Power plants can kickstart Australia's hydrogen economy, GE says

MELBOURNE, June 17 (Reuters) - Interest in using hydrogen in gas-fired power plants is growing in Australia, where one project last month got the go-ahead, which could drive early demand for green hydrogen, General Electric Co executives said.

GE in May won a contract to supply a turbine for a A$300 million ($229 million) expansion of a gas-fired plant owned by Australia’s third-largest power retailer EnergyAustralia, which will be the country’s first commercial power plant able to use both gas and hydrogen.

“What we’re effectively doing through this project is kicking off the hydrogen economy in Australia,” GE’s Australia head, Sam Maresh, told Reuters in an interview.

“There’s a lot of talk about hydrogen. But here the rubber hits the road with this project.”

A bigger project, a A$1 billion gas-fired plant planned by mining magnate Andrew Forrest, is also looking to be able to run on hydrogen, but has yet to reach a final investment decision.

Maresh and GE Gas Power Asia Pacific head Aaron Scott declined to comment on whether GE is in talks with Forrest’s Australian Industrial Energy on that project.

“Virtually every customer that we are working with is asking about hydrogen,” Scott said. “There is significant interest right across the industry.”

Australia’s gas producers who are working on plans to produce hydrogen say one of the big challenges is to ensure that there is demand for the product.

Projects like EnergyAustralia’s Tallawarra gas plant expansion, which will take 200 tonnes a year of hydrogen, will help spur demand, which in turn will help drive down prices for the product which is currently uncompetitive with gas.

“The challenge from an industry perspective is that hydrogen as a fuel is still expensive at this point in time. So the focus needs to be on growing the volume of hydrogen available, but also being able to deliver that hydrogen at a competitive price,” Scott said.

$1 = 1.3113 Australian dollars Reporting by Sonali Paul; Editing by Christopher Cushing