The Australian Renewable Energy Agency (ARENA) has announced the first recipient of its Hydrogen Headstart Program, awarding $814 million in funding to Copenhagen Infrastructure Partners’ (CIP) Murchison Green Hydrogen Project in Western Australia.
In a news release, ARENA CEO Darren Miller highlighted the challenges that hydrogen projects face due to the current gap between market prices and production costs.
“At the time it was announced, Hydrogen Headstart was the largest government investment in Australia’s developing renewable hydrogen industry,” Miller said.
“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.”
The Hydrogen Headstart Program provides funding in the form of a production credit, meaning financial support will be allocated once projects are constructed and operational.
“Enabling hydrogen projects through Hydrogen Headstart is essential to ensure our economic prosperity as the world transitions to cleaner forms of energy, especially in hard-to-abate sectors such as ammonia, iron, and alumina,” Miller said.
Miller also pointed to Murchison as a prime example of leveraging Australia’s solar and wind resources to produce cost-effective renewable hydrogen and ammonia at scale.
“CIP’s Murchison project is an example of how we can leverage Australia’s high-quality solar and wind resources to produce low-cost renewable hydrogen and ammonia at scale, increasing export opportunities and embedding Australia as a key enabler of global decarbonisation,” he said.
As a recipient of Hydrogen Headstart, the Murchison project must now meet various development conditions and achieve commercial operations before receiving funding. Payments under the program will be based on production volumes over a 10-year operating period.
To date, ARENA has allocated over $370 million to 65 renewable hydrogen projects, covering early-stage research to deployment initiatives.
Analysis by the Department of Climate Change, Energy, the Environment and Water (DCCEEW) suggests that Australia’s hydrogen industry could unlock over $50 billion in private sector investment and generate up to 16,000 jobs by 2030.
Murchison Green Hydrogen CEO Shohan Seneviratne welcomed the funding, emphasising CIP’s commitment to Australia’s green hydrogen ambitions.
“CIP is honoured to receive Hydrogen Headstart funding, which reinforces our shared vision with the Australian Government to establish a leading green hydrogen industry in Australia,” Seneviratne said. “We are committed to contributing to Australia’s green hydrogen ambitions by creating local jobs, supporting skills development, and sharing project benefits with local communities, including First Nations.”
Seneviratne also acknowledged government support in making the project a reality. “We appreciate the support from the Australian Government, Minister Bowen, and ARENA and commend their leadership, vision, and collaboration to make Murchison and the Australian hydrogen industry a reality.”
The Murchison Green Hydrogen Project, developed by CIP through its Energy Transition Fund I, will be located 15 km north of Kalbarri in Western Australia’s Mid West region.
The facility will include up to 1.5 GW of electrolysis and produce 3,600 tonnes of Haber-Bosch ammonia per day. Powered entirely off-grid, the project will utilise approximately 1.2 GW of solar photovoltaic and 1.7 GW of onshore wind generation, supported by a 600 MW / 1,200 MWh battery energy storage system and a new desalination facility for water supply.
Further details on Hydrogen Headstart Round 1 outcomes will be released in due course.
