H2Kwinana

January 22nd, 2024

H2Kwinana 

The project proponents are investigating the establishment of a renewables-based hydrogen hub at bp Australia’s Kwinana Energy Hub site in Western Australia.

Main proponents:

bp Australia, Macquarie Capital

 Main end-use classification:

A range of end-uses is under evaluation including industrial applications and mobility uses

 Status:

Under development – in November 2023, bp announced that the project had entered the front-end engineering and design (FEED) stage

 

 Estimated cost:

Capital cost estimates are based on production scenarios and electrolyser type evaluated.

Base scenario 1: AUD$334-399 million

Base scenario 2: AUD$1,253-1,498 million

Growth scenario: AUD$2,434-2,922 million
Other involvement:

 

 Production details:

Various scenarios evaluated ranging from 44 tonnes per day hydrogen production (Base 1) to 143 tonnes per day (Base 2) to 429 tonnes per day (Growth).

 Location:

Western Australia, Australia

 Announced funding:

AUD$300,000 – Western Australian Government Renewable Hydrogen Fund Round 2 (feasibility studies)

Up to AUD$70 million – Australian Government Regional Hydrogen Hubs Program – Hub Implementation funding stream

Project description

(Note: This project is one of six applicants that have been shortlisted by ARENA and invited to submit a full application in the next stage of the AUD$2 billion Hydrogen Headstart Program.)

In October 2020, bp Australia announced that, after 65 years of operation, it would cease fuel production at its Kwinana Refinery, near Fremantle in Western Australia, and convert the facility to an import terminal.

At the time of the closure announcement, following discussions with the State Government, bp committed to exploring opportunities to convert the Kwinana site to a renewable and clean energy production hub – further information on the bp Kwinana Energy Hub can be found here. The project proponents are evaluating co-development of an integrated hydrogen facility, which would be a key component of the bp Kwinana Energy Hub development.

The Kwinana Industrial Area as a whole is the largest industrial cluster in Western Australia and includes minerals refineries (alumina, nickel), chemical plants, cement works, power stations, a range of supporting industries (construction, fabrication, engineering, etc.) and five major bulk jetties along the Industrial Area coast outline.

The project proponents have completed the concept development phase of the project. A H2Kwinana Public Knowledge Sharing report was published in August 2023 and which included the outcomes of a technical feasibility assessment and a preliminary cost estimate to inform the next stage of more detailed project development planning.

Three hydrogen production scenarios have been considered in the concept development phase and are presented in the Public Knowledge Sharing report:

  • Base scenario 1: 44 tonnes per day – the estimated maximum output (using PEM electrolysers) that can be delivered by the existing power supply to the bp site provided from a Western Power 132 kV substation.
  • Base scenario 2: 143 tonnes per day – maximum initial target to fulfil all potential near-term demand. The power requirement for this scenario would require the provision of a (expanded) Western Power 330 kV system.
  • Growth scenario – 429 tonnes per day – the potential demand growth scenario identified for the development for the mid-2030s timeframe.

The technical assessment noted that both Alkaline and PEM electrolyser technologies be further studied to confirm the most appropriate technology for the development.

The range of electrolyser capacities for the three scenarios presented in the Public Knowledge Sharing Report is shown below:

  • Base scenario 1: 101-111 MW
  • Base scenario 2: 380-418 MW
  • Growth scenario: 1,030-1,133 MW

The Public Knowledge Sharing report notes that power supply for the development would be from a renewables-based power purchase agreement (PPA) or matched with Large Scale Generation Credits (LGCs) (until 1 January 2031), which would be informed by requirements under the Guarantee of Origin scheme under development by the Commonwealth Government.

The water supply for the development is proposed to be sourced from the Kwinana Water Reclamation Plant.

The preliminary capital cost estimates presented in the Public Knowledge Sharing report reflect the three production scenarios and electrolyser types evaluated:

  • Base 1: AUD$334-399 million
  • Base 2: AUD$1,253-1498 million
  • Growth: AUD$2,434-2,922 million

The bp site is considered to be adequate for the largest plant design evaluated during the concept development phase (of 429 tonnes hydrogen per day).

In November 2023, it was announced that the project had entered the FEED stage, with the project planning to install 100 MW of electrolyser capacity at the site, with the potential to expand to a total of 1.5 GW production in subsequent phases. The announcement notes that globally, bp is proceeding with the procurement of long lead items, including electrolysers, for its projects, including H2Kwinana, as well as noting that subject to approvals and public policy and business decisions, production from H2Kwinana is anticipated from 2026.

The project has received funding support from state and federal sources:

  • In September 2021, it was announced that bp Australia was the recipient of AUD$300,000 in funding under Round 2 of the Western Australian Government Renewable Hydrogen Fund (feasibility studies).
  • bp Australia is recipient of up to AUD$70 million in support of its H2Kwinana hydrogen hub development through the Australian Government’s Regional Hydrogen Hubs Program (Hub Implementation funding stream).

The hydrogen produced would be for use by bp, industrial consumers (especially within the Kwinana Industrial Area), tube trailer loading and mobility applications.

As part of its bp Kwinana Energy Hub development, bp Refinery (Kwinana) Pty Ltd has developed the Kwinana Renewable Fuels project proposal (for the construction and operation of a renewable fuels processing facility that would produce renewable diesel and sustainable aviation fuel from vegetable oils, animal fats and other biowaste products). The renewable fuels project proposal is the potential foundation offtake for the H2Kwinana project, which would provide renewables-based hydrogen generation as an energy source to decarbonise bp’s site operations (including the renewable fuels proposal) as well as for use by industries within the Kwinana industrial area and for export and domestic distribution.

 

Updated: January 2024