Taxpayers may need to prop up massive $15 billion hydrogen project in central Queensland
Stanwell’s hydrogen project was technically feasible and potentially commercially viable but would cost $15 billion and would need Government support, the project’s feasibility study has found.
An artist impression of the Stanwell project
The central Queensland venture, known as CQ-H2, currently has the backing of Iwatani, Kawasaki heavy Industries, Kansai Electric, Marubeni and APA Group and was expected to deliver about $17 billion in hydrogen exports and $12.4 billion to the state’s economy over its 30-year life.
The feasibility study for the project put the cost of the hydrogen plant at $3.9 billion for phase one and an additional $11.5 billion for phase two. The total capital spending across both phases is estimated at $15.5 billion.
The study estimated the delivered cost of hydrogen to Japan in 2031 would be $6.74/kg under the optimised case, $5.99/kg under the stretch case.
The project is exploring several ways to minimise water requirements, including sea water cooling and desalination.
Stanwell said it had about 1300 megawatts of renewable energy to support the project and there were potential deals it was progressing solar and wind farms. It would also need a “raw water” supply from a desalinator.
A decision on whether to proceed with the project would need approvals from the various partner boards.
The consortium had set a production target of 100 tonnes per day of hydrogen by 2026 and scaling up to 800 tonnes per day in 2031.
It adds to a host of hydrogen related projects in the early stages of development in the state. Glencore has a pre-feasibility study underway for a blue hydrogen scheme at its massive Wandoan coal resource in the Surat Basin.
Fortescue Future Industries is also part of a project to create a north Queensland energy hub near Townsville that would include green hydrogen. CS Energy also has a consortium investigating a project.
A final investment decision on the Stanwell project was expected in the third quarter of 2023.
Stanwell chief executive Michael O’Rourke said the final arrangements for FEED were being locked in.
“The FEED study, once commenced will provide the detailed required to support a financial investment decision,” he said.
“With high-calibre expertise across the supply chain, including potential offtake partners, the project is on track for first hydrogen production in 2027.”
