Fortescue in box seat to get US funding for green hydrogen project in old coal mine

Australia’s Fortescue Metals appears to be in the box seat for a share of funding from the US government after the Biden administration announced seven regional hydrogen hubs that could share in $US7 billion ($A11 billion) of of funding.

One of the hubs, the Pacific Northwest Hydrogen Hub (PNHH), includes Fortescue’s Centralia project, a plan to set up a green hydrogen facility in a disused coal mine adjacent to the last coal generator in Washington state.

Fortescue says the project – being led by its north America chief Andy Vesey, the former head of AGL in Australia, will produce green hydrogen for use  in the Pacific Northwest in heavy-duty transportation, grid reliability, maritime, industrial processes, and other hard-to-abate sectors.

It is one of 15 companies proposing hydrogen projects within the hub.

The Biden Administration expects the seven hubs to catalyse more than US$40 billion in private investment, with two thirds of the projects focused on hydrogen electrolysers. It says that produce around 3 million metric tonnes of green hydrogen a year, or about one third of the 2030 US clean hydrogen production goal. 

Fortescue said in a statement last week that it has also been selected to begin negotiations with the government, as part of the Pacific Northwest Hydrogen Hub development. The company could receive $US150 million ($240 million) in subsidies, according to the AFR.  RenewEconomy has sought confirmation with Fortescue.

The Centralia project is in the design stage, and if it receives a final investment decision construction will start in 2026, with an estimated start date of 2028.

“There is no place better in the world to be investing in renewable and green energy projects right now than the United States,” Fortescue executive chairman Dr Andrew Forrest said in a statement.  

“Federal funding like this, alongside other incentives in the Inflation Reduction Act, go a long way to helping reduce risk and accelerate the wide-spread production of green hydrogen.

“In turn this will catalyse substantial private sector investment, creating new good paying jobs and economic prosperity for Americans, particularly those in economically vulnerable communities in the Pacific Northwest.”

Fortescue digs deep in Australia with green hydrogen deals

Forrest has been vocal about the Australian government needing to match subsidies offered in the US and Europe for green hydrogen projects, or miss out on businesses like Fortescue investing in the country. 

Last week in Australia, the federal government kicked off the first tender for its $2 billion green hydrogen funding package.

Furthermore, last week Fortescue signed three major hydrogen deals in Australia, returning to US company Plug Power for the 550 megawatts (MW) of hydrogen electrolysers it will need for its Gibson Island green hydrogen and ammonia project in Queensland, after the two walked away from each other earlier this year. 

It also revealed it was the lead investor in a $150 million capital raising for electrolyser maker, EH2 and had signed up for a one gigawatt supply deal, and signed a long term power purchase deal for part of the output for the 2GW Bulli Creek solar and battery project in Queensland, again to supply power to the Gibson Island project.