Central Queensland Hydrogen Project

September 26th, 2022

Central Queensland Hydrogen Project (CQ-H2)

The project proponents are undertaking studies into the development of a large-scale renewable hydrogen production facility near Gladstone, Queensland, and a liquefaction plant at the Port of Gladstone, with the main focus of exporting liquid hydrogen to the Japanese market.

Main proponents:

Stanwell Corporation Limited, Iwatani Corporation, Kawasaki Heavy Industries, Marubeni Corporation, Kansai Electric Power Company, APA Group

Main end-use classification:

Focus on liquid hydrogen export potential, domestic applications also being evaluated

Status:

Under development – a feasibility study was completed in June 2022; a bridging phase is currently underway; FEED studies are expected to commence in early 2023

Estimated cost:

(Feasibility study)
AUD$10.4 million

Other involvement:

 

Production details:

The project aims to produce approximately 100 tonnes of renewable hydrogen per day by 2026, scaling up to 800 tonnes per day in 2031 (using up to three gigawatts of electrolyser capacity)

Location:

Queensland, Australia

Announced funding:

(Feasibility study)
AUD$2.17 million – Australian Renewable Energy Agency (ARENA)

(Capital works-hub development)
Up to AUD$69.2 million to support establishment of a Central Queensland Hydrogen Hub – Australian Government Clean Hydrogen Industrial Hubs Program – Hub Implementation funding stream; of which Stanwell is the lead applicant (see full description for details)

(FEED study)
AUD$15 million – Queensland Renewable Energy and Hydrogen Jobs Fund

Project description

Stanwell Corporation is a Queensland Government owned corporation and a major provider of electricity to Queensland, the National Electricity Market, and large energy customers along the eastern seaboard of Australia. As part of its portfolio renewal strategy, Stanwell has identified renewable hydrogen as a key target market for transforming its business in a lower carbon future.

In May 2020, Stanwell and Iwatani Corporation signed a Memorandum of Understanding to undertake a concept study into a large-scale liquefied renewable hydrogen supply chain between Central Queensland and Japan. The study found that Central Queensland is a globally competitive location for renewable hydrogen production.

In November 2020, a partnership between Stanwell Corporation and Iwatani Corporation to progress planning on a new hydrogen export focused facility in Gladstone was announced.

In June 2021, it was announced that Stanwell had signed an Option Agreement with Economic Development Queensland to secure a 236-hectare site at Aldoga, west of Gladstone for its proposed hydrogen production facility.

In September 2021, key project announcements included:

  • ARENA announced up to AUD$2.17 million in funding to Stanwell Corporation to complete a feasibility study (at a cost of over AUD$10 million) to investigate the technical and commercial viability of a proposed green hydrogen export project to be located at Gladstone, Queensland. Additional funding support for the feasibility study was also provided through the Japanese Ministry of Economy, Trade and Industry (METI).
  • Stanwell and Iwatani formed a broader consortium with three leading Japanese companies (Kawasaki Heavy Industries, Kansai Electric Power Company and Marubeni) and APA Group to commence a detailed feasibility study into the proposed project. Greater detail on the consortium and member roles in the feasibility study is shown here.

The feasibility study investigated the complete hydrogen supply chain, including electrolysis, storage, handling, liquefaction, transportation and shipping and was designed with the requirements of an investment decision to move to the front end engineering and design (FEED) stage. The feasibility study was completed in June 2022, with bridging activities to be progressed ahead of FEED studies planned to commence in early 2023.

The project plans involve a staged development with first production of renewable hydrogen targeted for 2026, with scaled-up production capacity targeted at around 800 tonnes per day by 2031, using three gigawatts (GW) of electrolyser capacity (and which would require at least 7 GW of associated renewable solar/wind power generation capacity).

The project aims to (amongst other things):

  • Position Central Queensland as an Australian renewable hydrogen hub (the region has high-quality renewable energy resource and infrastructure)
  • Establish a first of its kind integrated hydrogen supply chain between Central Queensland and Japan.
  • Achieve the target hydrogen pricing set by the off-takers, by deploying the supply chain at scale, including production, liquefaction, and shipping of hydrogen
  • Improve the technology and commercial readiness of the project by leveraging expertise across the supply chain and long-term partnerships with key Japanese energy, gas, trading, and technology companies.

In addition to the feasibility study, Stanwell also undertook studies into local workforce and manufacturing development. Work on these programs will continue throughout the bridging and FEED stages of the project.

In November 2021, it was announced that Stanwell Corporation and ACCIONA Energia had signed a Memorandum of Understanding (MoU) on future energy supply for the proposed hydrogen facility. Under the MoU, a direct connection could be established between ACCIONA’s proposed Aldoga Solar Farm (due to commence construction in 2024) and the proposed hydrogen facility.

In April 2022, under the 2022 federal election caretaker arrangements, up to AUD$69.2 million in funding was awarded to Stanwell to support the development of a Central Queensland Hydrogen Hub. The Central Queensland Hydrogen Hub will bring together local, national and international companies and organisations to drive the development of the hydrogen industry in the region. Stanwell, as lead applicant, will work together with the other Central Queensland Hydrogen Hub participants to develop an implementation plan for the proposed concept. See media statement.

(Note: Following the outcome of the 2022 federal election, the final outcome of announced awards under the Clean Hydrogen Industrial Hubs Program is to be confirmed.)

In June 2022, as part of the State 2022-23 budget, it was announced that AUD$15 million from the Queensland Renewable Energy and Hydrogen Jobs Fund is to be allocated to progress the Central Queensland Hydrogen Project, particularly the planned FEED study.

 

Updated: September 2022

Note: The feasibility study undertaken by Stanwell Corporation noted herein received funding from ARENA as part of ARENA’s Advancing Renewables Program. The views expressed herein are not necessarily the views of the Australian Government, and the Australian Government does not accept responsibility for any information or advice contained herein.