AGL, Fortescue strike deal to turn Hunter coal plants into huge green hydrogen hub

Australia’s biggest polluter AGL Energy has struck a deal with iron ore billionaire and green hydrogen evangelist Andrew Forrest to turn its Hunter Valley coal fired power stations into a major renewable hydrogen and industrial hub.

The vision shared by AGL and Forrest’s Fortescue Future Industries is to power the “Hunter Energy Hub” with wind, pumped hydro, solar thermal storage, and grid scale batteries, and to attract industry to the facility.

The ageing Liddell coal generator is due to close in early 2023, and Bayswater is expected to run for another decade or so, although many analysts anticipate an earlier closure.

The MoU is one of dozens signed in Australia and around the world by FFI as it seeks to deliver on Forrest’s highly ambitious plan to produce 15 million tonnes of green hydrogen a year by 2030. Those plans include huge electrolyser factory in Queensland, and a potential gigawatt scale solar manufacturing facility.

“Fortescue is leading the charge on the development of green hydrogen in Australia and abroad, and we are excited to bring our site and expertise in large-scale renewable generation to the fold,” AGL CEO Graeme Hunt said in a statement.

“We believe this project, along with the others in our Hunter Energy Hub, could drive the development of around 1,000 permanent jobs across energy production, advanced manufacturing, recycling and the production of chemicals.”

Hunt said that early estimates showed the site could ultimately support a hydrogen facility of gigawatt scale, but that will depend on renewable energy costs, firming requirements, electrolyser capital costs, demand for the product and logistics.

“Over the next 12 months we will undertake a feasibility study which will map key operational and commercial plans for the project and enable the development of a production timeline,” he said.

Forrest, who has built up a team of more than 500 experts at FFI, and has signed multiple early stage deals across the country (and overseas), said his goal is to turn regional Australia into the “global green energy heartland” and create thousands of jobs.

“Repurposing existing fossil fuel infrastructure with forward looking companies like AGL to create green hydrogen to help power the world, is the solution we have been looking for,” Forrest said.

“Green hydrogen is the only true zero-carbon, zero-methane fuel – every other type of hydrogen requires the burning of fossil fuels.”

Forrest noted that the Liddell and Bayswater coal power stations accounted for nearly half of NSW’s carbon dioxide emissions, and the new renewable hydrogen hub would slash those emissions and prove the role of green hydrogen in decarbonising and “de-methaning” energy and industry in Australia.

“Pending the feasibility study’s outcomes, initial renewable electricity production through new wind and solar could be 250MW, generating 30,000 tonnes of green hydrogen per year or enough for a hydrogen fuelled truck to drive to the moon and back five times,” he said.

The Hunter Valley is just the latest ageing fossil fuel centre to experience a shift to green technologies. AGL is already building a big battery at the Torrens Island gas hub in Adelaide, and has also proposed a big battery at the site of Loy Yang A in Victoria.

Engie is committed to a big battery at the site of the now closed Hazelwood generator, while EnergyAustralia has an even bigger battery in mind to replace the Yallourn brown coal generator that will close in 2028.

The Hunter Energy Hub will draw on previously canvassed investments such as the 250MW Liddell battery, the big Oven Mountain pumped hydro project to the north, and an expansion of AGL’s initial push into solar thermal energy.

It also canvasses a 450MW wind farm at Bowmans Creek, and potential data centres, intensive agriculture, and advanced manufacturing facilities.

AGL chief operating officer Markus Brokhof said that, upon completion, the Hunter Energy Hub would be the first of its kind in Australia and set a model for our other sites and industry in Australia.

“Our aim for the hub is to develop strong partnerships that enable an efficient ecosystem and create a circular economy,” Brokhof said.

“Liddell and Bayswater benefit from unique energy infrastructure, positioned with strong grid connectivity, established transport links, workshops and proximity to water supply and industrial activity.

“As we move towards Liddell’s closure, I want to reaffirm our strong commitment to supporting our workforce and the Hunter region.”

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