$2 billion for green hydrogen in Australia
The Australian Renewable Energy Agency (ARENA) has today welcomed new funding for the Hydrogen Headstart initiative announced in the 2023-24 Federal Budget.
The largest green hydrogen projects to be built in Australia will be supported by the $2 billion
Hydrogen Headstart initiative, according to the Australian government.
Through competitive production contracts, funding will offer revenue support for investments in renewable hydrogen production. The commercial difference between the cost of producing hydrogen from renewable sources and its current market price will be filled with funding.
Two to three flagship projects that could produce up to 1 gigawatt of hydrogen electrolyser capacity will be supported by Hydrogen Headstart.
In consultation with the Department of Climate Change Energy Environment and Water, ARENA has been given $4.2 million this year to support the creation and administration of the program (DCCEEW).
“Hydrogen Headstart will catalyse Australia’s hydrogen industry and other clean energy industries, and help position Australia as a global hydrogen leader,” ARENA CEO Darren Miller said.
In the upcoming months, the program will be developed in collaboration with DCCEEW, business, and communities.
According to Mr. Miller, the Hydrogen Headstart program will guarantee that large-scale hydrogen projects that are already in development can get underway in Australia.
“Australia has an unparalleled opportunity to become a global green hydrogen leader, but we can’t afford to lose our momentum as other competing countries step up their ambitions and support,” he said.
“With this funding, we are looking to incentivise green hydrogen production in Australia by backing early projects that will be among the largest in the world.
“This funding will reduce the cost of green hydrogen produced via renewable electricity and will scale up our hydrogen sector. These projects will create thousands of regional jobs and will help reduce emissions in industry in line with our climate targets,” he said.
According to recent McKinsey research and modeling by DCCEEW, Australia's hydrogen industry could add $50 billion to the country's GDP by 2050, support more than 13,000 regional jobs, and create an additional 13,000 jobs through the building of new renewable energy infrastructure.
This program expands on ARENA's prior work in hydrogen and track record of completing game-changing projects in the energy transition toward net zero.
ARENA has provided $236 million to 43 renewable hydrogen projects from early stage research to deployment projects including hydrogen refuelling and hydrogen trucks, hydrogen for producing green ammonia, hydrogen for use in alumina refining, gas blending and remote power.
Last year, ARENA conditionally approved $47.5 million for the first 10 MW electrolyser plant in the Pilbara being built by ENGIE as part of a $103 million Renewable Hydrogen Deployment Round.
ARENA has also recently announced $25 million for hydrogen research and developing funding, and $50 million for four hydrogen projects supported as part of the joint Australian-German HyGATE initiative.
Having provided more than $2 billion for over 650 renewable energy projects over the last decade, ARENA is now focussed on how Australia can maximise its advantage in renewable energy to become a clean energy superpower in a net zero global economy.
“ARENA is delighted to be involved in the design of this game-changing hydrogen funding initiative.”
Further information will be available on ARENA’s website. Interested participants can register their interest via DCCEEW’s website.
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