First sod turned at Arena-backed renewable hydrogen project with green gas ambitions

First sod has been turned at what stands to be one of Australia’s first commercial-scale renewable hydrogen projects, more than three years after it won funding from the Australian Renewable Energy Agency.

The $65 million project, led by the Australian Gas Infrastructure Group, will install a 10 megawatt (MW) electrolyser that is expected to generate around 500 tonnes of renewable hydrogen a year at the site near Wodonga in Victoria.

The green fuel produced at Hydrogen Park Murray Valley is earmarked for the rather ambitious end-use of mains gas blending – AGIG says it will be blended into the local network at up to 10% for use by commercial and industrial gas users, and around 40,000 Albury-Wodonga homes and businesses.

As energy policy analyst Emma Chessell wrote here last year, the use of gas blended with green hydrogen is yet to be proven at scale anywhere in the world and in most places won’t be possible until 2030 or later.

Feasibility studies, including by Arena, have turned up concerns around the safety risks of blending even small amounts of hydrogen with gas for use in existing pipeline networks and accessories. The prohibitively high costs of upgrading networks and appliances to ensure they are safe using blended gas present another major hurdle.

Nevertheless, AGIG’s plan was in 2021 backed by a $32.1 million Arena grant, as one of three projects selected from more than 30 to share in federal funding to deliver Australia’s first commercial-scale green hydrogen production facilities. The project has also had support from the Clean Energy Finance Corporation and the Victorian government.

“Producing renewable hydrogen on this scale has never been done in Australia before, so this project is blazing a trail to scale up green hydrogen production, and that’s why we’re backing it,” federal energy minister Chris Bowen said on Friday.

“This is a project of significant scale, which brings us one step closer to establishing a renewable gas industry in Australia and responds to the needs of customers for more renewable generation to support Australia’s energy transition,” said acting AGIG chief Cathryn McArthur at the sod turning.

“Importantly this project is demonstrating the potential for industry to have greater flexibility in how they reduce their emissions, either by using blended gas delivered through the network or by purchasing renewable gas through a certificate scheme,” McArthur said.

Mars Petcare has signed up to do the latter, securing all Renewable Gas Guarantee of Origin certificates allocated to production at Hydrogen Park Murray Valley for its food manufacturing business under GreenPower’s Renewable Gas Certification scheme.

AGIG has also signed a Memorandum of Understanding with North-East Water to explore the potential to use recycled water from its wastewater treatment plant as well as supplying it with surplus oxygen from the hydrogen production process.

Watching from the sidelines, the Gas Appliance Manufacturers Association of Australia has heralded the commencement of construction of the Murray Valley facility as “an important first step in the transition to 100% renewable gas” – something the industry is banking on to stay alive.

This might be an uphill battle in Victoria, however, with the state Labor government’s Gas Substitution Roadmap well along the track of phasing gas out of homes and small businesses, including through a ban on network connections to new homes, a staged phase-out of gas appliances and subsidies for efficient electric appliances.