Japan giant buys into Australian green hydrogen pioneer and big South Australia project

Australia’s renewable hydrogen ambitions has gained some financial and industrial muscle with news that Japanese giant Mitsubishi Heavy Industries has bought a stake in local green hydrogen and ammonia project developer, H2U.

Mitsubishi said on Thursday it had agreed to make a capital investment in H2U Investments, the holding entity of H2U Group, which includes the Hydrogen Utility, or H2U, whose current projects include the South Australia government-backed $250 million Eyre Peninsula Gateway Hydrogen Project.

As part of the deal, MHI has also agreed to support H2U’s projects and business development initiatives, starting with the Front-End Engineering and Design (FEED) study for the Eyre Peninsula Gateway, for which it will also supply key plant equipment, including hydrogen gas turbines and hydrogen compressors.

This is a big win for the South Australian project, which proposes to build a 75MW electrolyser plant, which will supply renewable hydrogen for the production of an estimated 40,000 tonnes ammonia annually, and will target export markets.

The project – originally slated for construction near Port Lincoln – has been supported by a $4.7 million grant and a $7.5 million loan from the South Australian government, under its Renewable Technology Fund.

The South Australian Liberal government has made a big show of its plans for renewable hydrogen, naming three hubs it expects will result in an “epic” growth in wind and solar capacity in the state, and enable it to become a major energy exporter to the rest of the country and the world.

According to MHI, the Eyre Peninsula Gateway project is on track to commence commercial production of green hydrogen and ammonia towards the end of 2022, which could make it one of the first big new projects to come online.

“South Australia has a rich endowment of wind and solar resources, and is now the leading economy, globally, in the integration of variable renewable energy into its electricity generation mix,” the statement says.

“By leveraging abundant renewable energy resources in the region to produce green hydrogen and green ammonia as part of the state’s carbon-free energy solutions, the initiatives will help decarbonise mineral processing and agricultural industries in the region, and lay the foundation to export locally produced green hydrogen and green ammonia to Japan and other destinations.”

As part of the Eyre Peninsula project, MHI said it and H2U would also investigate “synergies” with nearby industrial operations, including shared infrastructure for the further reduction of total carbon emissions in the region.

“By investing in H2U Investments, and supporting a world-leading green hydrogen and green ammonia project in South Australia, MHI will make a further contribution to Australia’s industrial development utilising carbon-free energy,” the statement says.

Renewable hydrogen has been very big on the energy agenda in Australia in the past couple of years, and the collective ambition for renewable hydrogen mega-projects was this week credited for lifting Australia to third spot on EYs biannual Renewable Energy Countries Attractiveness Index.

Just one day after the EY report was released, Australian energy utility Origin Energy flagged its own plans for a huge 300MW electrolyser in Townsville and production of more than 36,000 tonnes of green hydrogen a year for the export markets.

This project, too, will have a Japanese connection – and Japan, too, got an honourable mention from EY on green hydrogen – with Kawasaki Heavy Industries to work alongside Origin on the project, having already completed a feasibility study. It expects engineering and design work to begin this financial year.

And then there’s the project that rated a mention in the EY report – the massive Asian Renewable Energy Hub, in Western Australia, which proposes to build up to 15,000MW of new wind and solar power in the state’s Pilbara region in its first stage, and has expanded its long term plans to an extraordinary 26,000MW.

But green hydrogen projects are now a feature in all states, including the ambitious 235GW plan outlined by billionaire miner Andrew Forrest, green hydrogen plans unveiled by BP and Siemens and others, and in Tasmania, where the government has set a target of 200 per cent renewable by 2040 in recognition of their green energy export opportunity.