Iberdrola joins ABEL Energy in $1.7b Tasmanian project that plans …
Bilbao-based Iberdrola has singled out Australia as a key market as it works to realise its renewables superpower ambitions. Global CEO Ignacio Galan met Prime Minister Anthony Albanese in September to discuss opportunities here.
It snapped up local renewables developer Infigen Energy in 2020, and was also in the running for CWP Renewables, which was won by Andrew Forrest’s Squadron Energy earlier this month.
New wind farm likely
Robert Ludecke, Iberdrola Australia’s general manager for hydrogen and strategic projects, said that while the Spanish company’s commitment at this point went only as far as the design and engineering work, it was fully intending to take the venture through to a final investment decision, in about mid-2024.
Commercial operation was targeted for mid-2026, Mr Ludecke said.
He said Iberdrola would take charge of developing renewable energy sources that would power the 140-megawatt electrolyser used in the initial stage of the project to create green hydrogen. That would then be converted into green methanol by adding carbon from forestry wood waste.
The most likely source for the renewable power would be a new wind farm, and discussions were under way with potential developers. Firming capacity for the wind power would come from Hydro Tasmania.
About $600 million to $700 million would be spent on the new renewables capacity and about $1 billion on the hydrogen and methanol part of the project, Mr Ludecke said.
The Bell Bay venture is one of several green hydrogen-related projects being proposed around Australia, of which only one – an $87 million project in Western Australia’s Pilbara region targeting supply for fertiliser company Yara – has so far reached financial close.
But Mr Ludecke said the methanol project had an advantage over several other proposed ventures focused on ammonia because it involved a smaller electrolyser more easily accommodated within the power grid, and involved fewer environmental issues with the output.
He said Australia’s reliance on imports from New Zealand for existing methanol needs meant there was an immediate local market available, before the start-up of expected exports to shipping companies.
ABEL’s Mr van Baarle said the full project would require a significant amount of project financing that would come from banks or other investors confident in the project’s prospects.
“The market is not going to be the problem; it’s more about the fact that producing green methanol at the scale we are talking about is a relatively novel process,” he said, even though it involved known technologies.