Wollongong misses out on slice of $2 billion green hydrogen funding

On December 21, the Australian Renewable Energy Agency announced the shortlist of six projects for the Commonwealth's Hydrogen Headstart program.

These included projects in Queensland, Tasmania, Western Australia and two projects in the Hunter.

The final successful applicants will be announced in late 2024.

A spokesperson for ARENA said the location of the 60 applicants could not be disclosed due to the competitive nature of the process.

"The Hydrogen Headstart Program received more than 60 expressions of interest applications. This indicates a strong pipeline of hydrogen projects under development in Australia across a range of end uses and locations."

When announcing the program in his budget speech this year, Treasurer Jim Chalmers said the initiative would be directly relevant to the Illawarra.

"Hydrogen power means Wollongong, Gladstone and Whyalla can make and export everything from renewable energy to green steel," Dr Chalmers said.

The terms of the funding, which would provide a production credit over 10 years to reduce the price gap between renewable hydrogen and other energy sources, was directed towards projects that include the deployment of large-scale electrolysers of at least 50 megawatts in size.

Most of the shortlisted projects intend to produce green ammonia, which is used to make fertiliser and explosives, with some intending to use hydrogen for green fuels for aviation and heavy industry. None of the projects explicitly target green iron or steel.

ARENA CEO Darren Miller said the selected projects would contribute to Australia's green goals as well as provide the spark for a green hydrogen export industry.

"Hydrogen Headstart is a crucial step towards keeping Australia on the path to become a global hydrogen leader, creating new export opportunities, while helping to decarbonise our economy," he said.

The ARENA spokesperson said the agency had funded a number of hydrogen projects in the Illawarra, including at the Port Kembla steelworks and green hydrogen start up Hysata.

The largest currently operating electrolyser in Australia is 1.25MW, located in South Australia.

In the Illawarra, industrial conglomerate BOC plans to build a 10 MW electrolyser at its site in Cringila to produce hydrogen for heavy vehicles, and received $28.5 million from the NSW government for the initiative earlier in 2023.

Garbage trucks and buses powered by blue hydrogen - produced from natural gas at CoreGas's Port Kembla plant - are making the rounds of the Illawarra, while Hysata moved into its manufacturing site in Port Kembla earlier this year.

However, establishing a large-scale hydrogen production facility in the Illawarra has had its stops and starts.

BlueScope and Shell announced plans for hydrogen production to support green steel, however both parties later went their separate ways.

In addition, Squadron Energy, the power generation arm of Andrew 'Twiggy' Forrest's business empire, quietly shelved plans for a hydrogen power plant in August.

Despite this, the Illawarra retains many of the ingredients for a hydrogen economy, with a hydrogen-ready power plant nearing completion at Tallawarra, hydrogen vehicles in commercial operation, and a future major industrial user in the case of BlueScope's Port Kembla steelworks which is exploring hydrogen in place of coal as the most likely pathway to producing green steel.

Whether government investment is the final piece of the puzzle remains to be seen, but as Wollongong state MP Paul Scully often reminds industry gatherings the region may have to create its own luck as it has done in the past.

"These opportunities are not going to be presented to us, they're not going to be served up on a silver platter," Mr Scully told an Illawarra i3Net meeting in December, "we're going to have to fight for it as a region."