An Australian joint venture between Japanese organisations, J-POWER and Sumitomo Corporation (JPSC JV), has been selected as the preferred hydrogen provider to Japan Suiso Energy (JSE). The project is set to produce 30,000t of clean hydrogen gas per year in Gippsland, Victoria and JSE will liquify the hydrogen for export to Japan.
The Japanese Government’s Green Innovation Fund has committed JPY220 billion – approximately AUD$2.35 billion – to the project, to be delivered via Japan Suiso Energy, (JSE) comprising Kawasaki Heavy Industries and Iwatani Corporation.
This major injection of capital enables JSE to design and build commercial scale facilities to liquefy and ship the hydrogen from Port of Hastings to the Port of Kawasaki in Japan, bringing significant economic benefits to Victoria and Hastings in particular.
J-POWER successfully produced 99.999 per cent pure hydrogen gas, extracted from Latrobe Valley coal, as part of the Hydrogen Energy Supply Chain (HESC) Pilot Project, which achieved a world-first liquid hydrogen supply chain, with the delivery of the hydrogen at the Port of Kobe in Japan in February 2022.
Japan Suiso Energy CEO, Doctor Eiichi Harada, said, “After a decade of working together with the Japanese, Australian, and Victorian Governments, our efforts to establish a world-first clean hydrogen energy supply chain have been rewarded.
“This is truly a watershed moment for our combined efforts to decarbonise global energy production. This commitment of AUD$2.35 billion gives all participants in the hydrogen supply chain the confidence to progress to the next stage of commercialisation.
Dr Harada said it is a complex project and there is still some way to go in terms of approvals, design, construction and commissioning but this is a major boost for the Victorian economy on its journey towards a clean energy future.
“The project will bring new clean energy infrastructure and jobs to the Hastings and Latrobe Valley communities – something we think is very important as we support the people through this period of change, as well as the broader energy sector.”
J-POWER Latrobe Valley Non-Executive Director, Jeremy Stone, said, “We are moving from startup to scale up phase, which is an exciting time for J-POWER and our joint venture partner, Sumitomo Corporation.
“Bringing commercial scale hydrogen production to the Latrobe Valley will act as a catalyst for growth in the broader Gippsland region, as complementary industries such as Ammonia, Fertiliser and Methanol are attracted to the opportunities it presents.
“Gippsland presents a unique opportunity to help reduce global CO2 emissions through the reliable production of large quantities of cost-effective clean hydrogen. Beyond the abundance of natural resources, the area has unrivalled access to a skilled workforce, major energy infrastructure and viable long-term storage for captured CO2 in the Bass Strait.
“Subject to commercial agreements and meeting the required environmental permits and approvals it is expected hydrogen production will commence by late 2020s.”
Mr Stone said building on the success of HESC and J-Power’s 166MW Osaki CoolGen project, it is exciting to be one step closer to making commercial scale hydrogen production in Victoria a reality.
“This is a major milestone and a recognition of Gippsland’s unique ability to help reduce global CO2 emissions through the reliable production of large quantities of cost competitive and clean hydrogen,” Mr Stone said.
The Latrobe Valley hydrogen production facility will benefit from the local skilled workforce, existing energy infrastructure and resources.
The project will take advantage of one of several long-term CO2 storage solutions, including using the depleted oil and gas reservoirs in Bass Strait for the CO2 emissions that cannot be utilised.
The JPSC JV will initially produce between 30,000 to 40,000 tonnes per annum of gaseous clean hydrogen. A future potential production of 225,000 tonnes per annum, would reduce about 1.8 million tonnes per annum of CO2 from being released into the atmosphere (equivalent to the emissions of about 350,000 petrol cars).
Subject to commercial agreements and meeting the required environmental permits and approvals, it is expected hydrogen production will commence in the late 2020s.
Mr Stone said, “There is significant domestic interest in a reliable source of locally produced, cost competitive clean hydrogen. Now we have countries establishing the definition of “clean hydrogen”, based on carbon intensity, we are seeing an opening of trade, based on credible and transparent CO2 reduction numbers, at various price points.
“We are expecting further offtake agreements for hydrogen that can be used by a wide range of businesses and industrial processes, including the production of ammonia, fertiliser and methanol.”
Input from industry
MEU Victorian President, Trevor Williams, welcomes the investment saying the project creates hope and opportunity for working families in the Latrobe Valley, where prior and impending coal-fired power station closures were creating deep anxiety for the region’s future.
“Expanding and commercialising this project helps the Japanese economy’s energy transition, while also building a viable new industry to support the economic transition of the Latrobe Valley.
“We expect that contracts to provide coal to the hydrogen plant will provide full-time, well-paid career pathways for Latrobe Valley coal mine workers and energy workers facing displacement by power station closures.
“Any industry consistent with a low carbon future delivering such good alternative jobs for power workers and coal miners must be supported by any responsible government.”
Modelling has shown the project will generate more than 1,000 jobs a year in the operational phase, with about half in the Latrobe Valley.
Mr Williams said the hydrogen plant was the first real step towards economic diversification of the Latrobe Valley and could open a pathway for producing other carbon-neutral products from Latrobe Valley coal including urea, ammonia and Adblue, supporting Australia’s self-sufficiency in these products.
