Origin Energy has announced its intention to exit its potential hydrogen development project in the Hunter Valley, the Hunter Valley Hydrogen Hub (HVHH).
Origin CEO Frank Calabria said, “We have worked hard to evaluate the investment case for hydrogen and are grateful for the strong government support. We continue to believe hydrogen could play a role in the future energy mix.
“However, it has become clear that the hydrogen market is developing more slowly than anticipated, and there remain risks and both input cost and technology advancements to overcome. The combination of these factors mean we are unable to see a current pathway to take a final investment decision on the project.
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“The decision to exit reflects the prioritisation of capital expenditure towards opportunities closely aligned to Origin’s strategy. Ultimately, we believe investments focused on renewables and storage can best support the decarbonisation of energy supply and underpin energy security over the near-term.
“Origin has been closely following the global development of hydrogen technology and markets over the past four years and we have evaluated a range of options across several jurisdictions.
“We acknowledge there will be some disappointment at this decision and are grateful for the opportunity to evaluate the feasibility of this project in conjunction with Orica, and with the support of both federal and state governments, local representatives and the community,” Calabria said.
Origin announced plans for a potential hydrogen hub on Kooragang Island in early 2022 with the hydrogen produced intended to progressively displace natural gas as a feedstock in nearby ammonia manufacturing as well as activate mobility and other use cases.
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Origin entered into a joint development agreement with Orica in July 2023 to progress through front-end engineering and design, received NSW government planning approval and was targeting a final investment decision.
The project was shortlisted under the Australian Government’s Hydrogen Headstart program, having previously secured Commonwealth and New South Wales grant funding program commitments.
Origin remains open to exploring commercial options for the HVHH. In addition, Origin intends to cease work on all hydrogen development opportunities.