Hydrogen plant for Southland in the future?

Friday, 11 December 2020

A hydrogen plant in Southland may replace the aluminium smelter that is scheduled to close in August 2021.

Meridian and Contact will spend $2 million on a feasibility study to investigate the potential of a large scale renewable hydrogen production plant in Southland.

Contact chief executive officer Mike Fuge said the hydrogen production, export and dry year reserve study would be undertaken after unprecedented international interest has emerged.

“There is substantial interest from parties seeking to take advantage of New Zealand’s renewable energy opportunity following the announced closure of the Tiwai Point aluminium smelter.”

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A new $2m feasibility study will into the possibility of a new hydrogen plant in New Zealand that could be located in Southland, specifically at the site where Tiwai aluminium smelter is. The smelter is scheduled to close in August 2021.

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Meridian chief executive Neal Barclay said a major hydrogen plant in Southland could ensure the region’s next big industry is renewable energy in the form of green hydrogen, and a large‐scale local plant also opened decarbonisation possibilities for domestic hydrogen‐powered industries such as heavy transport.

'We’re looking forward to working together with Great South and the local councils on this opportunity.”

Drawing on expertise from New Zealand and around the world, the study will investigate the export potential, value chain, policy approaches, technical requirements, environmental considerations and practical issues of green hydrogen production.”

It will also examine the potential dry year reserve opportunity.

Hydrogen could give New Zealand a superior, low‐cost alternative for balancing supply and demand in dry years, Barclay said.

“It could provide a large amount of New Zealand’s dry year reserve at a fraction of the cost of building new power stations. Having a large amount of demand with the flexibility to turn it down or turn off during a dry year could add a huge benefit to New Zealand in managing the security of our energy supply.'

There was the potential for a new clean, green hydrogen industry to replace the outgoing aluminium industry, Fuge said.

“We suspect there are some fantastic economic and decarbonisation benefits to unlock for Southland and New Zealand, not only on the export front but also in providing a foundational investment for domestic hydrogen opportunities too.”

Great South chief executive officer Graham Budd said he was delighted to hear about plans to investigate a renewable hydrogen production facility in Southland.

“Great South were founding members of the NZ Hydrogen Association and our GM Strategic Projects Steve Canny is the current association chair, so we’ve been actively interested in this opportunity for Southland for a long time.

“We’re delighted to see positive outcomes from the government’s Green Hydrogen Strategy being played out in industry and Great South will be very pleased to support this investigation and assist in the delivery of new opportunities for Southland.”

Canny said fuel independence was an important consideration given the likely fuel shortages in the future.

”In many ways, an opportunity such as this does provide high-value jobs, highly skilled jobs that will service New Zealand’s needs, but also service the growing international demand for the fuel.”

The location of the plant played an important part as there needed to be access to water, domestic transport routes, and road, rail and port facilities, he said.

”In distributing hydrogen efficiently, you have to have a transport technology that allows you to compress or liquify [hydrogen] or have the right transport medium, and that’s a big opportunity in itself.”

Canny believed there would be a lot of people in New Zealand who did not know a lot about hydrogen as a fuel.

Gore District Mayor Tracy Hicks said the hydrogen announcement was positive.

A good thing to come out of the discussions around the closure of the Tiwai aluminium plant was that ideas had been promoted for the potential use of power coming from the Manapouri station, Hicks said.

“I think there are some wonderful opportunities for Southland for the future, and it’s green opportunities. Hydrogen seems to be the one where there is the most focus on. From what I’ve seen so far it’s going to be one of the key transport fuels for the future.”

The feasibility study is expected to be completed in the second half of 2021.