Hydrogen Headstart: industry responds to federal Budget

Treasurer Jim Chalmers recently delivered the Australian federal Budget, which will see the hydrogen industry benefit from $2 billion in funding for the Hydrogen Headstart initiative. The initiative is aimed at helping to scale-up green hydrogen energy production, which has the potential to become a significant export industry.

The funding will provide revenue support for investment in renewable hydrogen production through competitive production contracts and will cover the commercial gap between the cost of hydrogen production from renewables and its current market price.

The initiative aims to support two to three flagship projects which could provide up to 1 GW of hydrogen electrolyser capacity.

The Australian Hydrogen Council has welcomed the government’s budget announcement, which includes $38.2 million for a Guarantee of Origin scheme and $2.0 million to establish a fund to support First Nations people and businesses to engage with hydrogen projects.

Fiona Simon, CEO of the Australian Hydrogen Council, said the Budget is a “signal” to the market of Australia’s potential to be a world-leading hydrogen provider.

“Competitive hydrogen production contracts are a much-needed market mechanism to provide revenue support for flagship projects, and will help get more and more large hydrogen projects off the ground so we can scale up to gigawatt-scale capacity as soon as possible,” Simon said.

She also commented on the fund allocated to support First Nations people and businesses in the industry, labelling community support of hydrogen projects as “crucial”.

“There is, of course, much more to do, but as the name of the Hydrogen Headstart mechanism indicates, this is an important early step,” she said.

ReNu Energy (RNE) has also welcomed the funding as its hydrogen investee company, Countrywide Hydrogen (CH), is developing hydrogen projects in Tasmania to decarbonise the state’s economy in transport, natural gas substitution and diesel displacement.

There is already support in Tasmania to embrace hydrogen blending into Tas Gas’s natural gas network and supply industrial customers with 100% hydrogen. The delivered cost of hydrogen is critical to the success of these projects as it aims to replace traditional fossil fuels.

CH is confident the federal government support to minimise the price of hydrogen will accelerate the uptake of hydrogen, allowing emissions reduction targets to be achieved faster.

Darren Miller, CEO of the Australian Renewable Energy Agency (ARENA), echoed these thoughts, saying the funding will reduce the cost of hydrogen and help create thousands of regional jobs.

“Australia has an unparalleled opportunity to become a global green hydrogen leader, but we can’t afford to lose our momentum as other competing countries step up their ambitions and support,” Miller said.

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