Woodside quits US concentrated solar project, puts green hydrogen plans on hold

Australian petroleum giant Woodside has nixed plans to build a 5MW concentrated solar power (CSP) technology demonstration plant in California’s Mojave Desert, in collaboration with US outfit Heliogen.

Woodside’s collaboration with Heliogen was first touted in late 2021 as a plan to jointly market the AI-enabled CSP technology developed by California-based outfit, which is backed by billionaire Bill Gates.

These plans firmed up in early 2022 when Heliogen revealed it had been granted a Limited Notice To Proceed (LNTP) from Woodside’s wholly-owned US subsidiary to begin procurement of key equipment for a demonstration facility.

Heliogen’s modular, “nearly 24/7” power solution uses computer vision software to precisely align mirrors to reflect sunlight to a single target on the top of a solar tower, enabling enabling low-cost storage in the form of high-temperature thermal energy.

For Woodside, the deal was intended as a potential first step to introduce CSP technology into the oil and gas major’s operations, including for use in Australia for remote power generation and other industrial processes.

However, hidden quietly in the depths of its fourth quarter earnings announcement on Wednesday, Woodside announced that it had “concluded its collaboration with Heliogen” on the project, dubbed Project Capella.

According to Woodside, both parties had decided not to pursue the construction phase of the project, but would “continue to evaluate opportunities for further collaboration” in deploying CSP technology.

Similarly buried in the fourth quarter report – which sent investors scurrying on the back of weak revenue – was news of the “strategic decision” to delay taking a final investment decision on Woodside’s H20K project – a proposed liquid hydrogen project in Oklahoma.

Woodside billed its decision as part of a “disciplined approach” and said that it would instead prioritise a clean ammonia project in Texas.

The timing of Woodside’s decision to march back its “new energy” plans in the US coincides with the news that the newly inaugurated Donald Trump is making good on his election promises to pull America back out of the Paris climate treaty and wind back it’s support for renewables.

Woodside chief executive Meg O’Neill told journalists that the decision to delay investment in the H20K project was “not particularly” related to the new US administration.

However, O’Neill acknowledged that the company would need to assess the potential impact and likelihood of Trump’s plans to halt the distribution of funds from the Inflation Reduction Act, the country’s biggest clean energy spending bill, which included tax credits for hydrogen developers.

As part of a slew of executive orders signed in the opening hours of his presidency, Donald Trump instructed all government agencies to “pause the disbursement of funds appropriated through the Inflation Reduction Act”.

Woodside’s Australian new energy and carbon projects remain intact, including both the proposed Bonaparte carbon capture and storage (CCS) project in the Northern Territory and NeoSmelt, the joint venture with BHP, Rio Tinto, and BlueScope which intends to produce molten iron from Pilbara iron ore with reduced CO2 emissions.