Australia’s first remote, renewable hydrogen microgrid wins ARENA backing

Horizon Power plans to build Australia’s first remote microgrid using renewable hydrogen generation in the Western Australia coastal town of Denham have won the backing of the Australian Renewable Energy Agency.

ARENA said on Friday that it had awarded $2.6 million in funding to the ground-breaking project, that will use solar and hydrogen generation and storage to provide 526MWh of dispatchable renewable electricity, enough to power 100 homes.

W.A. government-owned utility Horizon Power announced the demonstration project at the beginning of this year, as part of an innovative overhaul of  the electricity generation system of the remote town, which sits around 100km south of Carnarvon and is currently powered by a combined of diesel and an ageing wind power system comprising four turbines installed more than 20 years ago.

The new plant – which will be connected up to the existing hybrid system – will consist of a 348kW hydrogen electrolyser with compression and storage and a 100kW fuel cell, alongside 704kW of solar that will power the electrolyser to produce hydrogen for storage. The stored power can then be used in the fuel cell, to deliver electricity when it is needed.

As well as testing a renewable energy solution that could be replicated in the many other remote power systems across Horizon’s grid, ARENA says the demonstration will be a great test case for whether renewable hydrogen can displace diesel for energy generation in remote communities across Australia.

“Remote and off-grid communities like Denham suffer from high energy costs due to costly diesel-based energy generation systems,” said ARENA CEO Darren Miller in a statement on Friday.

“The potential for these communities to generate, store and use their own renewable energy could simultaneously reduce costs and reduce emissions without sacrificing the reliability of energy supply.

“With projects like this and our $70 million commercial scale funding round, ARENA is hoping to reduce the overall cost of producing renewable hydrogen, in line with the National Hydrogen Strategy,” Miller said.

“Clean hydrogen could be a major export industry in the future, but in the near term we can utilise renewable hydrogen for domestic purposes and we’re excited to see how Horizon Power’s first-of-a-kind project could transform remote area power systems into state of the art renewable energy hubs.”

Horizon Power, which expects construction of the Denham Hydrogen Demonstration to start in August next year and to be commissioned by December 2021, said the project would be a vital technical and practical learning curve for the company, while renewable hydrogen remained not-yet commercially viable.

“This plant will demonstrate how hydrogen can reliably produce power for our towns currently dependent on diesel fuel power systems and allow us to transition our network away from higher emission generating sources and meet our target of no new diesel generation systems from 2025,” said Horizon Power CEO Stephanie Unwin.

“This technology has the potential to be an environmental game changer for many remote towns in Western Australia and other similar locations around Australia, and allow greater uptake of reliable cleaner, greener renewable energy sources in the future.”

The project has also received $5.7 million in funding from the Western Australian government’s Recovery Plan, including $1 million from the Western Australian Renewable Hydrogen Fund.