BRISTOL SPRINGS DEVELOPMENT
STAGE ONE GREEN HYDROGEN
4.4Mkg pa
LOW COST OPERATION
ONE OF AUSTRALIA’S LOWEST COST GREEN HYDROGEN PROJECTS
WORLD CLASS EXISTING INFRASTRUCTURE
GRID CONNECTION, PORTS, ROADS, WORKFORCE
EXPANSION POTENTIAL
+500MW
DEVELOPMENT
The Bristol Springs Green Hydrogen Project is located in the South West region of Western Australia approximately 120km from Perth and 8km from the town of Waroona. The Company engaged Xodus Group (Xodus) to undertake the Study to assess the opportunity to develop a green hydrogen production facility based on a 114MW solar farm (Stage One). As part of this process, Xodus and consultants EPC Technologies, investigated maximum energy yield from solar and costs for the Project. The key inputs and outputs from the Study are highlighted below.
Table 1: Key Production and Costing Assumptions
1 – Operating costs (Power sales/purchases) = Power purchased from the grid (during off peak) – Excess power sales (on the grid) – Capacity Credits – Large Generation Certificates). All assumptions regarding each sub cost are outlined in this Study
2 – Excludes Financing, depreciation and corporate costs
3 – Replacement Stack required after 90,000 hours. Replacement of solar panels are inclusive within Operating Costs – Solar
From the Study, it was found that the Project would produce approximately 4.4 million kilograms of hydrogen per annum. Based on the key inputs this would result in a total cost of approximately $2.83 per kilogram of hydrogen produced. The breakdown of the key inputs is illustrated in the image below.
Image 1: Forecast costs per kilogram of hydrogen produced (A$ / kg)
The key highlight of the Study is the low cost for hydrogen production. This low cost is due to the Project’s location being surrounded by existing infrastructure, which lowers the capital cost, whilst also allowing for additional income to be generated (through excess energy sales and Reserve Capacity Credits through the connection to the SWIS at the Landwehr Terminal.
Whilst there is limited publicly available information regarding other green hydrogen projects in Australia, due to the infancy of the sector as well as the majority of other projects being owned privately, numerous industry experts have commented on costs for the industry.
This includes the Australian Renewable Energy Agency (ARENA) which has forecast the cost of producing green hydrogen in Australia to be between $6 to $9 per kg based on current electrolyser and renewable energy costs.
This costing guidance is supported by the International Energy Agency (IEA) in their Global Hydrogen Review , that has similar current costing estimates as highlighted in Image 2 below.
Image 2: Levelised cost of hydrogen production by technology in 2020, and in the Net zero Emissions Scenario, 2030 and 2050 (Source IEA: Global Hydrogen Review 2021)
In addition to the strong result of the Study, several areas have been identified that have the potential to improve the Project’s returns and that will be addressed in future studies. These include:
- Expansion Study – A number of the key costs for the hydrogen plant are based on the scalability of the plant, therefore achieving a lower overall unit cost through scale economies.
- Behind-the-meter (BTM) – Sales of power via a power purchase agreement (PPA) enables the Project to retail excess power cheaper than the grid by avoiding transmission, distribution, and market operator charges. The Company has commenced discussions with various parties regarding this possibility.
- Reduction in water costs – The availability of multiple, existing water sources will enable the Company to continue to assess the optimal solution from either existing water schemes or new bore(s) to extract water from the existing aquifer.
- BTM power supply – Similar to BTM sales of power, BTM supply of power will be cheaper due to the avoidance of transmission, distribution, and market operator charges. The Company has commenced assessing these options.
- Oxygen Offtake – The current hydrogen plant design assumes that all oxygen produced in the process will be vented to atmosphere. The volume of oxygen production is significant. Oxygen can provide an additional revenue stream for the hydrogen plant given there is local demand for oxygen offtake. The Company will continue to assess this in the future. Stage One generates approximately 43Mkg of oxygen per annum.