Another day — another setback for the Mega Green Hydrogen Dream
The The Australian Renewable Energy Hub (AREH) started at 6GW, grew to 11GW and then to 26GW as the mania spread. Such was the vision — it would produce five times the power of the whole Western Australian grid system. It would be the star of “exported renewable energy”.
Once pitched as the largest renewable project in the world — the fantasy is that 1,753 wind turbines, and nearly 11,000 megawatts of solar power will fill 6,500 square kilometers of the Pilbara in Northwest Western Australia.
The cable plan of 2018 to Jakarta and Singapore
Originally, the plan was to build a giant DC undersea cable to Jakarta or Singapore, but when that didn’t work they decided it would churn out 1.6 million tonnes of green hydrogen and 9 million tonnes of ammonia every year for export to Asia. The project was so ambitious they were going to have to build a whole new small town on the coast, with it’s own desalination plant — because rainfall is so low. “We need to have lakes” he said. Sure.
Funny how the same thing that makes a site great for solar power is exactly the reason the area is largely uninhabited, sparsely farmed and thus “available” for acres of solar panels. (Things like this are just another hidden cost of collecting “free” solar power).
BP controlled a whopping 63% of the AREH and while it still “believes wholeheartedly in the project”, it will take its money and run far, far away. Clearly, it doesn’t “believe” it’s profitable.
Not long ago, bizarrely, for an oil company, BP had a target to cut its own oil production by 40% from 2019 levels by 2030. Not surprisingly this led to an existential crisis where in February it was on the brink of being a takeover target. It’s now planning to reopen Libyan oil and gas fields instead.
The AREH project may still theoretically go ahead. (The other parties haven’t pulled out yet). But green projects are being cancelled all over the world. Just in the last week, Andrew ‘twiggy’ Forrest dropped plans to spend $900 million on hydrogen in Arizona, and confirmed that the billion dollar Gladstone PEM50 hydrogen project would definitely not proceed.
Things are so bad, the Labor government has even asked “Twiggy” for the money back.
But if (when) the Pilbara mega project falls over, it will do Australians a favour. As well as the subsidies, the project also needed a 260km transmission line called the Pilbara Green Link, which taxpayers would have to pay for, at a likely cost of a billion dollars or so.
BP walks away from epic $55bn Pilbara hydrogen dream
By Colin Packham and Brad Thompson, The Australian
“…in a statement on Thursday, BP said the project does not align with its current focus although it continues to believe wholeheartedly in the development.”
“Despite BP’s withdrawal, its holding was 63 per cent, the project’s remaining partners appear to be pushing ahead.”
The costs of hydrogen are obscenely high:
“In June, InterContinental Energy conceded today’s cost for delivering green energy was estimated at between $8 and $11 a kilogram, exceeding the price of rival energy sources it aimed to unseat. It expected green hydrogen costs to eventually fall to about $4 a kilogram, but even at those levels experts said it was unviable.”
Hydrogen is “The valley of disillusionment” says Portuguese Energy chief
The AREH project is symbolic of the bad news for hydrogen around the world:
Green hydrogen retreat poses threat to emissions targets
The gap between ambition and reality in Europe shows the extent of the reset happening within the industry, said Jun Sasamura, hydrogen manager at research company Westwood Global Energy.
Only about a fifth of planned hydrogen projects across the European Union are likely to come online by the end of the decade, he said. That equates to roughly 12 GW of production capacity against an EU target of 40 GW, Westwood Global Energy data shows.
Does any customer, anywhere, want to spend a dollar more to buy “Green Hydrogen”?