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Origin pulls out of Hunter Valley hydrogen hub

Hydrogen

Origin Energy will scrap plans to co-develop the Hunter Valley hydrogen hub (HVHH) after citing cost concerns.

Origin and explosives company Orica first announced their intention to complete a feasibility study into the project in 2022. Since its inception, the project has received significant financial backing from the NSW and Federal Governments, both eager to kick-start Australia’s hydrogen industry.

The project was shortlisted under the Federal Government’s Hydrogen Headstart program.

Gas produced at HVHH was intended to displace natural gas as feedstock in nearby ammonia manufacturing – which is typically an emissions-intensive process.

But the project proved too large a gamble for Origin, with Origin CEO Frank Calabria announcing the company’s exit this week.

“We continue to believe hydrogen could play a role in the future energy mix. However, it has become clear that the hydrogen market is developing more slowly than anticipated, and there remain risks and both input cost and technology advancements to overcome,” he said.

“The combination of these factors mean we are unable to see a current pathway to take a final investment decision on the project.

“The decision to exit reflects the prioritisation of capital expenditure towards opportunities closely aligned to Origin’s strategy. Ultimately, we believe investments focussed on renewables and storage can best support the decarbonisation of energy supply and underpin energy security over the near-term.”

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