The federal government's latest investment in Newcastle's hydrogen "hub" will help pay for a pilot plant at Kooragang Island.
Energy Minister Angus Taylor announced on Thursday that the government would spend $82 million on two hydrogen projects in Newcastle, in addition to the $100 million allocated to Port of Newcastle in last month's budget for infrastructure to help prepare the port for hydrogen exports.
As reported in Thursday's Newcastle Herald, the new money includes $41 million to joint venture partners Port of Newcastle (PoN) and Macquarie Capital for a "phase one" 40-megawatt green hydrogen electrolyser to be built at the port's "energy precinct" beside the coal loaders on Kooragang Island.
The port and Macquarie have not made a final investment decision on their project, but the Newcastle Herald understands a feasibility study funded by the Australian Renewable Energy Agency (ARENA) has produced promising results.
The government also will spend $41 million on Origin Energy's proposed 55MW green hydrogen electrolyser in Newcastle.
Origin is collaborating on the project with Orica, a potential customer, suggesting its hydrogen operation could be somewhere near the latter's ammonia plant on Kooragang Island.
Origin is also completing a feasibility study and is yet to make a final investment decision.
Mr Taylor said the Origin electrolyser would be "nearby" the PoN-Macquarie plant and the two together would form a "super hydrogen hub".
The two producers could compete against each other, but Mr Taylor said they would have "differences in focus and customer base".
"It will be one of the biggest electrolysers built in the world," he said of the Origin proposal.
"That's what we want to see: Scaling this industry up, getting to a point where customers have the confidence supply is coming and costs are coming down to open up attractive markets."
Hydrogen is an emerging fuel and energy alternative with potential uses in transport, industry and storage, though most car manufacturers have focused their research and development on batteries instead.
Port chief executive Craig Carmody said the joint venture's pilot plant could start construction in late 2023 and produce 5000 tonnes of hydrogen in the 2025-26 financial year.
Both PoN-Macquarie and Origin hope to scale up their plants significantly to supply domestic and international hydrogen markets.
Origin plans to mix some of its hydrogen into the natural gas network, as has been occurring since November at Jemena's Western Sydney Green Gas Project.
It also plans to build three refuelling stations in the Hunter to supply hydrogen trucks and buses.
Origin chief executive Frank Calabria said the government funding would "accelerate our plans to create a safe, reliable and commercial-scale green hydrogen supply chain in the Newcastle industrial and port zone".
