s) under this scheme will receive funding on a per kilogram basis of green hydrogen sold to end-users. Payments will be based on the difference between the agreed sale price and the cost of production (determined through the application process). It is expected that this scheme will best support small to medium scale green hydrogen production projects within the range of 5-10MW. However, this is not a requirement, and the government welcomes all proposals that meet the eligibility criteria.
The Green Hydrogen Price Reduction Scheme opened for applications on 25 October 2023 and closed on 6 December 2023. It is expected that successful applicants will be announced in early 2024.
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