PERTH (miningweekly.com) – Energy major BP Australia has been awarded A$1.71-million in funding from the Australian Renewable Energy Agency (ARENA) to assess the feasibility of building a renewable hydrogen and ammonia production facility in Geraldton, Western Australia.

BP is undertaking a A$4.42-million feasibility study to investigate producing renewable hydrogen using electrolysis. Under the study, BP would use grid-connected power and procure renewable electricity through a power purchase agreement (PPA).

Renewable hydrogen would then be used instead of natural gas to produce renewable ammonia. 

The study will generate findings to better understand the technical and financial implications of a fully integrated renewable hydrogen supply chain, BP said on Friday. Furthermore, it will analyse the economic opportunity presented by renewable hydrogen and determine how it can be scaled-up to satisfy future demand.

BP’s concept aims to produce approximately 20 000 t of renewable ammonia from the facility per year for domestic use. It will also pursue export opportunities by leveraging existing trade relationships.

BP selected Geraldton as the preferred location for the project owing, in part, to its vast solar and wind resources, existing port infrastructure and proximity to large, long-term Asian markets. 

Federal Energy and Emissions Reduction Minister Angus Taylor said that the study would allow the government and ARENA to better understand the economic opportunity and technical implications of a fully integrated renewable hydrogen supply chain. 

“This project will build on the strong ammonia production industry that already exists in Western Australia. Utilising renewable hydrogen provides a fantastic opportunity for this industry to reduce emissions and sell a clean, in-demand product to global buyers,” Taylor said. 

“If proven to be feasible, this project will help the government to achieve our goal of producing hydrogen at a competitive price and have a positive impact on global emissions.”

ARENA CEO Darren Miller said renewable hydrogen represents a significant future economic opportunity for Australia.

“Australia is a key market for BP and other companies to progress their strategic developments for the future renewable hydrogen industry because of our abundant renewable energy resources and established trade partners.

“This study presents an important opportunity to support heavy industry to reduce its emissions. Early investments in feasibility studies like this will help us to realise the opportunity that renewable hydrogen represents and will ultimately help us to achieve our goal of producing renewable hydrogen and ammonia at a competitive price.” Miller said.

BP Asia Pacific COO Frédéric Baudry said that BP believed ‘green’ hydrogen, produced using renewable energy, would play an increasingly important role, particularly in parts of the world with high renewable energy potential, such as Western Australia.

ARENA has committed over A$55-million towards hydrogen initiatives so far, including over A$22-million to research and development projects, and almost A$28-million to demonstration, feasibility and pilot projects.

ARENA announced in November 2019 that it would commit up to A$70-million in funding to a Hydrogen Deployment Competitive Funding Round in 2020.