Insider Brief
- The Australian Renewable Energy Agency (ARENA) has awarded $814 million in funding to Copenhagen Infrastructure Partners’ (CIP) Murchison Green Hydrogen Project, marking the first recipient of the Hydrogen Headstart Program.
- The 1,500 MW project in Western Australia will produce renewable hydrogen and ammonia using wind, solar, battery storage and desalinated water, operating entirely off-grid to support global decarbonisation efforts.
- ARENA’s funding aims to bridge the cost gap between market price and production of renewable hydrogen; payments will be based on hydrogen output over 10 years, subject to meeting development and operational milestones.
PRESS RELEASE – The Australian Renewable Energy Agency (ARENA) has announced the first recipient from its Hydrogen Headstart Program, with $814 million in funding allocated under round 1 to Copenhagen Infrastructure Partners’ (CIP) 1,500 MW Murchison Green Hydrogen Project in Western Australia.
ARENA CEO, Darren Miller said Australia has immense potential when it comes to hydrogen projects, however, many projects face challenges due to the current gap between the market price for renewable hydrogen and production costs.
“At the time it was announced, Hydrogen Headstart was the largest government investment in Australia’s developing renewable hydrogen industry. ARENA’s support will help Australia’s first large-scale projects get to financial close and deliver on Australia’s promise as a provider of clean energy to decarbonize industry in Australia and globally,” Mr. Miller said.
“The Hydrogen Headstart Program commits funding to bridge the current commercial gap in the form of a production credit, meaning funding is only provided once projects are constructed and operational.”
“Enabling hydrogen projects through Hydrogen Headstart is essential to ensure our economic prosperity as the world transitions to cleaner forms of energy especially in hard to abate sectors such as ammonia, iron and alumina.”
“CIP’s Murchison project is an example of how we can leverage Australia’s high quality solar and wind resources to produce low-cost renewable hydrogen and ammonia at scale, increasing export opportunities and embedding Australia as a key enabler of global decarbonisation,” Mr Miller said.
Hydrogen Headstart recipient Murchison must now satisfy a number of development conditions and achieve commercial operations before the funding is released. Funding under the program is paid based on production volumes over a 10-year operating period.
To date, ARENA has provided over $370 million to 65 renewable hydrogen projects from early-stage research to deployment projects.
According to analysis by the Department of Climate Change, Energy, the Environment and Water (DCCEEW), Australia’s hydrogen industry could unlock over $50 billion in additional private sector investment and create up to 16,000 new jobs by 2030.
Murchison Green Hydrogen CEO, Shohan Seneviratne said: “CIP is honoured to receive Hydrogen Headstart funding, which reinforces our shared vision with the Australian Government to establish a leading green hydrogen industry in Australia. We are committed to contributing to Australia’s green hydrogen ambitions by creating local jobs, supporting skills development and sharing project benefits with local communities, including First Nations.”
“We appreciate the support from the Australian Government, Minister Bowen, and ARENA and commend their leadership, vision and collaboration to make Murchison and the Australian hydrogen industry a reality.”
Further information concerning Hydrogen Headstart Round 1 outcomes will be announced in due course.
Murchison Green Hydrogen project summary:
The Murchison Green Hydrogen project is being developed by Copenhagen Infrastructure Partners through its Energy Transition Fund I (ETF I), with the project team based locally in Perth. Murchison involves large-scale production of renewable hydrogen and ammonia in the Mid West of Western Australia. The project will be located approximately 15 km north of the coastal town of Kalbarri and will include up to 1.5 GW of electrolysis and 3,600 tonnes per day of Haber-Bosch ammonia production capacity. The facility will operate completely off-grid, powered by approximately 1.2 GW of solar photovoltaic and approximately 1.7 GW of onshore wind new build generation with a 600 MW /1,200 MWh battery energy storage system and water sustainably sourced through a new desalination facility. Renewable ammonia is expected to be exported to support global decarbonisation.
CIP’s ETF I is the world’s largest dedicated renewable hydrogen fund with approximately AUD 5 billion available for investment in decarbonising hard-to-abate industries such as steel-making, co-firing, chemical production, agriculture and transportation.
