Western Australia’s ambitions to become a global clean energy powerhouse received a major boost with the federal government awarding A$814-million in production incentives to the 1 500 MW Murchison green hydrogen project. 

The funding forms part of the Hydrogen Headstart programme, designed to accelerate large-scale renewable hydrogen projects by bridging the commercial gap between production costs and market prices.

The Murchison project, developed by Copenhagen Infrastructure Partners (CIP), will use solar- and wind-powered hydrogen to produce green ammonia for export. Once operational, it is expected to produce 900 000 t/y of green ammonia - nearly half of Australia’s current fossil fuel-based ammonia output.

The project is expected to create 3 600 construction jobs and 600 ongoing roles.

“CIP is honoured to receive this funding, which reinforces our shared vision with the Australian government to establish a leading green hydrogen industry in Australia,” said CIP partner Karsten Uhd Plauborg. 

“We see significant potential in green hydrogen and projects such as Murchison Green Hydrogen are key for countries and industries to take the next step within decarbonisation and achieve energy independence."

Federal Climate Change and Energy Minister Chris Bowen said the government is committed to unlocking private capital to drive the energy transition.

“Australia has one of the largest renewable hydrogen project pipelines in the world. This support is about unlocking that private capital to help realise our potential, not only to become a renewable-energy superpower but create a Future Made in Australia with real jobs right now."

The Murchison green hydrogen project is located 20 km north of Kalbarri, a site identified as one of the world’s most promising locations for green hydrogen production owing to its abundant wind and solar resources, limited cyclone risk, and proximity to key offtake markets.

Funding for the project will be distributed by the Australian Renewable Energy Agency over a ten-year period based on production milestones. It complements the new Hydrogen Production Tax Incentive, which, combined with Hydrogen Headstart, could provide A$8-billion over the next decade to support Australia’s emerging hydrogen industry.

The announcement follows additional federal commitments to bolster Western Australia’s green energy sector. 

Four battery storage projects, with a combined 654 MW capacity, have been approved under the Commonwealth’s Capacity Investment Scheme. 

Simcoa, Australia’s sole silicon manufacturer, will receive A$39.8-million through the Powering the Regions Fund to expand charcoal production at its Kemerton facility, replacing coal use.

“It is encouraging to see the federal government backing up its words with actions and recognising the role it will be required to play to help WA become a green energy superpower,” said Chamber of Minerals and Energy of Western Australia (CME) CEO Rebecca Tomkinson.

“However, the scale of the task ahead remains enormous. Realising WA’s potential will require a sustained focus on both incentivising new future-facing industries and ensuring the fundamentals are in place to support the continued success of our existing resources operations.

“The most basic building block is energy that is affordable, reliable and low-emission. Unfortunately, WA is currently seeing costs skyrocket."

A recent CME report on decarbonising WA’s South West Interconnected System (SWIS) found that while current and planned battery storage will likely be sufficient until 2030, urgent investment is needed in transmission and generation. The report calls for a six-fold increase in wind capacity and a doubling of both solar and gas-fired generation.

“CME has consistently called for the WA government to urgently release a draft transmission masterplan for the SWIS that outlines exactly where and when the new high-voltage lines will be constructed,” Tomkinson said.

“Without that blueprint, it is almost impossible to attract investment in large-scale solar and wind generation.

“Wind is particularly important to ensure WA has a source of low-emission electricity when the sun isn’t shining and would be ideally suited to future support through the Commonwealth CIS.

“Uncertainty over the future availability of low-emission energy is having a chilling effect on investment in the kinds of industries WA is desperate to attract and acting as a major barrier to moving further down the value chain into processing and refining the raw materials we have mined here for generations.”