In a huge hit to the Hunter clean energy transition, Origin Energy have announced they’re pulling out of the Hunter Valley Hydrogen Hub.
The state significant development at Kooragang Island led by Origin Future Fuels, was slated to begin construction in mid-2025 and tipped to save more than 52,000 tonnes of greenhouse gas emissions per year.
Origin was making promising progress when they entered a joint development agreement with Orica last year to progress through front-end engineering and design, received NSW government planning approval and were targeting a final investment decision.
The project was also shortlisted under the Australian Government’s Hydrogen Headstart program, having previously secured Commonwealth and New South Wales grant funding program commitments.
The choice to exit the more than $200 million project comes as the hydrogen market is developing more slowly than anticipated and there remain risks, input cost and technology advancements to overcome.
Origin CEO, Frank Calabria says, they’re grateful for the opportunity but are unable to go ahead with the project for a number of reasons.
“We have worked hard to evaluate the investment case for hydrogen and are grateful for the strong government support. We continue to believe hydrogen could play a role in the future energy mix. However, it has become clear that the hydrogen market is developing more slowly than anticipated, and there remain risks and both input cost and technology advancements to overcome. The combination of these factors mean we are unable to see a current pathway to take a final investment decision on the project.
“The decision to exit reflects the prioritisation of capital expenditure towards opportunities closely aligned to Origin’s strategy. Ultimately, we believe investments focussed on renewables and storage can best support the decarbonisation of energy supply and underpin energy security over the near-term.
“Origin has been closely following the global development of hydrogen technology and markets over the past four years and we have evaluated a range of options across several jurisdictions. We acknowledge there will be some disappointment at this decision and are grateful for the opportunity to evaluate the feasibility of this project in conjunction with Orica, and with the support of both federal and state governments, local representatives and the community,” Mr Calabria says.
Origin stated they remain open to exploring commercial options for the site, but intend to cease work on all hydrogen development opportunities.
Image: Origin Energy.