Geraldton could become a global green hydrogen hub but needs government backing to achieve the scale required to drive down costs, according to a study for BP released yesterday.

By 2050 total annual demand for green hydrogen and hydrogen as ammonia could reach 62 million tonnes, according to the $4.3 million study by GHD.

The clean fuel could be used in Australia instead of diesel for transport and coal and diesel for power and displace gas for heating but was likely to be more expensive than batteries for passenger cars.

“The absence of a carbon price or emissions cap is a key barrier to attracting investment in renewable technologies such as hydrogen,” the report concluded, contradicting the Federal Government’s technology not taxes approach.

The power, shipping and fertiliser markets in Japan and Korea offered the best export prospects.

The advantages of WA’s Mid-West for green hydrogen production included low-cost access to land, domestic markets, low sovereign risk, and being on the world’s best locations for wind and solar combining to deliver 24-hour renewable energy.

BP Australia president Frédéric Baudry said the study confirmed the potential for scaled-up green hydrogen in WA.

“This looks particularly promising in the mid-west of WA, which has existing infrastructure, access to land and abundant renewable energy resources such as wind and solar,” Baudry said.

“Importantly, our study also confirmed strong demand from potential customers in the hard-to-abate sectors, and for both local and export markets.”

GHD advisor Jason Fonti said a pathway to “the magic figure” of producing green hydrogen for $2 a kg was becoming clearer, and WA could become a significant exporter.

BP said any plant would need to be supported by significant investment in ports, water supply and electricity networks.

Currently, green hydrogen is expensive, and the market is small. Market expansion needs cheaper product, but that can only occur with the economies and learnings from large scale deployment.

BP is looking at a two-stage approach in WA: first learn and let technologies develop, then deploy at scale.

GHD studied an initial small demonstration plant and a follow-up massive one million tonnes a year ammonia plant, equivalent to 175,000 tonnes of hydrogen.

The GHD report made public as it was part-funded by the Australian Renewable Energy Agency contained no cost or schedule details.

The 20,000 tonnes a year demonstration ammonia plant 5km from Geraldton would need a 35-megawatt power purchase agreement, primarily to drive the electrolysis that separates water into hydrogen and oxygen. The plant would use various technologies to allow them to be tested before the larger plant is designed.

The capacity of Western Power’s network near Geraldton is constrained and, without an upgrade, may not always supply the full power needs of the demonstration plant.

The main hurdle for investing in the demonstration plant would be securing customers willing to pay a sufficient price.

A commercial-scale plant would require 1370MW of power to run at full capacity. Power from 2000MW capacity of both wind and solar power would allow the electrolysers to average 77 per cent utilisation. The wind power is equivalent to 11 Warradarge wind farms.

Two sites were considered: an inland site southeast of Geraldton near the demonstration plant or the proposed Oakajee industrial area north of the town. Both sites require a desalination plant that WA’s Water Corporation could share.

Both options need substantial investment in port infrastructure.

BP said it would continue developing plans for green hydrogen projects in WA.