The NSW Government has signed a $45 million funding agreement to build the Hunter Valley Hydrogen Hub on Kooragang Island, to assist emissions-intensive industries to reduce their reliance on fossil fuels.
The project, led by Origin Future Fuels (Origin) with funding from the Commonwealth and NSW Governments, will be a regional cornerstone of the hydrogen industry, accelerating NSW’s shift towards clean technologies and net zero.
The Hunter Valley Hydrogen Hub will produce green hydrogen through electrolysis (splitting water), which can be used to store energy and as a feedstock in industrial processes. The hub will initially deliver approximately 55 megawatts of electrolyser capacity by 2026, with an aim to scale up to over 1 gigawatt of capacity over the next decade.
The hydrogen produced by the hub will be used by industry, with the majority going to Orica’s nearby ammonia manufacturing facility to help decarbonise its operations. Hydrogen will also be made available to transport customers through onsite and satellite refuelling stations.
The project will deliver up to 150 direct (construction and ongoing) jobs, and up to 65 indirect construction jobs in the Hunter.
Orica’s co-located Tertiary Abatement Plant at Kooragang Island has this month reached a milestone, abating the equivalent of 250,000 tonnes of carbon dioxide emissions. This is equal to removing 150,000 cars from NSW roads.
The plant, which is funded by the NSW Government and has financing from the Commonwealth’s Clean Energy Finance Corporation, will abate the equivalent of more than 500,000 tonnes of carbon dioxide per year, reducing emissions from Orica’s nitric acid manufacturing plant by 48%.
The NSW Government is committed to growing the hydrogen sector as a future industry for NSW. The state has previously approved $28.5 million for the Illawarra Hydrogen Technology Hub and $35.8 million for the Good Earth Green Hydrogen and Ammonia Project in Moree.
Energy Minister Penny Sharpe said:
“A green hydrogen industry in NSW has the potential to support 10,000 new jobs and add $6.4 billion in gross state product.
“The Hunter area is one of NSW’s leading industrial regions that contributes $50 billion to NSW’s gross state product and has a critical role to play in our state’s clean energy transition.
“Projects like the Hunter Valley Hydrogen are vital to decarbonising the industrial sector as we work towards a net-zero future.
“The Minns Labor Government is committed to investing in clean technologies which will create new jobs, business opportunities and allow NSW to become a clean energy superpower.”
Background information:
- Hydrogen molecules can be used to store energy and as an industrial feedstock. Hydrogen is derived primarily by splitting water (electrolysis) or by reacting fossil fuels with steam through a process called steam methane reformation.
- A small fossil-fuel based hydrogen industry already exists in NSW, however it releases emissions. This hydrogen is used as an input into a number of industries such as ammonia production, which is used to produce fertiliser and explosives.
- To encourage industrial decarbonisation, the NSW Government is supporting the establishment of a hydrogen industry that is produced using renewable energy.
- This low-emissions hydrogen represents an opportunity to decarbonise existing industries that use hydrogen as a feedstock and as a new renewable fuel in other sectors.
- This will enable decarbonisation in hard-to-abate sectors where electrification is not an option. These sectors include steel making, ammonia production, industrial high temperature heat applications and heavy vehicle and shipping transport sectors. These hard-to-abate sectors account for around 18% of NSW’s annual emissions.
- Hydrogen is a critical decarbonisation opportunity to support NSW to reach net-zero by 2050.