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Hydrogen deal to turn Collinsville from coal to $20b green energy hub

The old coal town of Collinsville will be the centre of a $20 billion renewable energy and ammonia/hydrogen project worth billions led by Korea Zinc’s Ark Energy in Townsville.

Sep 21, 2022, updated Sep 21, 2022
The Han-Ho hydrogen partners at today's signing with the Premier and Minister Mick de Brenni

The Han-Ho hydrogen partners at today's signing with the Premier and Minister Mick de Brenni

As the Palaszczuk Government prepares to release its energy plan next week, three of Korea’s largest conglomerate groups have joined forces to develop the scheme that could potentially deliver 3000 megawatts of renewable energy and an export supply chain for ammonia, which is a carrier of hydrogen.

The Han-Ho consortium includes Korea Zinc and its subsidiary Ark Energy, Hanwha Impact and SK Gas. The three signed a Memorandum of Understanding to establish the consortium which would develop a supply chain to export more than 1 million tonnes of green ammonia a year to Korea by 2032.

Ark’s Daniel Kim said renewable energy would underpin the production of green ammonia, but warned that a financial investment decision was not likely until 2027-28 and there were constraints, including “a prohibitive cost curve in all things hydrogen”.

The construction phase of the project was probably four years with 750 jobs in the renewables alone. A heads of agreement was anticipated in December this year.

“It is a very large undertaking, even the renewable energy component of it, which is 3000Mw which could be one of the largest renewable precincts in Australia,” he said.

Solar Citizens deputy director Stephanie Gray said the announcement represented a doubling of the state’s large-scale clean energy capacity.

“The biggest renewable energy project operating in the state right now is the 450 MW Coopers Gap Wind Farm and construction is starting on the 1000 MW Macintyre wind precinct,” she said.

“This is an exciting step towards Ark Energy achieving their goal of becoming a major global renewable hydrogen exporter right here from North Queensland.”

She said Ark had previously revealed plans for a 3500 MW hydrogen production facility in Townsville by 2040 which would need at least 7700 MW of clean energy generation.

Kim said it was a very historic day for Australia and Korea, but he said the $14 billion a year in exports to Korea in coal and gas “were clearly now at risk” because of that country’s commitment to net zero by 2050.

“This is why today’s announcement is so important,” he said.

“The shared vision of this consortium is transform the bilateral relationship between resources and fossil fuels to renewable energy and green hydrogen.”

The Collinsville green energy hub covers a vast area of 190,000ha and 12 landholders have been signed up. Collinsville is currently home to a coal mine and a shuttered coal fired power station. It was also where the previous Coalition Government proposed a new coal fired power station.

Under the plan, Ark would develop the renewable component. Korea Zinc, Hanwha and SK Gas would be buyers of the ammonia and also contribute through infrastructure and technology. Combined they have a demand for about double the forecast production from the project, but Korea has a potential market of about 21 million tonnes of ammonia.

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However, details of what would be built in Collinsville and elsewhere were not revealed.

Premier Annastacia Palaszszuk said the deal was a step forward in Queensland’s quest to be a hydrogen powerhouse.

“When we are talking about the transformation, it is happening in regional Queensland,” the Premier said.

“This MOU signals their intention to develop future green hydrogen and ammonia opportunities in North Queensland which means more local jobs and more investment.”

Hydrogen and Energy Minister Mick De Brenni said Queensland was being set up to be the world’s renewable energy and green hydrogen superpower.

“Up in north Queensland the jobs and economic potential is being supercharged by the landmark agreement signed today,” he said.

“This is a critical step for (Queensland and its trading partners) to realise the full potential of green hydrogen.”

Korea Zinc has been an early mover in the renewable energy sector and plans to decarbonise its operations. It bought Epuron earlier this year which gave it access to renewables projects with a potential 9 gigawatts.

 

 

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