Origin Energy has decided to pull out of the Hunter Valley Hydrogen Hub (HVHH), its planned hydrogen development project in NSW, citing slow market development.
Origin CEO Frank Calabria said: “We continue to believe hydrogen could play a role in the future energy mix. However, it has become clear that the hydrogen market is developing more slowly than anticipated, and there remain risks and both input cost and technology advancements to overcome.”
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Announced in 2022, HVHH was formed through a development agreement between Origin and Orica, a provider of mining and infrastructure solutions.
The project is located on Kooragang Island, a suburb in the city of Newcastle in NSW chosen for its proximity to high energy users and existing energy and port infrastructure.
The hydrogen produced at HVHH was intended to progressively displace natural gas as a feedstock in nearby ammonia manufacturing as well as provide alternate road transport fuel to reduce emissions.
Origin and Orica received NSW Government planning approval, and HVHH was shortlisted under the Australian Government’s Hydrogen Headstart programme, having previously secured Commonwealth and NSW grant funding programme commitments.
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By GlobalDataPrior to Origin’s announcement, the companies were targeting a final investment decision and long-term power purchase agreements with NSW renewable energy developers before the implementation phase.
Origin stated that it remains open to exploring commercial options for the HVHH but intends to cease work on all hydrogen development opportunities.
“Ultimately, we believe investments focused on renewables and storage can best support the decarbonisation of energy supply and underpin energy security over the near-term,” Calabria concluded.
Australia has one of the largest pipelines for hydrogen developments globally, accelerated by support from government policies and funding bolstered by the private sector. A significant proportion of its projects are in a relatively advanced stage of development relative to the global market, according to Power Technology’s parent company GlobalData.
