MELBOURNE, Oct. 11 (Reuters) – The green energy unit of Fortescue Metals Group Ltd (FMG.AX) on Monday announced plans to build the world’s largest electrolyzer plant in Queensland, with the aim of relaunching the green hydrogen industry in Australia.
Andrew Forrest, Chairman of Fortescue and Australia’s richest man, has put his weight behind the use of clean hydrogen, made from renewable electricity and water, to reduce emissions greenhouse gases. Read more
The new facility will manufacture specialized equipment such as electrolysers, used in the production of hydrogen, as well as wind turbines, solar photovoltaic cells and long-range electrical wiring for Fortescue Future Industries (FFI) and its customers.
FFI said the first stage of the planned hub will be an electrolyzer plant in Gladstone, 480 km (300 miles) north of Brisbane, producing electrolyzers with a capacity of 2 gigawatts per year, which it says represents more than double the current production in the world.
The world’s largest electrolyzer plant is currently operated by ITM Power in Sheffield, England, with an annual capacity of over 1 GW.
FFI said construction is expected to begin in February 2022, with the first electrolysers, which convert water to hydrogen and oxygen, expected in early 2023. Its initial investment would be $ 83 million, with an investment of up to ‘to $ 650 million, subject to demand.
FFI has said separately that it is studying the possibility of converting the Brisbane ammonia plant of chemicals maker Incitec Pivot (IPL.AX) to run on green hydrogen from natural gas via a plant. electrolysis on site which will produce up to 50,000 tonnes of hydrogen per year.
Overall, FFI said it plans to produce 15 million tonnes of green hydrogen per year by 2030, rising to 50 million tonnes over the next decade for domestic and export markets.
Broker RBC, however, said the manufacturing hub initiative could struggle to generate adequate returns, given the cheaper production of ammonia from fossil fuels and the lack of incentives.
“A high carbon price, tiered pricing and government incentives are needed to ensure that green ammonia production is economical in the medium term,” he said.
Reporting by Melanie Burton; Editing by Richard Pullin
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