“World’s largest” and “green hydrogen” are two phrases that are coming together with wanton regularity these days.
Today Green Energy brings you another contender from our sheep-herding cousins across the Tasman, who are not satisfied with just having the best test cricket team in the world.
ASX-listed Meridian Energy (ASX:MEZ) and Contact Energy (ASX:CEN) are on the lookout for partners to develop the … well I think you know already.
As with many of these proposed developments, the Southern Green Hydrogen Hub is relatively scant on detail and big on market projections.
Meridian and Contact commissioned McKinsey and Co. to produce a report to back their “registration of interest” process.
Unsurprisingly it predicts big growth in the global green hydrogen market.
“The report estimates global demand could increase more than sevenfold to 553 million tonnes by 2050,” Meridian and Contact said. “Southland has the potential to be at the forefront of this growth opportunity.”
The trigger point for the investment will be the closure of Rio Tinto and Sumitomo’s aluminium smelter in Southland, which Meridian Energy current supplies out to 2024.
The Manapouri power station would then become the source of renewable energy for the hydrogen plant, which be used to split into hydrogen and oxygen through electrolysis.
Meridian and Contact envisage a 600 megawatt green hydrogen export facility, which would make a one-off addition of up to $800 million to New Zealand’s GDP and the created thousands of jobs in construction, as well as up to $450 million and hundreds of additional jobs on an ongoing basis.
That both this and a $100 billion project proposed for WA’s south coast can stake a claim on the world’s largest title at the same time shows just how far we are from knowing exactly how quickly or to what extent the industry can scale up to meet the hopes of proponents and governments that it will be able to decarbonise heavy industries and back net zero ambitions.
Hydro headaches drive hydrogen ambitions
New Zealand is currently very reliant on hydro generation for renewable energy.
It’s been a dry winter in many parts of the nation, which is one reason Meridian and Contact are so keen to pursue the hydrogen option.
Contact CEO Mike Fuge said a large hydrogen plant can help the country reach 100% renewable energy.
“This can be achieved by reducing hydrogen production when the country’s hydro lakes are running low, allowing electricity to flow back into the national grid to support local homes and businesses,” he said.
“In this mode of operation, green hydrogen could solve up to 40 per cent of New Zealand’s ‘dry year’ problem.
“This flexibility would see hydro generation replace coal and gas-fired generation and reduce carbon emissions.
“Given the low lake levels over the past six months, if this plant had been available this year it could have been used to avoid up to one million tonnes of carbon emissions.”