“Opportunity has been lost:” 12 GW wind and solar project canned in latest blow to green hydrogen

Another major green hydrogen project has been canned by its developers, this time a massive project in Western Australia that would have required up to 12 gigawatts (GW) of new wind and solar capacity.

The HyEnergy project in the Gascoyne region near Carnarvon, north of Perth, had been proposed by the listed company Province Resources, one of a number of huge multi-gigawatt scale proposals that targeted the growing opportunities in green hydrogen.

Province has been pushing its plans for many years, but announced this week that the project – still very much in the early planning stages – has been put on ice, blaming a lack of government support – and its refusal to provide “tenure” for the project on acceptable terms – for the decision.

“Due to the excessive amount of time taken by the state government to consider appropriate tenure for the HyEnergy project, the initial opportunity to advance the project has been lost,” Province said in a statement.

“These time delays have seen a significant reduction in investor interest in the sector and, ultimately, in many companies deferring their plans to develop their green energy projects.”

In reality, the HyEnergy project had been a bit of “hail Mary” for the company, given it has no operating assets and hoped to parlay the development of the project – which envisaged 6.8 GW of wind and 5.2 GW of solar, along with port, battery storage, electrolyser and other facilities – into a handsome payday.

The project had submitted a detailed EIS to the state environmental protection authority, and the company would have relied on other investors to provide the capital. But the reality is that many such projects, including those backed by companies with much deeper pockets, are also running into problems.

These include the gradual acceptance that green hydrogen will not be the answer to every decarbonisation problem, and certainly not in car fleets, electricity production and other key sectors. But it will still be important in certain hard to abate industries.

Woodside, which had been considering a project in Tasmania, withdrew that application earlier this month, citing a lack of new renewable generation capacity.

And the slower than expected build out of new wind and solar projects – complicated by rising civil construction costs and supply chain issues, and loud opposition from the federal Coalition and conservative media – has dampened investment.

That has meant that there has barely been enough new capacity committed or brought on line to replace the anticipated closures of ageing coal and gas fired generators, let alone the new capacity needed to feed the energy hungry hydrogen electrolysers.

The most ambitious green hydrogen developer, Andrew Forrest’s Fortescue Metals, has also deferred the timetable of its ambitious plans to produce 15 million tonnes of green hydrogen a year, although it still has faith in the technology and its future role in cutting emissions. It says the market is “stuck in limbo.”

Province is also not giving up on the technology , if it can stay afloat long enough.

“Province intends to maintain the HyEnergy project in a state of readiness for the next permissive (sic) global/local renewable hydrogen demand and development cycle,” it said.

In the meantime, it will turn its hand back to mineral exploration, in the hopes that its shares can be delisted. “We will see a solution for the company’s securities to be tradeable once again,” CEO David Frances said.