ARENA backs Queensland’s large-scale renewable hydrogen project in Gladstone

The Central Queensland Hydrogen (CQ-H2) Project. Image credit: Stanwell

The Australian Renewable Energy Agency (ARENA) announced $20 million in financing to Stanwell Corporation Limited (Stanwell) on behalf of the Australian Government to assist a front-end engineering and design (FEED) study for a large-scale renewable hydrogen project in Gladstone, Queensland.

The Central Queensland Hydrogen (CQ-H2) Project, which will initially include the installation of up to 640 MW of electrolysers to produce hydrogen for commercial operations starting in 2028, will be completed by the $117 million project. 

The hydrogen production plant would generate renewable gaseous hydrogen, which off-takers will buy and transform into renewable ammonia and liquid hydrogen for export, ARENA said in a news release.

As more offtake agreements are negotiated, the agency said the facility will increase its initial hydrogen production capacity from 200 tonnes per day (tpd) to 800 tpd, with full-scale production beginning in 2031.

A hydrogen liquefaction facility that will be built in the Port of Gladstone and produce 400 tpd of liquefied hydrogen for export by the year 2030 will also be the subject of the study.

Meanwhile, a group of businesses from Australia, Japan, and Singapore have joined together to take advantage of the specialised knowledge each partner brings to the hydrogen manufacturing supply chain. 

The consortium also consists of the following companies: Keppel Infrastructure, Iwatani Corporation, Kansai Electric Power Company, and Marubeni Corporation.

With the use of Power Purchase Agreements (PPAs) with Queensland wind and solar farms, delivered through Stanwell’s renewable energy portfolio, both the hydrogen production and liquefaction facilities will be grid-connected.

ARENA CEO Darren Miller said Australia is well positioned to take advantage of export prospects to Asia, but doing so will need hasty development of sizable hydrogen production and export facilities at a globally competitive price point.

“Stanwell’s project represents a near-term renewable hydrogen production opportunity at globally significant scale,” Miller said. 

He added, “The development of a renewable hydrogen hub in Gladstone could help decarbonise heavy industrial facilities in the region and create an export supply chain between Australia and Japan and Singapore.”

Michael O’Rourke, CEO of Stanwell, expressed his appreciation of ARENA’s ongoing support of the CQ-H2 project. 

He stated that their cooperation was critical in assisting us in reaching this momentous milestone and that this money would serve as a critical starting point for the next stages of our joint journey to strengthen Australia’s hydrogen economy.

The FEED study is scheduled to be finished by the middle of 2024. 

At its peak, the CQ-H2 project would provide an estimated 8,900 employees.