Out-Law / Your Daily Need-To-Know
Australia’s Clean Energy Finance Corporation (CEFC) has committed A$300 million (£164 million) to hydrogen projects in a boost to the country’s green hydrogen sector.
The government-backed body is providing debt or equity finance to larger-scale commercial and industrial hydrogen projects which typically require A$10m or more of CEFC capital. The Advancing Hydrogen Fund was launched following the Australian government’s Clean Energy Finance Corporation Investment Mandate Direction 2020.
CEFC said it would co-fund projects included in this round in line with the CEFC Act, which requires funding beneficiaries to be commercial, draw on renewable energy, energy efficiency, or low emissions technologies, and contribute to emissions reduction.
The funding follows the Australian Renewable Energy Agency's (ARENA) Renewable Hydrogen Deployment Funding Round, which offered A$70m of grants to fast track the development of renewable hydrogen in Australia earlier this year.
ARENA's funding round targeted projects with an electrolyser capacity of over 10MW, which will enable renewable hydrogen to be produced from wind and solar energy.
A total of seven applicants were shortlisted for ARENA grants, with projects due to start construction in 2022. The CEFC will seek to invest in these projects as part of its funding round.
Renewable energy expert George Varma of Pinsent Masons, the law firm behind Out-Law, said: “Green hydrogen has a bright future in Australia with fresh funding from ARENA and CEFC which will help build local expertise, drive down emissions and strengthen private investor confidence in hydrogen projects.”
Green hydrogen is produced by electrolysing or 'splitting' water into hydrogen and oxygen atoms using renewable energy. This hydrogen can then be harnessed to power homes and industry through heating, cooking, transport and steel production, with opportunities for export as demand grows.
CEFC chief executive Ian Learmonth said hydrogen had the potential to make a substantial contribution to Australia’s transition to clean energy.
“Renewable hydrogen can enable the deep decarbonisation of notoriously difficult-to-abate sectors, particularly in transport and manufacturing, while accelerating the contribution of renewable energy across the economy,” Learmonth said.
The CEFC provides funding for renewable energy, energy efficiency and low emissions technology projects around the nation, and made over A$1 billion of new investments in 2019/20.
