Renewable Energy (Production and Distribution) Best Practice in Australia

Renewable Energy (Production and Distribution) Best Practice in Australia

Post submitted by Australia Country Manager Julian Atchison 

The Asian Renewable Energy Hub

The Asian Renewable Energy Hub (AREH) is one of two renewable energy export “mega-projects” currently in development in Australia. The full scope of the project makes for impressive reading; there will be 26GW installed wind and solar generating capacity (with a projected >70% utilization rate on a daily basis) spread over a 6,600km2 site in remote Western Australia. This powers 15GW of electrolysis units which produce hydrogen from water vapor in the air, as well as an integrated series of Haber Bosch ammonia production units that use this hydrogen product and transform it into a stable, safely-transportable molecule – ammonia. In this way, Australian wind and solar energy is captured, stored and shipped in renewable molecules to overseas destinations where it can be used (emissions-free) in a wide variety of applications.

AREH developers also intend the project to set a high standard with regard to relationships with the local community and traditional landowners, as well as the health and wellbeing of the AREH workforce. Off-take agreements for renewable electricity generated at AREH guarantees local industry and a reliable source of clean, cheap power; there’s hope this will lead to the establishment of a local green steel industry. The site may be remote and the land uninhabited, but the AREH does have neighbors and traditional landowners. Engaging locals and Indigenous Australians from day zero of the project helped embed AREH in the community in a way that fossil fuel projects (and many renewable energy projects) don’t properly explore. Finally, the construction of a live-in town for workers will help avoid some of the problems associated with fly-in, fly-out working arrangements.

  1. AREH’s effectiveness in reducing emissions

AREH intends to achieve something new in Australia by using non-grid renewable power to produce molecules for export. Traditionally, ammonia production is via the Haber Bosch process: the combination of hydrogen and nitrogen under extreme temperatures and elevated pressures to produce ammonia. This is an energy and carbon-intensive method that requires huge amounts of electricity and uses carbon-heavy feedstocks (notably hydrogen produced from steam methane reforming). Some of these inefficiencies are addressed at AREH. Haber Bosch units are still used to produce ammonia, but they are powered by renewable electricity. Hydrogen used at AREH is produced from electrolysis or water-splitting: a process that requires only water vapor from the atmosphere and electricity.

AREH’s green ammonia is not intended to displace traditionally-produced, carbon-intensive ammonia, but feed into a growing ammonia energy market. Ammonia end-use is widely anticipated to expand exponentially beyond fertilizers, especially via use as a maritime fuel. While the current costs for producing this green ammonia (and green hydrogen substrate) are currently well above market prices, AREH developers expect green hydrogen at <$1.5/kg and green ammonia at <$350/ton post-2030; both highly are competitive rates.

  1. Scale-up and adoption overseas

AREH is being developed by InterContinental Energy, a Singapore-based company that forecasts the rise of new “green super-giants” in the energy space. Although renewable energy, green hydrogen, and green ammonia are currently prohibitively expensive to produce, building massive-scale installations like the AREH reduces risk and lowers production prices. AREH won’t be the last global green supergiant, with InterContinental and others looking at similar mega-projects in Africa and South America.

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