ARENA flooded with applications for green hydrogen project funding | RenewEconomy

ARENA flooded with applications for green hydrogen project funding

ARENA receives a flood of applications in response to $70m hydrogen funding round, highlighting the enormous interest in renewable hydrogen.

Silverton wind farm.

The Australian Renewable Energy Agency says it has received an overwhelming response from prospective hydrogen projects, with expressions of interest from dozens of projects wanting a slice of $70 million in grant funding.

ARENA revealed on Friday that is has received 36 expressions of interest from prospective hydrogen projects, representing more than $1 billion worth of funding requests, exceeding the funding available by almost 15-fold.

The agency says that the expressions of interest covered almost 500MW in proposed hydrogen production capacity, with project proposals ranging between 5MW to up to 80MW, with applications coming from every Australian state and territory.

ARENA formed the Renewable Hydrogen Deployment Funding Round to direct up to $70 million in grant funding to support an expansion of Australia’s renewable hydrogen production capacity, with a preference for commercial-scale electrolysers with a capacity of 10MW or greater.

The project proposals would see hydrogen used for a wide range of purposes, which can include hydrogen for use as a transport fuel, blending with mains gas supplies, as an energy storage medium and as a feedstock in the production of goods like ammonia fertilisers.

ARENA says that while it had $70 million on offer, it had received grant funding requests that massively exceeded that amount. When combined with private-sector co-funding across the 36 projects, the total proposed investment value was over $3 billion.

“We’re excited to see that there is such strong interest in renewable hydrogen from across a broad cross section of industry,” ARENA CEO Darren Miller said.

“This is an important step for the sector and it looks like we have many companies now ready to start building large scale renewable hydrogen projects across a range of industries and end uses.

“The fact that we’ve received expressions of interest for projects totalling over $3 billion in cost and almost 500 MW in size shows that we’re beginning to see companies embrace making hydrogen through renewable means.”

The funding round forms part of the federal government’s efforts to reduce the cost of renewable hydrogen to below $2 per kilo, a level which would see it become competitive as a transport fuel.

Federal energy and emissions reduction minister Angus Taylor said the strong response to the ARENA funding round showed the high level of interest in Australia’s renewable hydrogen sector.

“Australia has abundant resources that give us a distinct advantage when it comes to developing a hydrogen industry that can provide thousands of jobs across regional Australia and lower emissions,” Taylor said.

“These projects will help us reach our H2 under $2 technology goal sooner, with $2 per kilogram hydrogen making it a viable alternative to other sources of energy. This builds on our existing hydrogen industry that supports our hugely successful agriculture and mining sector.”

Labor’s opposition spokesperson for climate change, Mark Butler, said that it wasn’t a surprise that the ARENA hydrogen funding round had been oversubscribed and that it showed how much the Morrison government underestimated the potential of a renewable hydrogen industry in Australia.

“Angus Taylor has no credibility when it comes to clean technology,” Butler said. “The scheme was oversubscribed and underfunded. The Morrison Government never had any intention to properly invest in hydrogen development.”

“This is no surprise given the Government called a hydrogen industry “snake oil” and any jobs bonanza was still “decades away”. The only reason why a jobs bonanza would be decades away is because Angus Taylor refuses to properly invest in renewable energy.”

The hydrogen target, and the ARENA hydrogen funding round, were both announced in response to the National Hydrogen Strategy adopted last year, which had been developed by chief scientist Dr Alan Finkel.

The ARENA funding will be directed towards projects producing hydrogen using supplies of renewable energy, but both chief scientist Finkel, and federal energy minister Taylor, have expressed a desire to see support also being provided to grow hydrogen production from fossil fuels, such as gas and coal.

A condition of the ARENA funding is that projects much have an arrangement in place to use renewable electricity that runs an electrolyser, and must either have a direct arrangement for an onsite renewable energy supply, such as wind or solar, or have a power purchase arrangement in place with an external

ARENA CEO Darren Miller said that the renewable hydrogen projects that previously been supported by ARENA, including a number of feasibility studies, showed there was a strong opportunity for a viable hydrogen industry in Australia, but that some initial grant funding would be necessary to help the industry establish a foothold.

“Preliminary feasibility outcomes indicate there is a significant commercial gap and it is expected that grant and concessional funding will be required for hydrogen production facilities in the short to medium term,” Miller added.

ARENA said that it will now assess each of the expressions of interest, and will invite a shortlist of projects to proceed to a full funding application.

ARENA expects to make a final decision about which projects will receive funding before the end of the year.

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