The $36bn Asian Renewable Energy Hub (AREH) – one of the world’s biggest green energy projects – suffered a blow after the Australian government rejected on environmental grounds its plans for massive production and export of renewable fuels.
The decision, the basis of which was immediately questioned by renewables advocates, is a potential setback to one of the flagships of global efforts to scale-up green hydrogen production and drive down costs in the sector.
Environment minister Sussan Ley said proposals by the AREH – which aims to link 26GW of wind and solar to 14GW of electrolysers to produce green hydrogen and ammonia – were “clearly unacceptable” given potential impacts on migratory birds and wetlands in Western Australia.
The AREH, being advanced by a consortium including developer InterContinental Energy, CWP Energy Asia, Vestas, Macquarie, was given fast-track status by the Australian government only last year and has received state environmental approvals.
The problem is apparently connected with changes proposed to the plan after it was decided to refocus it from its original remit of power production and instead concentrate on green fuels, with an intention to begin “oil & gas scale” exports of green hydrogen and ammonia made using 16GW of onshore wind and 10GW of solar, built in phases with first production from 2027.
'Work to understand concerns'
The AREH consortium said it received notice last week that an environmental referral for the project will not proceed in its current form.
“We are now working to understand the minister’s concerns, and will engage further with the minister and her department as we continue to work on the detailed design and engineering aspects of the project,” it said.
Australia’s Clean Energy Council, the nation’s main renewables lobbying group, said in a statement: “It is the Clean Energy Council’s understanding that the federal minister for the environment has rejected the expanded proposal for this project prior to the completion of detailed environmental studies.
“The Clean Energy Council is seeking urgent clarification from the minister to address the perception that this decision is inconsistent with well-established processes or with the treatment of non-renewable projects.”
The AREH, which sits near the top of Recharge’s list of world’s largest green hydrogen projects, is among a clutch of initiatives globally to deliver renewable fuels at the massive scale many believe are needed to make them competitive with fossil-based alternatives.
The consortium partners have said they are already in discussions with customers including power producers looking to burn hydrogen as an alternative to gas, and the shipping sector where ammonia is seen as a promising alternative fuel.
Co-developer InterContinental is also working on an equally ambitious project in Oman.