The Western Green Energy Hub is a “nation-building” project – but will it work?

At 15,000 square kilometres, the size of the recently proposed Western Green Energy Hub in Western Australia is hard to fathom.

That’s half the size of Belgium – larger than the area of Greater Sydney.

If the plan goes ahead it will be the largest renewable energy hub in the world, with solar and wind turbines producing enough power to create 3.5 million tonnes of green hydrogen and 20 million tonnes of green ammonia a year.

“Australia is a large supplier of fossil fuels,” he says. “We could also be a large supplier of zero carbon energies with hydrogen as a carrier.”

The output from the hub would be scaled up in stages, with the first green hydrogen and ammonia to be produced by 2030.

Ariel Liebman, director of the Monash Energy Institute, says projects of this size and scale were traditionally the domain of governments, but have now moved to private industry.

“We are in a challenging situation where [projects like this] are left to the market and the market doesn’t like much risk,” he says. “These nation-building projects used to be done by governments to de-risk them – think Snowy Hydro.”

For a project this big and this ambitious there is certainly a lot of risk. And a lot of investors’ money is needed as well. The price tag for the project, backed by a consortium including InterContinental Energy and CWP Global, sits at an eye-watering $100 billion.

The project sits on Native Title land on the edge of the Nullarbor Plain; the Mirning Traditional Lands Aboriginal Corporation will also have a stake in the project through Mirning Green Energy Limited. The proposed location – bordered to the north by the Trans-Australian Railway and at its southernmost by the Great Australian Bight coast – stretches west from near the South Australia border for more than 200km and is about 125km north-south at its deepest point.

The project is only in its early planning stages and there no guarantees it will get up. A recent proposal for the Asian Renewable Energy Hub in the Pilbara region of Western Australia was rejected by the federal environment minister last month due to “unacceptable” impacts on the environment.

But the portents thus far are good for the Western Green Energy Hub (WGEH).

Professor Peter Newman from the Curtin University Sustainability Policy Institute says the location of the project is ideal for the generation of the large-scale renewable energy needed to produce that much green hydrogen and ammonia.

“It certainly has the best wind. It’s on the edge of the coast, which is ideal – that’s been shown in wind maps,” he says. “And it’s clearly got a lot of space on land that doesn’t need to be cleared, something that would make a lot of solar work.”

“These nation-building projects used to be done by governments to de-risk them – think Snowy Hydro.”

There will be some domestic market for the green hydrogen being produced as Australia moves towards a de-carbonised economy. The processing of iron ore to make steel, for example, will likely move to using hydrogen in the future. The fuel for heavy transport and agricultural fertiliser production can also feed off the resources produced at the energy hub.

But Liebman says a project of this size will definitely need international buyers for the green hydrogen to make it financially viable, as the Australian market just won’t be big enough to sustain it.

“The demand isn’t there yet,” he says. “It’s a long project so you have to build it in advance of that demand materialising.”

The director of the Australian National University’s Centre for Climate and Energy Policy, Frank Jotzo, says that demand will come from developed countries in Asia as well as Europe.

“A project of this size will need international buyers for the green hydrogen to make it financially viable.”

“Germany, Japan and to an extent Korea are all interested in establishing hydrogen-based energy and industrial systems in their countries and anticipate they will be importing hydrogen for these purposes,” he says.

Jotzo says it’s important to differentiate between the two different types of hydrogen – green hydrogen created from renewable energy, like the proposed WA hub, and hydrogen produced from coal and gas, which still creates high levels of emissions at the source of production.

At the moment, producing hydrogen from fossil fuels remains the cheaper option, he says, but rapid changes in technology meant the price of producing green hydrogen was rapidly decreasing.

“There is every prospect green hydrogen will be cheaper than fossil fuel-produced hydrogen in a decade’s time, perhaps sooner.”

“According to work we have done, there is every prospect green hydrogen will be cheaper than fossil fuel-produced hydrogen in a decade’s time, perhaps sooner,” Jotzo says.

And that economic picture gets even rosier for green hydrogen if in the future there are strong federal government policies in place to support a further decarbonisation of the Australian economy.

“A firm and clear net-zero commitment from the Australian government will help establish a zero-emissions hydrogen industry as distinct from a hydrogen industry that is based on fossil fuels,” Jotzo says.

“What’s needed is facilitation by government – it doesn’t need to be subsidised in any way. What’s needed is a positive stance from federal and state governments towards a zero-emissions energy export industry.

“That means governments having an open mind towards permitting, working with companies, and working with Indigenous communities to produce this in a way that is beneficial to First Nations people. It’s not like billions of dollars in taxpayer-funded subsidies are needed – we just need governments to take a supportive stance.”

Jotzo says the federal government was currently more supportive of fossil fuel-based hydrogen production and export rather than green hydrogen production.

“It doesn’t need to be subsidised in any way. What’s needed is a positive stance from federal and state governments.”

“Australia is a large supplier of fossil fuels,” he says. “We could also be a large supplier of zero carbon energies with hydrogen as a carrier.”

Australia isn’t the only country looking to tap into the global marketplace for green hydrogen, Jotzo says, and if the government made it too difficult for projects like this one to succeed, Australia wouldn’t be able to capitalise on the global market.

“There are preparations for other large-scale commercially based projects in places like Chile and northern Africa and elsewhere in the world, where similar conducive conditions exist with large-scale wind and solar sources, and land and port access to transport the hydrogen,” Jotzo says.

“It is a race to establish a strong market position in these new emerging markets.”