The green hydrogen project led by former Woodside CEO Peter Coleman has welcomed South Korean firm Samsung C&T as a significant equity partner. This will be both companies’ first attempt to produce carbon-free fuel on Australian soil.
The “MEG HP1” project, which would electrolyze water into “green hydrogen” close to Northam’s Western Australian wheat belt town, is 100% owned by Mr. Coleman’s Infinite Green Energy.
However, Infinite Green’s CEO, Stephen Gauld, stated that the company was in the process of enlisting additional partners for the Northam project, lowering its ownership position down to more or less 40%.
The first of those partners will be Samsung. It is preparing to pay an undisclosed amount for a stake of an undisclosed size.
The partners intend to make a final investment decision (FID) before the end of 2023, and it is anticipated that the first phase of the Northam project will cost $110 million to construct.
This FID adds to a significant year for hydrogen; Fortescue will finish its Gladstone hydrogen electrolyzer factory by the end of the year and will also take five FIDs before Christmas.
Infinite Green’s Northam project is expected to be smaller than the green hydrogen projects being proposed for Australia’s north-west because it would be concentrated on domestic hydrogen customers rather than exports.
About 1460 tonnes of production are anticipated to be produced annually, and these volumes are anticipated to be sold to fleet owners of heavy vehicles like garbage trucks.
The Northam project is intended to be a teaching tool that will better prepare Infinite Green to develop more substantial hydrogen projects, such as its flagship Arrowsmith project.
The European Union (EU) established a clear definition for how hydrogen should be manufactured to be termed “green,” which gave the green hydrogen business a boost on Tuesday.
The requirement that green hydrogen projects be powered by “additional” or brand-new renewable energy sources after 2028 is a crucial component of the new criteria.
The goal of the rule is to prevent the expansion of the green hydrogen industry from sapping the supply of power produced by existing renewable energy sources that would otherwise be put into the electrical grid.
The definition is a crucial step in achieving price premiums for “green hydrogen” over hydrogen produced from conventional fuels.
As Infinite Green purchased Carnegie Clean Energy’s Northam Solar Farm, Mr. Gauld stated that the company fully supported the new hydrogen regulations in Europe and would make sure that its Arrowsmith project was powered by new renewables.
According to him, “our flagship Arrowsmith project is a perfect example, receiving almost 90% of its annual power from large onsite renewables.
“Using large-scale generating certificate [LGC] offsets to green grid energy has a hefty price tag. Without substantial government subsidies, a project that uses just grid power and greens it through LGCs will not be viable.