MELBOURNE (Reuters) - Australia will fast track the approvals process for one of the world’s biggest wind and solar projects in Western Australia, which aims to start generating power and producing hydrogen and ammonia late this decade.
Canberra on Friday said it had awarded “major project status” to Asian Renewable Energy Hub (AREH), a $36 billion project that aims to initially build 15 gigawatts of power capacity and eventually expand to 26 GW.
At full capacity, the project could generate up to 100 terawatt hours a year. By comparison, Australia generated 265 terawatt hours last year. The site is 6,500 square kilometres, more than double the size of Luxembourg, in the arid Pilbara region.
“Not only will the plant be able to export at scale, it will also be able to supply industries in the region while creating new job opportunities and economic growth,” Industry Minister Karen Andrews said in a statement.
The project, on the drawing board since 2014, has switched from a plan to produce wind and solar power and transmit it to Asia, to a plan to use clean power to split water and produce hydrogen and then ammonia for export.
AREH aims to make a final investment decision in 2025.
InterContinental Energy Managing Director Alex Tancock said green hydrogen offered a much bigger opportunity than renewable power, as it could decarbonise several industries that rely on oil and gas, such as shipping, aviation, manufacturing and chemicals.
“All of those things require green hydrogen. So that’s what really makes it so exciting,” Tancock told Reuters.
Japan’s JERA has said it wants to use ammonia in its coal-fired plants to help cut carbon emissions starting in 2030 and mix in hydrogen at its gas-fired power plants.
AREH last week received environmental approval from the West Australian government for the first stage of the project, comprising 10 GW of wind capacity and 5 GW of solar.
Tancock said the main risk ahead was not financing, but how rapidly demand for green hydrogen grows.
“Australia should be, and one would assume will be, the Saudi Arabia of green hydrogen,” Tancock said.
Reporting by Sonali Paul; Additional reporting by Renju Jose; Editing by Sam Holmes
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