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Hydrogen plant proposed for Southland

As the closure of Bluff's Tiwai Point aluminium smelter looms, Contact Energy and Meridian Energy are looking for partners to develop what they say could be the world’s largest green hydrogen plant.

Tiwai Point aluminium smelters. Source: 1 NEWS

Meridian Energy chief executive Neal Barclay said the potential development in Southland “could deliver significant decarbonisation, economic and energy independence benefits for New Zealand”. 

“Our renewable energy gives us a valuable head start and competitive edge as markets for green hydrogen develop. Early, large-scale production will allow us to build a domestic hydrogen supply chain and kickstart demand around the country.”

A recently-released report by McKinsey & Co, commissioned by Meridian and Contact, said a 600 megawatt green hydrogen export facility could create thousands of construction jobs and up to $450 million and hundreds of additional jobs in the longer-term. The report is part of a feasibility study into a hydrogen plant in Southland. 

The report also estimated the development would include a one-off addition of $800 million to New Zealand’s GDP and position the country to become a “world-leading” green hydrogen exporter.

Hydrogen tanks (file picture). Source: istock.com

The report estimated global demand for hydrogen could increase more than sevenfold to 553 million tonnes by 2050. 

“Green hydrogen” is produced through the use of renewable energy to power the electrolysis of water to split it into hydrogen and oxygen. About 40 per cent of New Zealand’s energy comes from renewable sources

Contact Energy CEO Mike Fuge said green hydrogen production could help the country transition to 100 per cent renewable electricity generation. 

“This can be achieved by reducing hydrogen production when the country’s hydro lakes are running low, allowing electricity to flow back into the national grid to support local homes and businesses,” he said. 

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The report found green hydrogen could solve up to 40 per cent of New Zealand’s “dry year” problems.

“This flexibility would see hydro generation replace coal and gas-fired generation and reduce carbon emissions,” Fuge said. 

“Given the low lake levels over the past six months, if this plant had been available this year it could have been used to avoid up to one million tonnes of carbon emissions.”

The Government and the private sector have already committed $200 billion to developing hydrogen economies. 

Two further reports in the feasibility study into a hydrogen plant are expected to be completed later this year. 

The registration of interest process will run for two months through to October. 

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Southland economy thrown a lifeline: Tiwai Point smelter to remain open until 2024

New Zealand Aluminium Smelters has a contract for electricity supply with Meridian Energy until the end of 2024. About 1000 jobs are threatened by the closure of the Tiwai Point smelter.