Published name
Question 2.1: Please provide any feedback on the proposed eligibility requirements. Are there any other eligibility requirements the Program should consider?
Eligibility requirements are fine. Just need to keep in mind that other countries such as Japan are prepared to accept "blue" H2 and derivatives and focus on the carbon intensity of the product. In our case of course eligibility is for "Green" and CCS is excluded
Question 2.2: Does a minimum deployment size of 50 MW seem appropriate for the Program?
Yes, but encourage larger
Question 2.3: Are there benefits to considering a suite of project sizes, with large and smaller scale projects (for example less than 50MW) being eligible?
No
Question 2.4: Are there benefits to considering projects that may only have scale if aggregated across multiple, but related sites?
Totally agree, the program should encourage collaboration between producers in say a Hub such as the Hubter region where there are several projects being developed and there is a case for a consortium to be formed which will then maximise the optimisation and development of common user infrastructure. The consortium should be eligible to particpate in the program
Question 2.6: Some international schemes have limitations on proposed end uses of hydrogen such as the UK scheme which specifically excludes gas blending. Should any limitations be placed on the end uses eligible for the Program?
Gas blending projects have been already been very well supported by ARENA. Focussing on the production of green steel and aluminium as well as methanol and e fuels may be a better use of taxpayers money. It is now being recognised that drop in renewable fuels are attractive as they use existing assets within the supply chain. Support should also be provided to the production of materials for the renewable energy supply chain that come from Australia's reserves and supply of critical minerals. Not just exporting our rich soil/ground for processing overseas!
Question 2.7: Other international schemes consider both export and domestic use of hydrogen as eligible while others specifically exclude export projects. How should the Program consider projects with proposed export offtake and the extent to which this export offtake may support the development of an Australian hydrogen industry or other additional benefits to Australia?
We should remain flexible and evaluate on a case to case basis
Question 2.8: The proposed GO Scheme will be used to support the verification of hydrogen production. Are there projects where this would not be suitable? Should the Program apply a maximum emissions intensity for hydrogen production on a project lifecycle basis?
I think we need to be flexible as countries such as Japan are focussing on carbon intensity of the fuels and not necessarily totally "green".. We are in a competitive global environment
Question 4.1: Please provide any feedback on the proposed funding mechanism.
Mechanism is sound. Typically projects are justified over 15 years, so 10 years may not be enough and will require more Govt support to meet the required Internal rates of return (IRR) over a 10 year period.
ARENA also needs to be very vigilant that the cost of hydrogen production does not have an excessive IRR component built in and scrutinised accordingly to ensure taxpayers money is well
Question 4.2: Are there other design features or structures for the proposed Program that you think could be more impactful or efficient to catalyse large scale hydrogen production in Australia?
The price of H2 and derivatives will inevitably drop over time. Will the financial support be increased if say after a 5 year contract expires and then the customer want a lower price for the H2 as the market has moved lower over the 5 year period. I believe that the volume risk management is clear but not so for pricing.
Questions 4.5: How should the HPC consider inflation?
As with many contracts there are standard escalation clauses based on various markers of which inflation is but one.
Question 5.1: Other international schemes have varying upside sharing arrangements such as the UK scheme which requires projects to share 90% of upside back to the Government. Please provide your views on the proposed upside sharing arrangements for the Program, including with reference to the methodology for sharing upside (a reduction in the HPC).
Happy with what has been proposed but see my previous concerns on price etc in previous questions
Question 6.1: Do you think the Program should include volume risk support? If so, why?
Volume risk as described in the program is ok
Question 6.2: If volume risk support is required, what is the preferred structuring of the mechanism?
As per in the mechanism
Question 9.2: How should merit criteria be structured or weighted to ensure the success of delivery of hydrogen from projects?
These are the most important:
the capability and capacity of a project proponent to deliver its proposal
the credibility and level of conditionality of the offtake agreement
the extent to which the project has already undergone project planning processes including feasibility/FEED studies
Question 9.3: Should an applicant be required to have at least a conditional offtake arrangement in place before applying to the Program? What standard should be applied to determine the reliability of such an arrangement?
Yes, should at least be an MOU, but ideally a binding contract with conditions precedents
Question 9.4: What additional outcomes should be incorporated into the formal merit criteria for the Program in order to deliver broader benefits?
These ar the most important
level of private investment leveraged
use of hydrogen towards existing or new manufacturing industries
level of knowledge shared with the broader industry
Question 16.1: Does the timing proposed for the Program appear appropriate? If not, please note in your view an appropriate alternative.
Looks ok
Question 17.1: Do the proposed EOI information requirements seem reasonable? Are there any additional items you would add to the EOI information list, or items that may be subject to different interpretations / challenging to provide?
OK
Question 17.2: Do the proposed Full Application information requirements seem reasonable? Are there any additional items you would add to the Full Application information list?
OK
