Australian firms eye $5b Southland hydrogen plant

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Woodside Energy and Fortescue Future Industries are competitors in the last stage of discussions to become the principal developer of the world’s largest green hydrogen facility, which will be constructed in Southland.

Contact and Meridian Energy are expected to pick the principal developer for the Southern Green Hydrogen project following the submission of more specific proposals in late August.

Depending on its size, a hydrogen plant might provide an alternate use for all the electricity currently needed to operate the Tiwai Point aluminum smelter, should it close in 2024.

A spokeswoman for Meridian Energy stated that the proposal was not dependant on the shutting of the smelter.

Professor Sally Brooker, co-leader of the German-New Zealand Green Hydrogen partnership, said that the announcement of the project’s counterparties was particularly exciting because it demonstrated the project’s commercial viability.

“That’s arguably the best news out of all of this,” Brooker said. “At no point are commercial entities saying ‘oh no, we don’t want any of that.'”

This indicates to me that it is not only climate change campaigners and sustainability supporters who are pushing this, but that it is also the commercially prudent path forward.

A green hydrogen plant in Southland would use renewable electricity, largely from the Manapouri hydro system of Meridian, to split water into hydrogen and oxygen, with the hydrogen being used as a fuel.

Investment would be one of the greatest obstacles for the project, but worldwide interest was high, Brooker added.

“It will be an economically transformational undertaking. But it must be done in a sustainable manner.”

She stated that, due to the size of the plant, any potential approvals would be time-consuming.

Brooker believed that this project’s tight alignment with iwi and Murihiku Regeneration was a tremendous advantage.

Terry Nicholas, a representative of Hokonui and the leader of Ngi Tahu’s green energy programme, stated that green hydrogen was crucial to the future of Southland-Murihiku and Ngi Tahu.

Southland will be New Zealand’s renewable energy powerhouse, I have no question about it.

Nicholas has contributed significantly to the project. Nicholas was made to believe the cost of the plant and surrounding infrastructure would be $5 billion.

Four Southland locations had been discovered, none of which were the Tiwai smelter, as Nicholas was unable to reveal.

He stated that the initiative might generate 5,000 direct and indirect jobs.

Neal Barclay, the chief executive officer of Meridian Energy, stated that both counterparties were in conversations with consumers over the purchase of the high volumes that the Southland project will produce.

Mike Fuge, the chief executive officer of Contact Energy, stated that Woodside Energy and Fortescue Future Industries proved the technical proficiency required to construct the project in time to achieve “first-mover advantage in emerging global markets.”

“The remaining two counterparts has the competence, expertise, and motivation to expedite this project. “Importantly, they’ve both laid out viable routes for bringing this project to commercial operation,” added Fuge. Iwi interests will collaborate with Southern Green Hydrogen and the remaining potential developers to secure the best possible conclusion, according to a statement from Southern Green Hydrogen.

Midway through 2021, Contact Energy and Meridian Energy announced they were seeking partners to develop the world’s largest green hydrogen plant in Southland, after a feasibility report revealed a green hydrogen plant had the potential to generate hundreds of millions of dollars in export revenue and aid in the decarbonization of domestic and international economies.

According to the analysis, Southland’s availability to renewable energy gives it the opportunity to be at the forefront of the expanding green hydrogen market.

However, earlier this year, Simon Upton of the Parliamentary Commission for the Environment warned that a huge green hydrogen production could cause more problems and emissions than it solves.

Hydrogen, if produced from renewable power, is a low-carbon energy source that could one day be used for metal production, shipping, and aviation. However, this process is inefficient: up to 30% of energy is lost in the production of green hydrogen.

Upton said in a letter to ministers that renewable electricity might be utilized more effectively to electrify vehicles and boilers during the next decade.

The Tiwai smelter uses approximately 13 percent of the nation’s annual electricity supply.

Nedim Husomanovic

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