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Newcastle is a step closer to becoming a hydrogen hub following a federal government commitment of $70 million.
Key points:
- The facility is expected to produce 5,500 tonnes of renewable hydrogen each year
- Explosives manufacturing company Orica will use most of the hydrogen to make its Hunter facility emission-free
- Construction is targeted to begin in 2025 with operations expected to commence in 2026
The hub will be constructed at Kooragang Island near the Port of Newcastle.
Climate Change and Energy Minister Chris Bowen visited the site on Thursday, announcing the funding for a 55-megawatt hydrogen electrolyser, which would split water into hydrogen and oxygen.
"The Hunter [region] has powered Australia for many generations," he said.
"It will power Australia for many generations to come, just that power will change."
The hub is expected to produce 5,500 tonnes of hydrogen each year and create about 100 jobs.
"This is a collaboration which will see Newcastle and Hunter amongst the first cities in the world to be producing commercial quantities of green hydrogen," Mr Bowen said.
"Today, we're announcing that Newcastle will be the first hydrogen hub in Australia."
Origin Energy has partnered with explosive manufacturing company Orica to deliver the Hunter Valley hydrogen hub.
Orica chief executive Sanjeev Gandhi said most of the hydrogen would be used at the company's ammonia and ammonium nitrate facility on Kooragang Island to help make their products emission-free.
"This particular site is one of the largest consumers of gas in New South Wales," he said.
"So we intend to take a portion of the green hydrogen and replace the gas demand on the site, and the rest will be given to Origin Energy partners to go into the transport sector.
"As the demand continues to pick up, we'll continue to scale that capacity up."
Mr Bowen said renewable hydrogen was an essential part of Australia's renewable energy transformation.
"Newcastle and the Hunter Region have been industrial and economic powerhouses for decades, making the Port of Newcastle an ideal location for a renewable hydrogen hub," he said.
Pathway to exports
Mr Bowen said the project also aimed to establish a pathway to export renewable hydrogen.
"This project is the next step towards using locally produced renewable hydrogen in Australia to reduce our industrial emissions and develop a renewable export future," Mr Bowen said.
The announcement comes a day after Mr Bowen announced the Hunter coast would home the country's next offshore wind zone, which was also slated to increase jobs and help the region transition to renewable energy.
Construction of the hydrogen hub is targeted to begin in 2025 with operations expected to commence in 2026.