The Australian Renewable Energy Agency (ARENA) has called for expressions of interest for the $2 billion Hydrogen Headstart program, which aims to establish Australia as a global hydrogen leader.
Announced in the 2023-2024 budget, the program has been designed by ARENA and the Department of Climate Change, Energy, the Environment and Water (DCCEEW), following consultation with a broad range of key stakeholders, which involved 114 written submissions and three public forums with over 400 participants.
Projects seeking to produce renewable hydrogen or derivatives at scale can apply for a production credit delivered over ten years to bridge the gap between the cost of producing renewable hydrogen and the market price.
Renewable hydrogen is a promising zero emissions energy vector and feedstock with the potential to transform Australia’s energy system, including in hard to abate sectors, but the emerging industry requires government support as it scales up.
Hydrogen Headstart builds on ARENA’s success as a leader in renewable hydrogen, having committed over $308 million to 46 renewable hydrogen projects since 2017.
ARENA has been instrumental in the early development of an Australian renewable hydrogen industry. Support for renewable hydrogen spans early-stage research deployment projects through to first-of-a-kind deployments including hydrogen refuelling and hydrogen trucks, hydrogen for producing renewable ammonia, hydrogen for use in alumina refining and remote power.
ARENA CEO, Darren Miller, said the Hydrogen Headstart program represents a change in Australia’s renewable hydrogen efforts.
“ARENA has been there at every step of Australia’s hydrogen journey, and we’re thrilled to be delivering this transformative program,” Mr Miller said.
“With Australia’s abundant renewable energy resources, we’re well placed to be a global leader in the renewable hydrogen industry.
“As other countries step up their ambitions, Australia is meeting the challenge and providing the investment we need to stay competitive in the global hydrogen race.
“This is the Australian Government’s largest investment in renewable hydrogen to date and a critical step in unlocking Australia’s renewable energy superpower.”
Industry welcomes initiative
The Clean Energy Council has welcomed the opening of the Expression of Interest process for large scale green hydrogen projects under the Hydrogen Headstart program.
Clean Energy Council Policy Director for Decabonisaion, Anna Freeman, said that the program is a critical step in scaling up Australia’s green hydrogen sector, and signalling the country’s intentions to become a leading producer in the emerging global market.
“It is encouraging to see the Australian Government moving swiftly to the next stage of the competitive process, following the consultation period on program design concluding in August,” said Ms Freeman.
“With the real prospect of other regions stealing a march on Australia in activating their domestic green hydrogen sectors, speed is the key to staying a credible contender in the global clean energy investment race.
“We currently have the largest project pipeline of any single country in the world. But proponents have been finding it extremely challenging to convert this renowned potential into commercially viable projects.
“Hydrogen Headstart can help get at least a couple of large-scale projects over the line by helping them bridge the gap between costs and returns.
“Noting that there are 22 GW of large-scale green hydrogen projects currently in the wings, we are also calling on the Government to outline its larger, long-term project support arrangements for early mover projects as soon as possible. This support should have the objective of accelerating the scale-up of Australian industry to an internationally cost-competitive basis,” Ms Freeman said.
The Australian Hydrogen Council also welcomed the launch of the expression of interest process for the program, with CEO Dr Fiona Simon stating she was pleased with the Federal Government and its efforts to quickly establish the process following industry consultation.
“AHC called for the Federal Government to act quickly to ensure hydrogen projects in Australia have certainty in the face of fierce global market competition, and we are pleased they have recognised the urgency.
“We’re at a critical stage where we need to get large hydrogen projects off the ground so we can scale up to gigawatt capacity. Hydrogen Headstart can make a significant difference by providing production credits for projects that will produce renewable hydrogen or derivatives at scale.
“AHC is committed to working with the Federal Government as it refreshes the National Hydrogen Strategy, and continues its response to the US Inflation Reduction Act.
“This is the swift action we need to remain competitive across the global hydrogen industry and we hope for further investment in Hydrogen Headstart to support the large pipeline of hydrogen projects underway in Australia,” Dr Simon said.
Expressions of Interest are open now until 10 November 2023.
For more information on Hydrogen Headstart, including eligibility requirements and how to apply visit: https://arena.gov.au/funding/hydrogen-headstart/