Green hydrogen: Murchison project by Copenhagen Infrastructure Partners secures $814m in Federal backing

A proposed hydrogen export project in the Mid West has won $814 million of funding as the Federal Government showers WA in cash for green energy. Copenhagen Infrastructure Partners secured the grant for the Murchison Green Hydrogen near Kalbarri, a development likely to cost more than $10 billion. It’s the first project in the country to be selected through the Federal Hydrogen Headstart scheme, which will be dished out by the Australian Renewable Energy Agency. But despite a flurry of hydrogen projects proposed across Australia, there has so far been no commercial production of the green fuel. BP’s H2Kwinana plans were paused earlier this year to await a funding decision through the Headstart program while the Central Queensland Hydrogen Project was canned, too. The Murchison project also still needs environmental approval and CIP has flagged engineering and design work will start next year, leaving a final investment decision until the end of 2026. Construction would take five years across two stages. The government cash will only flow if production gets under way. CIP’s ambitious project would install almost 3000 megawatts of wind and solar farms, roughly similar to the energy used on WA’s main grid on an average spring day. That would drive 1.5GW of electrolysers producing hydrogen and the plant would pump out about 3600 tonnes of ammonia daily for export to industrial customers. The hope is that the green hydrogen will be used to slash emissions in the chemicals industry, steel making, and potentially for power generation. Yet the cost is so far much higher than existing fuel sources. Also on Thursday, four battery projects were picked for support through the Federal Capacity Investment Scheme. Frontier Energy — which last year failed in an attempt to install former premier Mark McGowan as chair — secured backing for a battery in Waroona. Yet WA’s alumina exports missed out on a recent $2 billion funding pot to cut emissions in aluminium manufacturing, because the cash was directed to smelters, which are on the east coast. The West Australian had questioned the Government on the slow rollout of Hydrogen Headstart in early February. But with money now on the table, Federal Energy Minister Chris Bowen said the country had a big pipeline of potential green hydrogen projects. “This support is about unlocking that private capital to help realise our potential, not only to become a renewable energy superpower but create a Future Made in Australia with real jobs right now,” he said. ARENA chief Darren Miller said hydrogen projects faced a major hurdle, because of a gap between production costs and the sale price. “ARENA’s support will help Australia’s first large-scale projects get to financial close and deliver on Australia’s promise as a provider of clean energy to decarbonise industry in Australia and globally,” Mr Miller said. “The Hydrogen Headstart program commits funding to bridge the current commercial gap in the form of a production credit, meaning funding is only provided once projects are constructed and operational.” Murchison Green Hydrogen chief Shohan Seneviratne said the company would create local jobs and share project benefits with regional communities.