Key Takeaways
- The South Australian government refutes Murdoch media claims that a renewable hydrogen project was recently scrapped, stating it was shelved years ago.
- Spokesperson for the South Australian government says the Port Pirie project never moved past the first funded study.
- Green hydrogen initiatives see varied progress; some are operational, others stalled due to economic and regulatory challenges.
A Murdoch media report that another major renewable hydrogen venture has been scrapped, delivering a “fresh blow” to the industry, has been refuted by the South Australian government, which says the project in question was actually shelved several years ago.
Global metals giant Trafigura Group and its majority owned Nyrstar in 2021 unveiled plans for a major renewable hydrogen facility at the Port Pirie smelter in South Australia to target both domestic and export markets.
The first stage of the proposed project was to produce around 20 tonnes a day for export in the form of green ammonia, with an 85MW electrolyser. A full scale plant would produce 100 tonnes per day of green hydrogen – for domestic and export markets – from a 440MW electrolyser facility.
It cancelled those plans after finishing a feasibility study in 2023, Trafigura said in an emailed statement to Renew Economy.
“In 2023, Trafigura completed a $5 million feasibility study into a Green Hydrogen Project at Port Pirie. Following completion of the study, the decision was taken not to proceed further,” the statement says.
The Australian newspaper reported on Tuesday that the $750 million concept had been scrapped, describing it as “a fresh setback for the fledgling industry just days after Anthony Albanese pledged the clean-energy source would help underpin its Future Made in Australia plan.”
The report follows a relatively rare good news week for green hydrogen in Australia last week, with the Murchison Green Hydrogen project, a development owned by Danish giant Copenhagen Infrastructure Partners, named as the first winner of the federal government’s Hydrogen Headstart program.
According to the Australian, the Port Pirie project’s failure further punches a hole in Albanese’s plans to develop a major renewable hydrogen export industry by 2030 and meet net-zero goals.
The newspaper also notes the federal Coalition’s vow to repeal Labor’s hydrogen incentives should it win government, with Opposition Leader Peter Dutton saying there is no business case for green hydrogen.
Last week, The Australian reported that the ageing Yallourn coal fired power station in Victoria would be kept open beyond its 2028 closure date after talks between its owner EnergyAustralia, the state government and the market operator. All three institutions denied emphatically that any such talks had taken place.
A spokesperson for the South Australian government says the Port Pirie project never moved past the first funded study, which had its start under the former Liberal state government and Coalition federal government.
Trafigura received $2.5 million in matched funding from the then SA government for a front end engineering and design (FEED) study, also in 2021.
A final investment decision was due in 2022 and work to start by 2023. But the project was consigned to the ‘archived’ file on CSIRO’s HyResource website in September last year.
“The Trafigura green hydrogen project was announced by the Marshall Liberal government in 2021,” a South Australia government spokesperson told Renew Economy on Tuesday.
“We are advised work has not progressed on this plan for some years, and it never proceeded beyond feasibility.
“[Port Pirie] has never been part of the Malinauskas Labor government’s hydrogen plans.
“It is a reminder of when the Liberal Opposition used to claim SA was ‘leading the way’ on hydrogen, before they instead decided to oppose hydrogen projects for purely political reasons.”
Consolidation in SA green hydrogen
South Australia has seven green hydrogen projects under development and one operational plant in Australian Gas Networks’ (AGN) Hydrogen Park South Australia which opened in 2021 with a plan to blend the gas into residential and business pipes as well as supply buses.
The companies behind these projects are a mixed bag of energy companies and industry groups, including Japan’s Marubeni Corporation and Korea Hydro and Nuclear Power Company, building materials company Hallet Group and solar thermal developer Vast.
But as many South Australian green hydrogen projects have been shelved as well.
The seven archived projects included the Whyalla ‘Hydrogen Jobs Plan’ which devoted $593 million to building a new hydrogen generation and storage plant – money which has since been re-allocated to the Whyalla steel works bailout.
Others include the AGL Torrens Island Green Hydrogen Hub which was archived in October last year, citing regulatory challenges and difficulties in making the gas at a price customers would pay for it.
In reality, the Australian green hydrogen hype cycle began years before the federal Future Made in Australia and Hydrogen Headstart subsidies kicked in.
A production incentive has program allocated $6.7 billion to get green hydrogen prices down to $2/kilogram for gas produced in 2027-28 – but the program was unveiled last year and only passed the Senate in February.
It means that feasibility studies, such as that for AGL’s Torrens Island concept, weren’t able to benefit from the price-cutting credits.
But companies with current projects underway, such as Intercontinental Energy which owns stakes in two massive Western Australia projects, say the new production credit will be the gamechanger Australia needs to get green hydrogen projects off the ground.
