InterContinental Energy Outlines Development Plans

InterContinental Energy expects the first phases of its hydrogen and ammonia projects to come on line in the late 2020s-early 2030s, with initial renewable power capacities of 5-8GW.

The company is planning three huge projects — two in Australia and one in Oman — and may explore further projects. They could eventually scale up to 25-50GW of renewable capacity each.

The initial phases could be up to 8GW of renewable power at each site feeding 4GW of electrolysers, and could produce 500,000 t/yr of hydrogen and 3mn t/yr of green ammonia. The 5-8GW range is the "sweet spot" to get the benefits of economy of scale needed to produce hydrogen and ammonia at competitive prices, without outpacing demand, InterContinental Energy's chief commercial officer, Philip Jones, said. The company is targeting final investment decisions in 2026 and first hydrogen production between 2028 and the early 2030s. But the start date and level of supply will ultimately be demand-driven, Jones said.

As no market currently exists, sales will have to be on a long-term basis in order to underwrite financing. The offtake market is still maturing, so it is too early to define specific terms, such as the length of the contracts, Jones said. But the company will be open to optimising its returns on a spot market if it emerges, Jones added.

The majority of hydrogen production will be used to make ammonia for export, where it can be used in co-firing or as a marine fuel. It could also directly replace grey ammonia for existing uses. "If a better vector for transporting hydrogen then ammonia emerges, we can always adapt. But for now, ammonia is the best route for transport," Jones said.

Capacity factors of more than 70pc for the electrolysers can be achieved by optimising the renewable capacity between wind and solar, thanks to strong daytime solar and night-time wind conditions. Higher capacity factors could be achieved by optimising storage mediums between power, hydrogen and ammonia, or by connecting to the grid and exporting excess power. But Jones said it should not be necessary — "if you get the ratio of renewables to electrolyser capacity right, you should not spill too much power". The projects will be behind the meter. If any do connect to a grid, it would only be to supply power rather than buy power, Jones said.

Some sort of certification will be required for the emergence of a global market. The company is backing green hydrogen, which has less risk than other forms of low-carbon hydrogen, as there is no exposure to carbon pricing risk or stricter carbon targets from consumers.

The carbon intensity of hydrogen will be the most important criteria initially, rather than the hydrogen purity. Fuel cell vehicles require very pure hydrogen, but initial volumes for fuel cells will be very low compared with volumes for refining, green steel and direct combustion, where purity is less important, Jones said.

An expanded application to the Australian Environment Protection and Biodiversity Conservation (EPBC) Act for InterContinental Energy's AREH project to include ammonia export was not accepted on environmental grounds, but the project consortium has said it would work with the ministry to address its concerns in future applications. The project retains its major project status from the federal government, the company said.

By Killian Staines