What is the Renewable Hydrogen Deployment Funding?
The ARENA’s Renewable Hydrogen Deployment Funding round is an initiative to support the deployment of new large-scale electrolysers, that produce hydrogen from water using electricity.
The Australian Renewable Energy Agency has opened a new $70 million hydrogen funding round for applications that the agency hopes will fast track the establishment of a globally competitive hydrogen industry in Australia.
The Renewable Hydrogen Deployment Funding Round follows the release of the National Hydrogen Strategy in late 2019 and is in line with the Australian Government’s focus on growing an innovative, safe and competitive hydrogen industry in Australia.
The Renewable Hydrogen Deployment Funding Round – Funding Announcement details the process that will be used by ARENA under the Advancing Renewables Program (ARP). The Renewable Hydrogen Deployment Funding Round is a Competitive Process as defined in the ARP Guidelines, and clauses 4.27 to 4.32 apply. The Funding Announcement should be read in conjunction with the ARP Guidelines (which apply to the Funding Round).
The key objectives of the Renewable Hydrogen Deployment Funding Round are to:
- Demonstrate electrolysis and associated renewable hydrogen technologies at scale.
- Facilitate a pathway to technical and commercial viability of renewable hydrogen in Australia.
- Provide price discovery and transparency in relation to the current and projected economics for renewable hydrogen technologies.
ARENA has allocated $70 million for the Funding Round. ARENA intends to provide grant funding for at least two projects as part of the Funding Round.
ARENA may allocate an amount of funding that is less than the Total Funding Allocation, or fund fewer than two projects, if:
- the Proposals received are not considered to be of sufficient merit to support an offer of ARENA funding
- it is not possible to support all high merit projects within the Total Funding Allocation.
At its discretion, ARENA may also allocate an amount of funding greater than the Total Funding Allocation if it considers this to represent value for money and if ARENA has sufficient available remaining funding.
The Renewable Hydrogen Deployment Funding Round is open to Proposals that demonstrate the production of hydrogen via electrolysis. Proposals for projects must comply with the following parameters:
- Projects must include a new-build electrolyser for the production of renewable hydrogen in Australia. The project may utilise existing energy generation infrastructure or hydrogen end use infrastructure.
- Projects must meet or exceed the minimum electrolyser size of 5 MW (at the DC capacity warranted by the manufacturer) with preference
given to projects with an electrolyser size greater than 10 MW. There is no maximum size limit.
- Projects must be for a single site location in Australia.
- Projects must have a valid commercial case for the production and use of hydrogen.
- Hydrogen production must be 100 per cent powered by either:
- on-site renewable electricity generation
- retirement of Renewable Energy Certificates (RECs) or equivalent certificate
- contracted electricity derived from a renewable Power Purchase Agreements (PPA)
- or a combination of the above.
- The Applicant must present a credible commercialisation pathway (cost reduction pathway) for hydrogen production.
A project is required to involve the deployment of a new-build electrolyser that satisfies the above conditions as part of either a brownfield or greenfield project for the production of renewable hydrogen. The project may include upstream and downstream processing activities, however, as ARENA funding is intended to support the electrolyser and balance of plant components and these aspects must be clearly identified in the Proposal.
Projects that do not fit within these parameters will not be assessed as high merit under the Funding Round.
Applicants under this Funding Round are required to meet all eligibility criteria as outlined in the ARP Guidelines.
Applications close 26 May 2020.
ARENA has announced 36 expressions of interest through a $70 million hydrogen deployment funding round that opened in April.
The funding is being offered to two or more shovel-ready hydrogen electrolysis projects that will produce renewable hydrogen at scale.
In line with the recently released Technology Investment Roadmap and the National Hydrogen Strategy released last year, the funding supports efforts to bring the cost of renewable hydrogen production below $2 per kilogram to be cost competitive with hydrogen generated from fossil fuels.
To be eligible, applicants are required to deploy electrolysers powered by electricity from renewable sources, with a minimum capacity of 5 MW and preference for 10 MW or more.
Collectively the 36 applications received have more than 500 MW of electrolysis capacity. Projects range in size from 5 MW to approximately 80 MW and will seek to produce hydrogen for a wide range of end uses across a number of industries.
Applications have been received from every Australian state and territory, with more than $1 billion in grant requests and $3 billion in combined project value, when accounting for private sector investment.
Each EOI application will now be assessed and shortlisted projects will be invited to submit a full application with the aim of awarding funding by the end of 2020. Successful projects will aim to reach financial close and begin construction in 2021.