BP’s renewables chief said the Asian Renewable Energy Hub (AREH) green hydrogen mega-project needed a lead partner with the oil supermajor’s scale and experience to take it forward – and told the industry to “stay tuned” for further similar deals.
“We are working on a couple more of these. Stay tuned, there is more to come,” Anja-Isabel Dotzenrath, the global energy giant’s executive vice president for gas & low carbon energy, told Recharge after it agreed to become the largest shareholder and operator of the $36bn AREH planned in Western Australia.
The AREH – one of the largest green hydrogen projects in the world at up to 26GW of wind and solar generation across 6,500 sq km – aims to supply power and renewable H2 for the energy-intensive mining sector in the Pilbara region and later underpin massive green ammonia exports to Asia.
BP paid an undisclosed sum for a 40.5% stake, joining former lead developer Intercontinental Energy, CWP Global and Macquarie in the giant project.
The AREH has been on the blocks for almost 10 years, starting life with a plan to export green power via an undersea cable to Indonesia before pivoting to focus on green fuels.
To get it moving into full-scale development needed an operator “with really extensive experience in construction and operation at this scale in a very remote location”, said Dotzenrath.
“You need someone as an operator with the ability to process molecules and manage all the related process safety aspects.”
BP’s vast global experience of fuel offtake and trading would also be crucial, Dotzenrath added. She also claimed the project would benefit from “bringing someone in as an operator that is credible, that has a track record as a good local citizen” with a focus on local content, and can work with community stakeholders and government bodies.
Three-phase approach
The AREH will be taken forward in three phases to tap Pilbara's ultra-keen wind and solar resources, said Dotzenrath.
Phase one of about 4GW of wind and solar will be geared around renewable power production to supply regional mining operations. Phase two with about 6GW of power will be the first to produce green hydrogen, again for local mining decarbonisation, while the final third phase will seek to add massive capacity for green ammonia production and export.
Before BP’s involvement the project partners earmarked 2027 for a likely start of operations, but Dotzenrath declined to comment on when the first phase could be up and running.
She also said that the “orders of magnitude larger” scale of the AREH – which will need around 14GW of electrolysers as well as 26GW of wind and solar generation kit – would require a “strategic” relationship with the supply chain. “You cannot just issue an RFP [request for proposal] for that,” said Dotzenrath, flagging “a different approach committing to volume and a strategic approach to a [supply chain] market that is very constrained”.
Global wind giant Vestas previously held a small stake in the project but is not listed in the new shareholder structure cited by BP after its deal.
Asked if Vestas is still involved in the project as a supplier, Dotzenrath said: “We’ll see, it’s not decided yet”. Vestas has been approached for comment over its role in the AREH.
Planning concerns
The AREH has faced several bumps in the road on its planning journey, most notably in June last year when Australia’s environment minister deemed it “clearly unacceptable” in terms of its impact on migratory birds.
Dotzenrath told Recharge: “There are environmental aspects which we absolutely need to address”, adding that BP and the other stakeholders are “working on a revised proposal to address the concerns which have been raised”.
A range of potential solutions such as curtailing wind turbines during migration periods are being looked at. “It’s work in progress, [and] requires a very strong collaboration with government and regulatory bodies,” she added.
