Western Australia's Murchison Green Hydrogen project secures funding to proceed

The 1,500-MW Murchison Green Hydrogen Project being developed by Danish renewable firm Copenhagen Infrastructure Partners has been awarded up to A$814 million ($515.03 million) in production incentives as Western Australia advances its renewable energy transformation plans.

The project, located 20 km north of Kalbarri, will use solar and wind-powered hydrogen and convert it to "green ammonia" for export and is the country's first Hydrogen Headstart project, according to a statement on the Department of Climate Change, Energy, the Environment and Water website March 20.

Delivered by the Australian Renewable Energy Agency, the funding will be paid at production milestones over 10 years to help accelerate development.

Stage one is expected to produce 900,000 mt of green ammonia each year, translating to almost half of Australia's current ammonia production from fossil fuels, it said.

The statement did not specify when the production will begin.

Green ammonia can be used to make fertilizer and other chemicals, as an energy carrier and as a bunker fuel amid stricter environmental rules in international shipping.

"Australia has one of the largest renewable hydrogen project pipelines in the world," Minister for Climate Change and Energy Chris Bowen said.

"This support is about unlocking that private capital to help realize our potential, not only to become a renewable energy superpower but create a Future Made in Australia with real jobs right now," Bowen added.

The Hydrogen Headstart program, announced in May 2023, aims to enable large-scale renewable hydrogen projects such as Murchison to get going by bridging the commercial gap between the cost of producing renewable hydrogen and the market price.

In December 2023, Australia shortlisted six renewable hydrogen projects for Hydrogen Headstart including projects managed by BP, Kepco, Stanwell, and Murchison Hydrogen Renewables, in addition to Origin Energy, Platts, part of S&P Global Commodity Insights, reported earlier.

The Hydrogen Headstart initiative complements the new Hydrogen Production Tax Incentive, which was recently passed in the Australian parliament.

Together, this production support could provide about A$8 billion over 10 years to assist Australia's emerging renewable hydrogen industry.

In addition, through the First Nations Renewable Hydrogen Engagement Fund, the government is also working with First Nations representatives to help communities explore economic opportunities from renewable hydrogen.

Platts assessed Western Australia Hydrogen Alkaline Electrolysis (including capex) at $3.65/kg on March 18, up 24.98% day over day.

It assessed Japan hydrogen produced via alkaline electrolysis (including capex) at $6.64/kg on March 19, up 8.55% day over day.