Woodside has pulled its Tasmania hydrogen project from the federal environment approval process, a year after big hydrogen export dreams for the Bell Bay site began to stall.
Two reasons caused Woodside to drop the H2Tas project, a spokesperson told Renew Economy.
The company was told the state EPA would need a revised plan to satisfy extra environmental factors such as marine issues, and the company’s view on Tasmania as a hydrogen hub has changed.
“In Woodside’s view, electrolysis-based hydrogen production in Tasmania is currently challenging, driven by the lack of availability of new renewable energy generation,” the spokesperson said.
“If appropriate in the future, Woodside may propose to submit a new Notice of Intent for the revised H2TAS scope.”
The H2Tas project was for a hydrogen generating electrolyser of up to 300 megawatts (MW) and could produce up to 107 tonnes per day of hydrogen,
The resulting ammonia, about 600 tonnes per day, was to be exported.
The project has been waiting in the RPBC queue for two years.
Big plans foiled
The original plan was to build in phases a whopping 1.7 gigawatt (GW) hydrogen export facility in the industrial Austrak Business Park, where Woodside locked in a long term lease in 2021.
Feasibility studies with partners Marubeni Corporation and IHI Corporation suggested it was technically and commercially viable to ship the hydro- and wind-power sourced final product, ammonia, to Japan from Tasmania.
The final investment decision was supposed to happen in 2023.
But bigger tax incentives in other countries and a change in state government strategy shattered export dreams last year, when the Tasmania government said hydrogen grants would be only for companies looking to make hydrogen purely for the domestic market.
The Liberal government was concerned that Tasmanians would end up paying higher power bills because of the huge electricity consumption needs of the Bell Bay hydrogen proposals.
That move helped to ground major projects from Woodside, Fortescue and Origin Energy, all of which were planning Bell Bay operations.
It was supposed to be the location of Fortescue’s first hydrogen plant, but the company couldn’t lock in an agreement on low power price with the government.
And Origin hit pause on its 500 MW project in 2023.
The Able Energy/Iberdrola project in the area, a 260 MW electrolyser able to make about 105 tonnes per day, is the only major project that hasn’t been archived by its proponent.
The Bell Bay Hydrogen Hub was supposed to be running by 2028, and has $70 million and $230 million in grants from the federal and state governments respectively to revive it.
Hydrogen hopefuls had hoped the Marinus Link transmission line between Tasmania and Victoria might be the nudge needed to get the Bell Bay projects moving again. Renewables project developers are also likely to be crossing their fingers that something changes the economics back in favour of Tasmanian hydrogen as well, such as the proponents behind the nearby 224 MW Bell Bay wind farm.
It’s better in America
In its half year report, Woodside said it has also dropped a hydrogen project in New Zealand, and has turned its H2 Perth into a liquid hydrogen-only refuelling station, rather than offering ammonia as well.
But while Woodside is dropping ammonia as an option in Australia, it is more bullish about the product in the US where federal and state governments have provided enormous tax and cash incentives to set up operations.
The company is hoping to buy ammonia maker OCI Clean Ammonia Holding B.V. as a ready-made lower carbon ammonia producer.
OCI’s infrastructure is under construction and will start production in 2025, and lower carbon ammonia in 2026 once its carbon capture and storage technology is finished.
- * Edited to included comments from Woodside.
