Controversy over gigantic hydrogen project in Australia

26,000 MW of wind and solar power was to be generated in Western Australia, 3,000 MW of which was destined for large energy consumers in the Pilbara region, including mines and downstream mineral processing. But the bulk of the Asian Renewable Energy Hub's energy was earmarked for large-scale green hydrogen production, both for Australia itself and overseas. Japan and Korea in particular had signalled interest in importing clean hydrogen in the coming years to decarbonise their economies and maintain energy security.

Very good wind and solar resources in the region and the sheer size of the project should ensure competitive prices for renewable energy with a high capacity factor. And the first successes proved the executing consortium right. Back in 2014, project development began with a study of the entire northwest coast of Western Australia. The local government had recognised the potential of the project from the beginning and awarded it with Lead Agency status in July 2018. In October 2020, the first 15,000 MW expansion stage received environmental approval from the Western Australia Government. In 2025, they had planned to make the final investment decision, with the first exports of the green hydrogen in 2027/28.

The executing consortium lists all the advantages of the Asian Renewable Energy Hub in this video (Source: Asian Renewable Energy Hub)

Now, however, the project has received a bitter blow. This was preceded by a review of the plans by the executing  consortium and a subsequent submission with some changes.

Thus the project was originally to export electricity via undersea cables, as ENB reports. The new application instead has called for the construction of pipelines and other infrastructure. This includes the construction of a desalination plant with intake and discharge pipelines as well as ammonia pipelines and loading stations 20 km off the coast to be able to load ships there.

While the consortium argued that it would not only bring billions of dollars to the local Australian economy, it would also help neighbouring countries with carbon-free energy, while creating 7,000 full-time jobs during construction and 50 years of operation. But apparently that was not enough, because now Federal Environment Minister Sussan Ley refused to sign off on the project.

The reason is apparently environmental concerns due to the changed plans. The consortium had not yet submitted an environmental plan to the government, but - as usual - only outlined a proposal. However, according to local media, a project of this size and type normally first receives approval in the early phase and only then submits an environmental plan. In this case, however, the Ministry of the Environment intervened and was not satisfied with the new plans. The changes with pipelines and loading stations at sea, which posed a new threat to the waters, were too big.

Nonetheless, project operator Intercontinental Energy still hopes for implementation, as thay explained when asked by Golem.de: "We are now working to understand the minister's concerns and will continue to work with the minister and her department as we work on the detailed design and engineering aspects of the project."

Following the Minister's veto, the operator must now submit comments and a new application afterwards explaining how to minimise the environmental risks associated with the development.

How long this process will take and whether the final investment decision for 2025 can be kept is not yet foreseeable.