Contact Energy and Meridian Energy aim to build the world’s largest green hydrogen plant in Southland, New Zealand – and McKinsey & Co estimate it may generate hundreds of millions of dollars in export revenue.
Contact Energy and Meridian commissioned McKinsey & Co to conduct an investigation into the use of renewable energy in Southland to scale up the production of green hydrogen.
McKinsey & Company estimates that global hydrogen demand might more than sevenfold to 553 million tonnes by 2050, with Southland poised to capitalize on this growing opportunity.
The economic benefits described in the paper for a 600MW green hydrogen export facility include a one-time boost to New Zealand’s GDP of up to $800 million and the creation of thousands of construction jobs, as well as continuous benefits of up to $450 million and hundreds of extra jobs.
Governments and the corporate sector worldwide are believed to have already invested more than NZ$200 billion ($139 billion) to advancing hydrogen economies.
Neal Barclay, Meridian Energy’s Chief Executive, said, “Developing a hydrogen economy based on large-scale production in Southland could deliver significant decarbonisation, economic and energy independence benefits from New Zealand. Our renewable energy gives us a valuable head start and competitive edge as markets for green hydrogen develop. Early, large-scale production will allow us to build a domestic hydrogen supply chain and kickstart demand around the country.”
Mike Fuge, Contact Energy’s CEO said: “This can be achieved by reducing hydrogen production when the country’s hydro lakes are running low, allowing electricity to flow back into the national grid to support local homes and businesses, In this mode of operation, green hydrogen could solve up to 40% of New Zealand’s dry year problem. This flexibility would see hydro generation replace coal and gas-fired generation and reduce carbon emissions. Given the low lake levels over the past six months, if this plant had been available this year it could have been used to avoid up to one million tonnes of carbon emissions.”