Fortescue bids to build South Australia hydrogen plant.
Andrew Forrest’s Fortescue Future Industries is understood to have submitted a bid to develop a major green hydrogen project in South Australia as the state government takes decisive action to be a first mover in the rapidly emerging space.
The green fuels arm of Fortescue Metals Group is expected to be among several attracted by South Australia’s plan to earmark $593 million of public funding for a green hydrogen plant. Proposals to build the project had to be submitted by 5pm on Tuesday.
A spokesman for the business told The Australian Financial Review, said:
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FFI believes South Australia has a great opportunity to be a leader in renewable energy production.
“South Australia has an abundance of readily available natural resources for a renewable energy industry, including some of the best wind and solar resources in the country.”
The FFI spokesman said the SA government had been “proactive in setting ambitious but achievable targets for a renewable and green hydrogen industry” that align with FFI’s own mission to help the world step beyond fossil fuels. He declined to comment on whether FFI had lodged a formal expression of interest.
The chief executive of the South Australian government agency overseeing the development of the plant and associated infrastructure at Whyalla said speed of construction is an important criterion because “first-mover” advantage is at stake.
The SA government has set out a deliberately ambitious timetable for construction of the plant which it wants up and running by December 2025, and which would be the largest of its type in the world.
Sam Crafter, the chief executive of Hydrogen Power SA, the government agency looking after the taxpayer-funded project, said on Tuesday that “first-mover advantage” was important in the hydrogen industry. He declined to comment on the number of bidders.
Having the largest hydrogen production and hydrogen power generating facility in the world by December 2025 will maximise being able to capture the economic and supply chain benefits in such a young industry, he said.
The government requested expressions of interest by Tuesday from industry to help deliver a 250-megawatt hydrogen production facility, 200-megawatt hydrogen power plant and a hydrogen storage facility. It would be fuelled by responsible energy and would help manage excess renewables in the system
Sam Crafter, the chief executive of Hydrogen Power SA, said:
It’s really about South Australia being able to gain that first mover advantage.
“We will be a world leader at that scale”. He said there were many hydrogen plants on the drawing board around the world, but none of this scale.
The emerging hydrogen sector is attracting huge interest, but has been slow to get off the ground, partly because of the limited market so far for the fuel, which is expected to be increasingly used in heavy transport and industrial processes to help cut emissions.
The agency will spend the next three months assessing the proposals it has received and expects to announce the successful party by July. Mr Crafter said during a market soundings period early in the process there had been strong interest from European and Asian players, as well as national players.
The hydrogen plant and associated infrastructure is a centrepiece of the economic strategy of SA Premier Peter Malinauskas’ economic strategy. He won the last state election a year ago.
The SA government has identified several sites for the proposed plant near the industrial city of Whyalla, in the north of the state.
Whyalla is best known on the national stage as the location of the Whyalla steelworks, owned by British billionaire Sanjeev Gupta. Mr Gupta bought the steelworks in 2017 after its previous owner Arrium went into administration, but Mr Gupta’s own GFG Alliance global business has faced difficulties as it refinanced about $5 billion in funding which had previously been sourced from the collapsed Greensill Capital.
The SA government process is for the supply, construction and operation of the hydrogen plant and equipment, along with offtake agreements for the “green hydrogen” produced at the facility.
The proposed sites in Whyalla are located within a 15-kilometre radius to the north-east of Whyalla. They include a 238 hectare parcel of land in the Whyalla Industrial Estate and 8.7 hectares in the Cultana Industrial Estate.
The expressions of interest process says alternative sites can also be proposed.
Mr Crafter said a December 2025 finish date was ambitious, but it was deliberately so. He said that having a large-scale plant up and running would maximise supply chain benefits.
Meanwhile, Swiss-based trading house Trafigura, which owns and operates the Hobart zinc smelter and Port Pirie lead and silver smelter in SA via its multinational subsidiary Nyrstar, is examining the potential for a separate hydrogen manufacturing facility in Port Pirie. It is assessing the viability of a potential full-scale plant able to produce 100 tonnes of green hydrogen per day from a 440MW electrolyser.
Fortescue bids to build South Australia hydrogen plant, March 14, 2023
