Plans to build an up to 26 gigawatt wind, solar and green hydrogen hub on 6,500 square kilometres of Western Australia’s Pilbara region have had millions of dollars of new life breathed into them, just six months after they were abandoned by global oil and gas major bp.
The Australian Renewable Energy Hub (AREH), which was originated and is now wholly owned by InterContinental Energy, has been awarded a $21 million grant from the Australian Renewable Energy Agency (Arena), in the name of boosting the region’s transition to green iron production.
The injection of federal government funds follows the departure, last July, of the up to $55 billion project’s majority and controlling stakeholder, bp, off the back of a company-wide “strategy reset” and retreat from green energy projects around the world.
InterContinental Energy has since resumed its role as sole developer and owner of the ambitious project, which it says could produce up to 1.6 million tonnes of green hydrogen or 9 million tonnes of green ammonia a year, at full scale.
The first phase, however, is to build 1 GW of wind and solar electricity generating capacity and a relatively small-scale hydrogen production facility of around 150 megawatts (MW) at Port Hedland.
The company said on Tuesday that the Arena grant would support the next detailed stage of technical, economic and regulatory progress for AREH, which is targeting a final investment decision (FID) in 2028 and first power in 2030.
“The studies will focus on green hydrogen production at Boodarie near Port Hedland, integration with industrial partners, alongside environmental, water and cultural heritage considerations,” a company statement says.
Isaac Hinton, InterContinental Energy’s head of Australia, says the Arena grant is a “real testament to the fundamentals of AREH,” even despite last year’s major change in ownership.
“The Australian government and Arena, quite rightly, do a lot of due diligence to hand out this sort of money,” Hinton told Renew Economy from Western Australia on Wednesday.
“But it’s the most permitted project of its kind in the Pilbara, in terms of environmental approvals,” he adds, “It’s got options to lease the Crown land, an Indigenous Land Use Agreement; the engineering is quite well progressed.
“The next two years is around getting that detailed engineering and value engineering on the renewables – that’s … a big part of the Arena grant. But the other part is the hydrogen production facility we’re looking to build at Boodari near Port Headland and … to go through the pre-feed of that.
“So really, it’s the engineering and getting that validated and finalising some of the off-take conversations we’re having,” Hinton says.
Hinton says bp’s exit from the project last year was less about the fundamentals of AREH and more about the bp’s self described “strategy reset,” which has refocused the company on growing its upstream oil and gas business and investing “with increasing discipline into the transition.”
“We’ve got a completely different view on how we develop these projects that will take decades,” Hinton tells Renew Economy. “It’s important to note that the 26 GW is not one project. It’s effectively 20 mini projects… built over 20 years.
“And that’s the way we’re thinking about our projects, the Australian Renewable Energy Hub and the [up to 70 GW] Western Green Energy Hub [proposed for the far southeast of WA’s Goldfields region].
“That’s another …[project] we’re seeing some pretty good progress with early stage offtake for ammonia and environmental approvals going in.”
Hinton says that while InterContinental Energy is “proud and excited” to take back control of what it started with AREH, it would also welcome new investors with some of the patient capital needed to keep a project like this alive.
“A mega project like this does require partners into the future, and we’re always, always happy to look at them,” he told Renew Economy.
“We’ve got that technical expertise in … designing and building [the project], so we’re very happy to have the control … at the moment. But yes, we … are looking at those investors, and we’re already speaking to some at the moment, actually, which is good.
“Government … investment in the hydrogen ecosystem is absolutely vital to crowd in private investment, but we can’t rely on governments to solve some of the challenges, like, the costs,” Hinton says.
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Sophie Vorrath
Sophie is editor of Renew Economy and editor of its sister site, One Step Off The Grid . She is the co-host of the Solar Insiders Podcast. Sophie has been writing about clean energy for more than a decade.
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