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Australian explosives manufacturer Orica has taken final investment decision (FID) on its government-backed 50MW green hydrogen facility that will supply existing ammonia production in New South Wales.
The decision makes the Hunter Valley Hydrogen Hub the first project backed by the federal government’s green hydrogen revenue support scheme to reach FID. It comes despite Orica’s original project partner of the development, citing slow development of the hydrogen market.
The project has already received AUD $115m ($79.2m) in state and federal capex support. Once operational, it will also ($297.5m) in per kilogramme subsidies over 10 years from the government’s first Hydrogen Headstart programme.
It will produce up to 4,700 tonnes of green hydrogen per year to supply Orica’s existing Kooragang Island ammonia and ammonium nitrate plant, displacing around 7.5% of current natural gas consumption.
With construction expected to begin this year, the new electrolyser plant could be operational in early 2029.
The electrolyser will use recycled water and grid-connected electricity through generation certificates and renewable electricity guarantee of origin certificates.
“Ammonium nitrate is critical to mining, and this project is about making these essential products here at home using Australian-made renewable hydrogen,” said Climate Change and Energy Minister Chris Bowen.
It’s a significant moment for the Australian green hydrogen market, which, despite heavy government support, has seen numerous high-profile projects cancelled or delayed, sparking major criticism from politicians.
After originally selecting six projects under the first Hydrogen Headstart round, just two – including Orica – went on to secure funds.
The Headstart round recently shortlisted seven green hydrogen derivative projects after the scheme’s to AUD $1bn ($688m).
