Contact, Meridian scout out hydrogen interest
Contact Energy and Meridian Energy are looking for partners for what could become the world’s biggest green hydrogen plant.
Green hydrogen, a fuel produced by electrolysing water, is being increasingly seen globally as one of the key solutions for reducing greenhouse gases.
It does, however, require a lot of electricity and Southland has the benefit of a reliable renewable source from the Manapo¯ uri power station that is currently being used by the aluminium smelter at Tiwai Point.
A feasibility report by international consultancy Mckinsey and Co says a green hydrogen plant has the potential to earn hundreds of millions in export revenue and help decarbonise economies both here and overseas.
The report was commissioned by Meridian and Contact as one option once their supply agreement with Rio Tinto-owned New Zealand Aluminium Smelters finishes at the end of 2024.
Meridian chief executive Neal Barclay said a hydrogen economy could deliver significant economic and energy independence benefits for New Zealand, as well as environmental ones.
‘‘Our renewable energy gives us a valuable headstart and competitive edge as markets for green hydrogen develop,’’ he said.
‘‘Early, large-scale production will allow us to build a domestic hydrogen supply chain and kickstart demand around the country.’’
The power companies also believe green hydrogen could give them the flexibility to dial down production when lake levels are low, allowing that electricity to flow back into the national grid.
‘‘In this mode of operation, green hydrogen could solve up to 40 per cent of New Zealand’s ‘dry year’ problem,’’ Contact chief executive Mike Fuge said.
That could help the country cut down on coal and gas-fired electricity generation, he said.
The Southern Green Hydrogen feasibility study is ongoing, with two further reports being produced later in 2021.
Not all the energy would be for New Zealand. In fact, exporting green hydrogen is being considered as a way to give green hydrogen an outlet until hydrogen-using technology in the transport and industrial sectors catches up.
New Zealand has already signed co-operation agreements with Japan and Singapore to research production, and similar agreements have been made with South Korea.
Meridian and Contact’s fanfare about their idea comes as the Ministry of Business, Innovation and Employment continues its own investigation into options for how best to deal with New Zealand’s ‘‘dry year’’ risk.
The proposal also comes amid speculation that Rio Tinto may want to extend the life of the Tiwai smelter beyond the end of 2024 because of high aluminium prices. Proposing a huge green hydrogen scheme in Southland could aid the power firms in any negotiations with Rio Tinto.
Guy Waipara, Meridian’s general manager of development, said the interest from international players had been real.
However, getting it ready as soon as 2025 would be a challenge.
‘‘This is part of why we’re going to market to see what demand is going to look like.’’