Is there any light at the end of the hydrogen tunnel? Or, is it a pipe dream?
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Fortescue has allowed a key deadline to buy green energy for its stalled Gibson Island hydrogen plant to lapse, as renewable energy company Genex says it is talking to other potential buyers for energy from its proposed Bulli Creek solar farm.
The lapse throws fresh doubt over the viability of the Gibson Island project, once the flagship of Fortescue’s proposed hydrogen production centres in Australia, but which the company has seemingly set aside as it struggles to find returns at Australian power prices.
The failure of Fortescue to meet a twice-extended March 31 deadline to make a final investment decision on building a hydrogen production plant at Incitec Pivot’s former Queensland fertiliser plant also has Genex scrambling to find a replacement to anchor the generation hub’s construction.
The Andrew Forrest-led company signed a deal with Genex for up to 337.5 megawatts of annual capacity from the proposed 2GW solar farm in October 2023. The deal was to underpin the first 450MW stage of the solar farm’s construction, allowing Genex to look for additional contracts to upsize its construction to 775MW and target an eventual 2GW of solar and battery capacity.
But, despite long having flagged plans to make a final investment decision by the end of 2023 – along with partner Incitec Pivot – Fortescue dropped Gibson Island from its top priority list only six weeks after signing on with Genex,
saying it was still working on front-end engineering and design studies “as Australia struggles to shed its petrostate status and still suffers structurally high green electricity costs”.
In December, Genex extended Fortescue’s deadline to make a final investment decision until the end of February, then tacked on an additional month.
That deadline has also lapsed and, while Genex said on Tuesday a path was still open for Fortescue to buy power from the proposed 5000ha solar farm, the company also flagged talks with alternative buyers for the energy.
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