Hunter Valley Hydrogen Hub (Updated Project Description)

Hunter Valley Hydrogen Hub

The project proponent is progressing a large-scale renewables-based hydrogen project located in the Newcastle industrial and port precinct.

Main proponents: Orica	Main end-use classification: Industrial process – ammonia production	Status: Under development – FEED complete, ready to commence detailed design once FID is undertaken	Estimated cost: Capital cost estimated at between AUD$200-250 million
Other involvement:	Production details: Approximately 4,700 tonnes of renewables-based hydrogen production per annum, based on a 50-megawatt (MW) electrolyser	Location: New South Wales, Australia	Announced funding: AUD$70 million – Australian Government Regional Hydrogen Hubs Program – Hub Implementation funding stream AUD$45 million – New South Wales Hydrogen Hubs Initiative

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 February 2022, Origin Energy and Orica announced their intent to complete a feasibility study into the viability of a renewables-based hydrogen production facility and associated value chain project located in the Newcastle industrial and port precinct.

In July 2023, it was announced that Origin Energy was the recipient of AUD$70 million in funding (through the Australian Government’s Regional Hydrogen Hubs Program – Hub Implementation funding stream) to progress the proposed Hunter Valley Hydrogen Hub project. In addition, in September 2023, it was announced that Origin Energy was recipient of AUD$45 million in funding through the New South Wales Government’s Hydrogen Hubs Initiative to progress the project.

The fundings provided by the Federal and New South Wales Governments is in support of the initial (first) stage of overall project development.

On 3 October 2024, Origin announced its intention to exit the Hunter Valley Hydrogen Hub, citing a shift in corporate strategy with regard to renewable hydrogen.  Orica has advised that it remains committed to exploring opportunities in the renewables hydrogen sector and remains open to discussions with interested parties who share its vision for a sustainable energy future.

The initial stage of the project involves the development of the hydrogen production facility, hydrogen supply pipeline and recycled water connection on Kooragang Island (in Newcastle around 174 kilometres north of Sydney).

The initial stage of the proposed project consists of a 50-MW electrolyser system (comprising several large-scale electrolysis modules) and is expected to produce 4,700 tonnes of renewables-based hydrogen per annum. Storage capacity would be through high pressure storage vessels with a combined capacity of 4.75 tonnes. A PEM electrolysis system has been selected for the development.

The hydrogen hub would be supplied by supplied by grid-connected renewable electricity (through purchase and retirement of large-scale generation certificates and/or renewable electricity guarantee of origin certificates in the future) and locally sourced recycled water.

The hydrogen production plant and associated facilities are located in close proximity to the Orica ammonia/ammonium nitrate manufacturing facility also located on Kooragang Island, which is proposed to be the main offtake recipient of the produced hydrogen, with the remaining hydrogen made available for other use cases. A dedicated hydrogen supply pipeline of approximately 720 metres would connect the Hunter Valley Hydrogen Hub production/storage facilities with the Orica ammonia plant.

The project completed front-end engineering design (FEED) studies in December 2023 to inform the final technical and commercial details of the development. The project development application, Environmental Impact Statement (EIS) and associated documents were placed on public exhibition in the third quarter of 2023. In May 2024, the project was granted development consent to the development application subject to conditions.

Pending a final investment decision, the project is targeting first hydrogen production from 2027 with a final investment decision (FID) expected in CY2025.

The initial phase of the project is focussed on producing hydrogen for domestic use cases. Future phases, proposed to be located at the nearby Port of Newcastle, Clean Energy Precinct are being designed with the potential for export development.

(Note: the October 2022-23 federal budget released on 25 October 2022 included a broad support measure of AUD$100 million to support the Port of Newcastle and the Hunter region to become hydrogen-ready.)

 

Reviewed: December 2024