The AGL Energy Limited (ASX: AGL) share price is down around 0.5% amid news of progress on the hydrogen hub with Fortescue Metals Group Limited (ASX: FMG).
The two ASX companies are working together to try to get a hydrogen hub up and running in NSW.
AGL and Fortescue are trying to get partners involved to make the hydrogen plans a reality.
According to reporting by The Australian, AGL has managed to bring some key Japanese partners on board. They have also brought on board a local energy giant.
Image source: Getty Images
Japanese energy giants
The newspaper reported that two of Japan's largest energy companies, Inpex Corporation and Osaka Gas have joined an expanded feasibility study that is looking at creating a green hydrogen and ammonia hub at AGL's Hunter Energy Hub. The plans are for a facility of up to 2GW at the site.
The local player is APA Group (ASX: APA), the owner of a large national pipeline. Distributor Jemma is also reportedly becoming a partner.
Each partner is looking at a different area of the project. The Japanese businesses want to know if cost-competitive green hydrogen is feasible. APA is reportedly thinking about renewable options and a transmission pipeline. Jemma will focus on "blending the fuel into its gas network".
The hub's location will be where the Liddell coal plant currently is. Lidell is due to close in the next few months. The nearby Bayswater power station is due to close by 2035.
Green plans
Fortescue Future Industries (FFI) and AGL announced in December that they were going to repurpose the infrastructure at these coal power plants to generate green hydrogen. On the day of the announcement, the AGL share price climbed 1.1%.
Liddell and Bayswater power stations account for more than 40% of NSW's carbon dioxide emissions. NSW has a goal of halving its emissions by 2030.
Power for the electrolyser will come from new wind and solar. It will be supported by new pumped hydro and power, generated by FFI, AGL and other parties.
At the time of the announcement, FFI CEO Julie Shuttleworth said:
FFI's collaboration with AGL is an exciting opportunity to explore how to harness existing infrastructure in the Hunter Valley region, fast tracking the production and use of green hydrogen.
Over the next 12 months we will undertake a feasibility study which will identify key operational and commercial projections for the project and enable the development of a production timeline.
The Australian reported on comments made on the expanded feasibility study.
AGL chief operating officer Markus Brokhof said:
The feasibility scope will focus on assessing the accelerated implementation of a large scale production facility from minimum 150MW and up to 2GW of hydrogen and preferred derivatives including ammonia for export and domestic use.
[This hub] will be the first of its kind in Australia and will be an example of how an energy hub can combine grid-scale batteries, solar thermal storage, wind and pumped hydro.
AGL share price snapshot
Over the past month, AGL shares have risen by more than 3%.
According to The Australian, some investors think AGL may need to do a capital raising of up to $1 billion.
It also reported that investors think the earnings outlook for FY23 is unclear because AGL "needs to pay out on energy contracts that it has not been able to fulfil because of outages".
