Australia's Queensland state said today it decided not to provide further funding to the 2.9GW CQ-H2 renewable hydrogen project, because it does "not align" with expectations to provide "affordable, reliable and sustainable power to Queenslanders".
The government recently decided not to provide equity and grant funding of over A$1bn ($618.6mn). The decision has cast doubts over the project's future, with its lead developer — energy firm Stanwell — saying on 3 February that it is "considering" the government's decision and is also reviewing other hydrogen initiatives.
The CQ-H2 consortium — which also includes Japan's Marubeni and Iwatani, as well as Singapore's Keppel — was shortlisted in the first round of Australia's competitive Hydrogen Headstart programme for subsidies from the central government. Winners for this are expected to be announced shortly.
"CQ-H2 has reached a decision point, with additional funding now required," said the Liberal National party (LNP) government. For Stanwell to progress with the plans, "it would have required significantly more than $1 billion in state government funding, including infrastructure for water, port, transmission and hydrogen production," according to Queensland treasurer and energy minister David Janetzki today.
Besides not meeting expectations for power supply to Queenslanders, the project also does not align with the "government's objectives to focus on core financial and operational performance, and to maximise value from existing generation assets for Queenslanders," Janetzki said.
The state would continue to support renewable hydrogen projects in general, Queensland's minister for trade Ros Bates said, noting that it "welcomes commercially viable energy projects from around the world".
The LNP had won the Queensland state election in October, following nine years of rule by the Labor party, which had backed the CQ-H2 project and provided funding for initial engineering studies.
Australia's minister for climate change and energy, Chris Bowen, of the Labor party called the Queensland state government's decision "surprising and disappointing given this project creates nearly 9,000 jobs and was expected to generate $8.9bn for the local economy".
Australia's Liberal party has repeatedly attacked the Labor government over its strong focus on renewable hydrogen. A change in government on a national level, following a general election later this year, could result in a change of course for hydrogen.
