New Zealand’s Southern Green Hydrogen project will be led by either Australian energy firm Woodside or green hydrogen company Fortescue Future Industries. Both firms have entered final-stage negotiations with the joint developers, utilities Meridian Energy and Contact Energy.

The project, in New Zealand’s Southland region, is at an early stage of development but will likely produce hydrogen from hydropower as both utilities have a high proportion of that form of generation in their portfolios.

The development was prompted by the imminent end of an electricity supply agreement to the Tiwai Point aluminium smelter in 2025. The smelter consumes 12pc of New Zealand’s electricity demand.

The proposals received from both firms during the initial selection process made it clear that large-scale production and export of green hydrogen or green ammonia is technically feasible and commercially viable, according to Meridian Energy CEO Neal Barclay.

“Both have demonstrated that global markets for green hydrogen and green ammonia are imminent, and both are engaged in discussions with customers about buying the large volumes that the Southland plant will produce,” he says.

“Both firms have demonstrated that global markets for green hydrogen and green ammonia are imminent” Barclay, Meridian

The two companies—chosen from a shortlist of four that were invited to submit responses to a request for proposals in May—will provide more details to the joint Contact and Meridian team by the end of August. The final selection of the lead developer will be announced soon after.  

The next stage of the process will involve consultation with Murihiku Regeneration—a body that represents the interests of the Maori groups Murihiku Runaka and Ngai Tahu.

Assessing feasibility

An internal team from the two project developers has carried out a technical and economic assessment of the project, but this has not been published. A study on the project’s ability to reduce green hydrogen production when New Zealand’s hydro reservoirs experience low inflows is also underway.

Japan and South Korea offer the most significant export opportunities for future New Zealand green hydrogen or green ammonia, according to a third, early-stage study.

Modelling shows that the project could achieve a delivered cost in Japan of NZD6.60-8.60/kg ($4.2-5.5/kg) for green hydrogen.

“New Zealand has an initial competitive advantage in the supply of green hydrogen and green ammonia based on the large tranche of existing baseload renewable power generation available from 1 January 2025,” says the report, titled The New Zealand Hydrogen Opportunity.  

“Potential competitors in the Middle East, Australia and Chile cannot boast any of these key attributes,” it adds, going on to note that New Zealand’s long-term export competitiveness will hinge on its ability and willingness to match the levelised cost of electricity of new renewable energy generation overseas.

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Author: Tom Young