New Zealand utilities eye green hydrogen export plant

New Zealand utilities Meridian Energy and Contact Energy are jointly studying the development of a green hydrogen export facility at Southland on New Zealand's South Island using electrolysers powered by 600MW of renewable energy. Production is to start after the 2024 closure of New Zealand Aluminium Smelters (NZAS) at the site.

The development of a hydrogen facility at Southland could address the issue New Zealand utilities would face after the closure of the country's only aluminum smelter, which accounts for 13pc of the country's power demand and is supplied by the 850MW Manapouri hydropower station operated by Contact Energy. Contact previously said the smelter closure could push up electricity costs and lead to a shutdown of the 377MW Taranaki combined-cycle gas-fired power plant.

The project is known as the Southern Green Hydrogen project and is in the feasibility stage, with two reports providing more details on it to be released before the end of the year.

Modelling of landed green hydrogen costs in Japan shows that by 2025, New Zealand could achieve NZ$6.60-8.60/kg ($4.59-5.98/kg) for green hydrogen and NZ$880-1,050/t for green ammonia, global consultancy firm McKinsey said in a report commissioned by Meridian and Contact.

At these prices New Zealand's exports could be competitive with locally produced green hydrogen and imported green and blue ammonia from Australia and Saudi Arabia respectively, it said. New Zealand could achieve landed costs of NZ$5-6.60/kg for green hydrogen and NZ$800-830/t for green ammonia in 2030, the report said.

It is unclear at this stage whether ammonia or liquid hydrogen will be the preferred energy carrier for the decarbonisation of hard-to-abate sectors, the report said. Ammonia's advantages over hydrogen are that it carries more energy in volume terms whereby a litre of ammonia carries 50pc more energy than a litre of liquid hydrogen, or 2.8 times that of compressed hydrogen, it said.

The main attraction of hydrogen over ammonia is that it offers more versatility in its range of end-use applications, the report said.

By Kevin Morrison