The project could potentially bring billions of dollars of international investment to the Victoria and Australia, create a significant number of jobs across the pilot and commercial phase construction and operations and position Australia as a global leader in the supply of clean hydrogen energy.
The Project could create a new, thriving hydrogen export industry with huge local economic benefits and access to a future clean energy source for domestic use.
HESC will aim to establish an integrated commercial-scale hydrogen supply chain that encompasses production, transportation and storage, with a goal of delivering liquefied hydrogen to Japan.
The Hydrogen Energy Supply Chain project will be developed in two phases:
- The pilot phase will demonstrate a fully integrated supply chain between Australia and Japan over one year by 2021.
- The decision to proceed to a commercial phase will be made in the 2020s with operations targeted in the 2030s, depending on the successful completion of the pilot phase, regulatory approvals, social licence to operate and hydrogen demand.
The pilot phase
Hydrogen production operations for the pilot phase will be established in the Latrobe Valley Victoria, Australia at the AGL Loy Yang Complex. Operations will leverage existing coal gasification technologies adapted specifically for Victorian brown coal.
Hydrogen will then be transported to a liquefaction and loading terminal at the Port of Hastings Victoria, Australia.
Once converted to liquid, hydrogen will be shipped to Japan using a world-first, innovative liquefied hydrogen carrier, purpose built for hydrogen transport.
This project will be the first initiative to transport mass quantities of hydrogen across open waters and will demonstrate innovative world first technologies in the process.
- 2017 to 2018 Planning and Approvals: Front end engineering and design (FEED). Regulatory approvals and engagement with local communities.
- 2019 to 2020 Pilot Construction: Detailed design and construction of pilot facilities to commence from 2019.
- 2020 to 2021 Pilot Operations: Pilot operations and delivery of hydrogen to Japan.
- 2020s to 2030s Technical Reviews and Commercial Operations: The decision to proceed to a commercial phase will be made in the 2020s with operations targeted in the 2030s depending on the successful completion of the pilot phase, regulatory approvals, social licence to operate and hydrogen demand.
For funding purposes, the pilot phase is split into different delivery portions – a Japanese funded portion and an Australian funded portion.
The Australian funded portion is coordinated by Hydrogen Engineering Australia (HEA), a consortium comprised of several highly reputable Project Partners, including Kawasaki Heavy Industries (KHI), J-POWER, Iwatani Corporation, Marubeni Corporation and AGL. HEA is a 100 per cent subsidiary of KHI. This portion involves refining the hydrogen gas in the Latrobe Valley, transporting it to the Port of Hastings, converting it to liquid and then loading it onto the marine carrier.
Note: the Australian and Victorian governments are providing funds to the Australian portion.
The Japan funded portion of the HESC pilot phase is coordinated by the CO2-Free Hydrogen Supply Chain Technology Association (HySTRA), acting on behalf of KHI, J-POWER, Iwatani Corporation and Shell. The Japanese funded portion includes converting brown coal to gas in the Latrobe Valley, transporting liquid hydrogen by sea and then unloading it in Japan.
Note: the Japanese Government is providing funds to the Japanese portion.
Kawasaki Heavy Industries (KHI)
KHI has over a century of experience in research, development and innovation across energy, transport, shipping, submarines, aerospace, precision machinery and industrial robots.
KHI has already designed and built storage tanks used to hold hydrogen rocket fuel, as well as a ground breaking pilot hydrogen liquefaction plant.
Hydrogen is a key focus of KHI’s Corporate Strategy. Its main interest in hydrogen is to supply equipment and facilities for transportation, liquefaction and power generation.
Read more about KHI: https://global.kawasaki.com/
J-POWER has been producing electric power at more than 90 power stations including coal-fired power plants around Japan for over 60 years, and delivers electricity via some 2,400 km of transmission lines.
It is involved in energy projects in more than 60 countries mainly in North America, Southeast Asia and China.
J-POWER’s main focus for the HESC Project is coal gasification.
Read more about J-POWER: http://www.jpower.co.jp/english/
Iwatani Corporation is a large-scale supplier of gas energy and currently supplies liquid petroleum gas (LPG) to 3.1 million households across Japan.
Iwatani Corporation initiated operations at Japan’s first commercial liquefied hydrogen plant in 1978 and is Japan’s only producer and supplier of liquid hydrogen (LH2).
Iwatani Corporation’s main focus on the HESC project will be the handling and retail of hydrogen.
Read more about Iwatani Corporation: http://www.iwatani.co.jp/eng/
Marubeni Corporation is a major integrated trading and investing business, active in a broad range of products and services globally.
Its global activities encompass importing and exporting, as well as transactions in the world market across a number of business sectors.
On HESC, Marubeni Corporation will be focussing on trading a new commodity and infrastructure investment opportunities.
Read more about Marubeni: http://www.marubeni.com/
Shell is a global group of energy and petrochemicals companies with approximately 93,000 employees in more than 70 countries. Shell uses advanced technologies and take an innovative approach to help build a sustainable energy future.
Shell’s main focus in the project is to do with operation of the specialised hydrogen carrier.
Read more about Shell: https://www.shell.com/
AGL plays a critical role in the HESC pilot phase by providing the site for the pilot gasification plant, raw brown coal, and other services.
Drawing on more than 180 years of experience, AGL Energy provides gas, electricity, solar PV and related products and services to more than 3.6 million customer accounts across Australia.
Read more about AGL: https://www.agl.com.au/about-agl
The HESC pilot phase is divided into two portions, an Australian funded portion, and a Japanese funded portion.
Australian funded portion
Hydrogen Engineering Australia (HEA) has been established to progress the Australian portion of the pilot.
KHI, J-Power, Iwatani, Marubeni and AGL will demonstrate the gas refining, transport, liquefaction and storage in Australia.
Japanese funded portion
The Japanese technical research association CO2-Free Hydrogen Energy Supply Chain Technology Research Association (HySTRA) will deliver the Japanese funded portion of the pilot. HySTRA is comprised of KHI, J-POWER, Iwatani and Shell.
HySTRA will be responsible for gasification in Australia, shipping liquefied hydrogen, unloading and storage in Japan.
Australian and Victorian Governments
The Australian, Victorian and Japanese Governments are supportive of the HESC project and its potential to deliver zero-emissions hydrogen to Japan. They are providing funds to their respective jurisdictions for the HESC project. The Australian and Victorian Governments provided funds to the development of the Front End Engineering and Design (FEED) stage of the HESC pilot project in 2017 and will continue their support throughout the pilot phase to maintain oversight to ensure a pathway towards commercialisation is possible.
External advisers engaged to assist with HESC activities in Australia, include:
- KPMG (lead strategic adviser)
- GHD (technical, approvals, community and stakeholder engagement adviser)
- Advisian (technical adviser)
- Clayton Utz (legal adviser).