Hydrogen Headstart: Australia launches review of national strategy, funding priorities
By on July 10, 2023
AUD2 billion program to be shaped by ARENA
First announced in May, the new Hydrogen Headstart program will invest AUD2 billion across the full value chain to accelerate development of Australia’s hydrogen industry. The program aims to “help bridge the commercial gap for early projects”, and includes a nominal electrolyser deployment target of 1 GW by 2030. To bridge the commercial gap, a competitive tender process will be established to:
…select large Australian-based projects producing either hydrogen from renewable energy or derivative products made from hydrogen produced from renewables, such as ammonia. Successful projects will have the opportunity to receive funding as a production credit that will cover the current commercial gap between the cost of hydrogen produced from renewables and its market price. This should enable producers to offer hydrogen to users at a price that will encourage them to switch to using this clean fuel.
From Hydrogen Headstart: consultation paper (July 2023)
Following an ongoing industry consultation process Hydrogen Headstart will be open for EoIs in the first quarter of 2024, successful applicants will be awarded contracts and provided with ongoing payments over a 10 year period starting from 2026-27. The program is expected to support the delivery of at least 2 large-scale hydrogen projects.
Australia’s national renewable energy funding body ARENA will lead development of the “flagship” scheme alongside the Department of Climate Change, Energy, the Environment and Water (DCCEEW). To date, ARENA has played a critical role in the development of Australia’s emerging hydrogen industry, investing more than AUD 255 million in forty-four separate hydrogen projects.
Industry feedback welcome on national hydrogen strategy
In a separate process, DCCEEW will lead a review of Australia’s national hydrogen strategy (last updated in 2019). The announcement notes that, although Australia has a pipeline of up to $300 billion of potential hydrogen projects (the world’s largest), progress has been slow to date. Australia was the third country to publish a national hydrogen strategy in 2019, but now more than 30 nations have now released their own hydrogen strategies, and made tangible progress in developing their own domestic industries. A government report released this May into the state-of-play for hydrogen in Australia echoes these concerns, noting that progress to date has been strongest in decarbonising ammonia production in Australia. Feedback is due by 18 August.