The Morrison government has rejected plans to build a massive renewable hydrogen hub, including up to 26GW of wind and solar generation capacity in Western Australia’s Pilbara region, after declaring the project’s environmental impacts were “clearly unacceptable.”
Federal environment minister Sussan Ley said in the notice that the $50 billion plan to develop the so-called Asian Renewable Energy Hub roughly 220km east of Port Hedland would have “clearly unacceptable impacts” on matters protected by the Environmental Protection and Biodiversity Conservation Act.
The rejection of the Hub, which has been proposed for development by a consortium that includes Intercontinental Energy, Australia’s CWP Global, Pathway Investments and turbine manufacturer Vestas, comes despite it being given ‘major project status’ by the federal government in October of last year.
And it has major implications for the rest of Australia’s nascent renewable hydrogen industry which, as RenewEconomy recently reported, currently includes a pipeline 35 electrolyser projects with a collective potential renewable generation capacity of 38GW, according to new research by Rystad Energy.
An emailed statement from the minister’s office on Monday said the chief area of concern with the current AREH proposal was around matters of national environmental significance, including the ecological character of the Eighty-mile Beach Ramsar site and migratory species, including seven threatened species and an internationally significant population of waterbird
“The Minister found the marine component of the infrastructure corridor would disrupt tidal movements and processes and this would seriously impact the habitats and lifecycle of the native species dependent upon the wetland and accordingly the ecological character of the Eighty-mile Beach Ramsar site itself. Any future amended proposal would be a matter for the proponent,” a department spokesperson said.
The AREH initial proposal for a 9GW project – including roughly 7GW of wind, 2GW of solar and four subsea power cables – had already secured approval from the Western Australia government, following a favourable recommendation from the Environmental Protection Authority in May of 2020.
The consortium has since shifted the focus of the renewable export part of its plan from exporting electrons via undersea cables to exporting green ammonia – a green hydrogen derived fuel with potential to displace LNG and other fossil fuels in industrial applications.
This would be done via undersea pipelines extending 20km off the Western Australian coast and into Commonwealth controlled waters, where it would be loaded onto ships. It would also involve the construction of a seawater desalination plant, to create fresh water for electrolysis, as well as intake and discharge pipelines and, of course, renewable hydrogen electrolysers.
As CWP’s Andrew Dickson explained to RenewEconomy’s Energy Insiders podcast just last month, AREH had shifted its focus from exporting electrons to green hydrogen and then to green ammonia due to the reduced risk of storage and transport and the large existing market for the latter.
“LNG needs to be -160°C, roughly, to be liquid, but hydrogen needs to be -253°C, which is almost absolute zero. So that’s a massive challenge. And it takes a lot of energy,” Dickson said. “Whereas ammonia only needs to be -33°C. And all the technology risk with you know, storing hydrogen… is not an issue at all with ammonia, because it’s been produced and traded for almost 100 years. So yeah, large existing market, future enormous markets opening up for ammonia …. So yeah, that’s why we’ve pivoted to ammonia.”
Dickson also noted in his interview with Giles Parkinson and David Leitch that the Asian Renewable Energy Hub – being such an expansive project – would not be developed all at once, but in phases over the course of around a decade, with the aim of kicking off construction of the solar and wind farms in around 2025/26.
In a statement on Monday, AREH project developers did not shed any light on the reasoning behind the minister’s decision, confirming only that they had received notice that an environmental referral for the project would not proceed in its current form.
“We are now working to understand the Minister’s concerns, and will engage further with the Minister and her Department as we continue to work on the detailed design and engineering aspects of the project,” the statement said.
“The AREH project represents a significant economic and clean energy opportunity for Australia,” it continued. “The project developers intend to utilise the Pilbara’s world-class solar and wind power to produce hydrogen and derivatives for export to major Asian markets already committed to quickly decarbonise their economies, and to offer options for greening mining activities and adding value to mineral resources produced in the Pilbara.”
Tim Buckley from IEEFA said that at face value it looked to be yet another example of the Morrison government doing everything in its power to hold back the future.
“Despite all their talk of ‘technology not taxes’, what the Federal LNP is intent on doing is undermining investor confidence and promoting fossil fuel solutions, and slowing the development of zero emissions industries of the future,” Buckley said in comments to RenewEconomy.
“CWP Renewables’ Asian Renewable Energy Hub is the largest single private project proposal under development in Australia right now, it will generation thousands of new jobs, tens of billions of new foreign investment and billions of dollars annually of new export opportunities, at a critical time when Australia faces the inevitable growing headwind of action on climate change by our major global trading partners.
“All the federal government has to do is get out of the way, but they cant even do that. Anything to prolong the last dollar of high emissions fossil fuel exports for their mates and sponsors at APPEA.”
Peak renewables body Clean Energy Council said in its own statement on Monday that it was seeking “urgent clarification” from Ley about the decision, describing the Asian Renewable Energy Hub was a “transformative economic opportunity” for Australia.
“The Clean Energy Council is seeking urgent clarification from the federal minister for the environment to address the perception that this decision is inconsistent with well-established processes or with the treatment of non-renewable projects,” the CEC said.
“We expect that the Commonwealth will work in partnership with the Asian Renewable Energy Hub to provide the necessary guidance to appropriately assess and address any environmental impacts under the Environment Protection and Biodiversity Conservation Act.”
The rejection of the Hub coincides with the federal government’s release, last week, of 21 offshore blocks across the country for exploratory gas drilling, including in Victoria’s Gippsland and Otway basins (one site is 6km from the Twelve Apostles Marine National Park), plus basins in Western Australia and Tasmania.
It also follows last week’s singling out, by Ley, of the Australian solar industry, which the minister publicly “put on notice” to develop a national strategy for panel recycling during her National Press Club on Wednesday.
“The federal government is all too willing to fast-track coal and gas projects, including throwing billions of taxpayer dollars at subsidies for exploration, infrastructure for new gas basins and unproven carbon capture and storage,” said the director of climate and environment at the Australasian Centre for Corporate Responsibility, Dan Gocher.
“If the government is to be taken seriously on developing a hydrogen economy, companies prioritising genuinely zero emissions projects should be assisted to reach a final investment decision,” he said.
“While the AREH proponent should address concerns raised about Ramsar wetlands and threatened species, the Minister appears to have reached this decision with little consultation with the consortium.”