Australia’s Hydrogen Headstart Program opens up for second round
The second round of the Hydrogen Headstart Program, run by the Australian Renewable Energy Agency (ARENA), is officially open, with up to $2 billion in funding available.
The funding will support large-scale hydrogen energy projects across Australia, with a focus on improving efficiency of electrolysers, innovations surrounding plant construction, and reducing costs of renewable electricity.
What is ARENA?
The Australian Renewable Energy Agency, or ARENA, is an Australian government agency focused on encouraging innovations in renewable energy. Founded in 2012, ARENA has supported 663 projects with $2.25 billion in grant funding, unlocking a total investment of almost $9.75 billion in Australia’s renewable energy industry.
ARENA CEO Darren Miller said, “ARENA is aiming to bridge the gap between ambition and reality. We know that renewable hydrogen will play a critical role in decarbonising heavy industry, particularly in sectors where electrification is not feasible or alternatives are limited.
“Getting renewable hydrogen to commercial scale will take time, innovation and ongoing support. By backing industry first-movers, ARENA is providing the certainty to invest, innovate and develop the next wave of projects and learnings.”
What is the Hydrogen Headstart Program (HHP)?
The Hydrogen Headstart program provides up to $2 billion of support to a number of large-scale hydrogen projects. ARENA CEO Miller said that the main aims of the program are to unlock innovation, shape new supply chains and cement Australia’s role in the global energy transition.
ARENA highlights these as just some of the areas that endorsed projects may focus on:
- Innovative plant construction and design to reduce capital costs
- Improving efficiency of electrolysers
- Flexible operations and other methods to reduce the cost of renewable electricity
- Enhancing end-use infrastructure for priority sectors, including hydrogen for green ammonia, iron and steel, alumina, and long-distance heavy transport including aviation and shipping.
Successful projects may choose to receive funding as a production credit, which covers the current gap between the cost of producing renewable hydrogen and its market price. This would enable producers to offer hydrogen to users at a considerably lower price.
What has the HHP previously supported?
The first round of the Hydrogen Headstart Program provided funding to two large-scale hydrogen projects.
Round 1 saw $814 million in funding allocated to Copenhagen Infrastructure Partners’ (CIP) 1,500 MW Murchison Green Hydrogen Project in Western Australia. The project involves the large-scale production of renewable hydrogen and ammonia in Western Australia, with a capacity of up to 1.5 GW of electrolysis and 3,600 tonnes per day of Haber-Bosch ammonia.
Orica’s Hunter Valley Hydrogen Hub was the second project to receive support from the program, with up to $432 million in grant funding secured. The hub will produce renewable hydrogen using a 50-megawatt electrolyser, with an estimated annualised emissions benefit at phase one equivalent to taking 26,500 cars off the road each year.
