Origin Energy exits Hunter Valley Hydrogen Hub development
Origin Energy has decided to withdraw from its hydrogen development project in the Hunter Valley, citing uncertainty around the hydrogen market's development and risks tied to capital-intensive projects
Origin Energy has announced its decision to exit the Hunter Valley Hydrogen Hub (HVHH) project. The decision reflects the company's concerns about the uncertain pace of hydrogen market development and current risks associated with the cost and technology advancements required for large-scale hydrogen projects.
Origin CEO Frank Calabria said the company had thoroughly assessed the potential for hydrogen but found that the market is advancing slower than expected. "It has become clear that the hydrogen market is developing more slowly than anticipated, and there remain risks and both input cost and technology advancements to overcome," Calabria explained.
The Hunter Valley Hydrogen Hub was originally planned to be built on Kooragang Island, with hydrogen production aimed at replacing natural gas in ammonia manufacturing and supporting mobility applications. In 2023, Origin partnered with Orica, moving the project into the front-end engineering and design phase. The NSW Government granted planning approval, and the project had been shortlisted for the Australian Government’s Hydrogen Headstart program.
Despite the project's progress, Calabria noted that Origin has opted to prioritise capital expenditure on projects more closely aligned with the company's focus on renewables and energy storage. "We believe investments focussed on renewables and storage can best support the decarbonisation of energy supply and underpin energy security over the near term," he said.
While discontinuing all hydrogen development work, Origin remains open to considering commercial opportunities for the HVHH. Calabria expressed gratitude for the support received from various stakeholders, including government bodies and the community, but highlighted the challenges that led to the decision. “We acknowledge there will be some disappointment at this decision and are grateful for the opportunity to evaluate the feasibility of this project,” Calabria concluded.
