A half-billion dollar pilot hydrogen project is underway, with the construction works of liquefaction facilities commencing.
The facilities are linked to the Hydrogen Energy Supply Chain (HESC) project at Port Hastings in Victoria, which will look at the feasibility of turning brown coal from the Latrobe Valley into hydrogen, which would then be liquefied and exported to Japan.
If the decision is made to proceed to commercial scale, the project has the potential to provide low emission hydrogen that can help meet Victoria’s future energy needs, as well as kick-start the emergence of a new, global export industry.
The pilot project is expected to create 400 jobs across the Victorian supply chain – both in the Latrobe Valley and at the Hastings hydrogen liquefaction facility – and potentially thousands more in the commercial phase.
It will also enable the transfer of knowledge and expertise in the production and utilisation of hydrogen to Victorian companies.
It could make Victoria a world leader in the fast-growing hydrogen industry, which is expected to be worth $1.8 trillion by 2050.
Minister for Resources and Northern Australia, Matt Canavan, said the sod turn symbolised new job and investment opportunities for the region, as well as the nation.
“Australia is well placed to become a global leader in hydrogen production and this pilot project is a crucial step towards making this vision a reality.
The Australian and Victorian Governments have committed $50 million each to the $500 million project, which is also supported by the Japanese Government and Japanese industry.
“This project promises to be of huge benefit to both nations and particularly the state of Victoria, which has the opportunity to develop an alternative and value-adding use of its abundant brown coal reserves in the Latrobe Valley.
“The use of hydrogen is part of Japan’s vision of a clean energy future and any emissions from the pilot project will be fully offset, with commercial scale operations required to use carbon capture and storage to ensure a low emission source of hydrogen.”
Minister for Trade, Tourism and Investment, Simon Birmingham, said the project was the first of its kind in Australia and was built on the strong and long-standing trade partnership between Australia and Japan.
“This pilot project is the first step in creating a commercial scale hydrogen supply chain which could lead to billions of dollars in export earnings for Australia and help Japan meet its strategic energy targets for 2030 and beyond.
“As global demand for hydrogen continues to grow, strategic investments such as this one have the potential to turn Australia into a major global exporter of hydrogen, particularly to countries such as Japan and South Korea.
“Australia has long been a reliable supplier of energy needs and there is no doubt that we are uniquely placed to continue to meet those global needs by becoming a leader in hydrogen energy.
“Future commercial scale operations in the Latrobe Valley and around the country will help transform Australia into a hydrogen powerhouse, delivering significant economic benefits and thousands of extra jobs for Australians.”
Victorian Minister for Economic Development, Tim Pallas, said, “The hydrogen economy has the potential to be an important future sector in Victoria, with the Hydrogen Energy Supply Chain Pilot Project providing an opportunity for Victoria to lead the global emergence of this industry.
“The commencement of construction on Australia’s first hydrogen liquefaction and export facility begins Victoria’s quest to become a global leader in hydrogen.”
Kawasaki Heavy Industries Global Chair, Shigeru Murayama, said, “This new facility that we are building here at Western Port will be the foundation of a potential, new and exciting hydrogen export industry for Australia.
“Delivering clean hydrogen to the world for the benefit of our environment is a goal we share deeply and we look forward to achieving.”
The project will be delivered by a consortium of Japanese energy and infrastructure companies led by Kawasaki Heavy Industries. The consortium partners include Kawasaki Heavy Industries, J-Power, Iwatani Corporation, Marubeni Corporation and AGL, with KHI and Iwatani leading the build at the Port of Hastings.