Origin Energy ditches hydrogen, focuses on storage

Electricity and gas supplier Origin Energy is to abandon its involvement in the Hunter Valley Hydrogen Hub in a blow for green hydrogen hopes in Australia.

The company said it was exiting the proposed 55MW HVHH project and halting hydrogen plans because of uncertainty over the pace and timing of hydrogen market development, and the risks associated with developing capital-intensive projects of this nature.

However the decision is also a blow to chemicals and explosives business Orica, which has a preliminary agreement to take 80 percent of the green hydrogen produced from the hub for its 360,000 t/yr ammonia facility on Kooragang Island, Newcastle.

Origin CEO Frank Calabria said: “We have worked hard to evaluate the investment case for hydrogen and are grateful for the strong government support.

“We continue to believe hydrogen could play a role in the future energy mix.

“However, it has become clear that the hydrogen market is developing more slowly than anticipated, and there remain risks and both input cost and technology advancements to overcome.

“The combination of these factors mean we are unable to see a current pathway to take a final investment decision on the project.”

Orica Managing Director and CEO, Sanjeev Gandhi said the company was disappointed in the decision but was grateful for the progress the two companies made together, and in the level of support received from governments.

Ghandi said: “We remain committed to exploring new opportunities in this promising sector.

“We’ve been operating our Kooragang Island site for over 50 years and are committed to ensuring both our manufacturing facility and the Hunter Valley region remain competitive in a low carbon economy, while also strengthening Australia’s domestic manufacturing capability.

“We remain open to discussions with interested parties who share our vision for a sustainable energy future and Australia’s hydrogen economy”.

The hydrogen hub project was shortlisted under the Australian Government’s Hydrogen Headstart programme, having previously secured Commonwealth and New South Wales grant funding programme commitments.

Origin said it remained open to exploring commercial options for the HVHH.

Picture: Orica had planned to take hydrogen from the Hunter Valley Hydrogen Hub