Taranaki hydrogen power project could cost $4b

The company behind plans for a clean hydrogen power plant in Taranaki says it would cost up to $4 billion and represents the largest-ever inward investment in New Zealand.

Pouakai NZ, a wholly-owned subsidiary of US company 8 Rivers, has announced it is moving forward with its proposal, which would use natural gas to create hydrogen and electricity, as well as urea fertiliser for domestic use and export, without any release of greenhouse gases.

The plans were announced on Saturday and the company has approached the government for funding towards a $50 million feasibility study, although if the project does go ahead it would be entirely privately funded, a Pouakai NZ spokesperson said.

However, Andrew Clennett of New Plymouth-based hydrogen company Hiringa Energy said regardless of the government's decision to move away from oil and gas exploration, there was no guarantee there was enough natural gas reserves in Taranaki for the likes of such a project.

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"It's important to understand we're dealing with the finite resources of the gas in New Zealand," he said.

"Certainly the natural reserves are not particularly robust; that's one of the concerns."

The power plant would still create carbon dioxide as a by-product, but Pouakai NZ aims to trap and store it. 

​"We still need to ensure we can store all that and what is it going to cost?" Clennett said.

Hiringa Energy is looking into 'green' hydrogen generation, which uses renewable energy instead of fossil fuels.

Clennett said he was not privy to any research done by Pouakai, but creating hydrogen with renewable energies was getting more and more feasible.

"We're not far off making hydrogen from renewables at the same cost as making it from natural gas, and over time it will be cheaper."

Councillor Stacey Hitchcock, who travelled to Scotland last month as part of an industry research group, says hydrogen is part of the answer for Taranaki's future economy.

"This is the kind of technology we're going to be needing," she said.

"Renewables are not yet at a level where we can switch off oil and gas. We need that bridge."

She said if the goal was simply to produce zero emissions, the technology used by Pouakai NZ met the brief.

But if the government was fundamentally opposed to the use of fossil fuels, she would expect accelerated strategy and investment in renewables such as wind turbines.

South Taranaki mayor Ross Dunlop said it would be good to have a link between the new project and the wind farm at Waverley and the Ballance ammonia/urea plant in Kapuni.

"It may even make it more reason for exploration to actually continue."

Cameron Madgwick, chief executive of the Petroleum Exploration and Production Association NZ (Pepanz), said the government had to rethink oil and gas exploration.

"This is a great example of the role of natural gas in a lower-carbon world.

"It could be a win-win outcome, investing billions and creating new jobs while helping the Government achieve its lower emission goals."

However, Greenpeace is calling on the government to clarify that any investment in hydrogen technology should be for clean hydrogen made from renewable sources. 

"We should be investing in energy systems that are based on sources that are clean and infinite, such as wind and solar," campaigner Steve Abel said.

Labour Party Energy and Resources Minister Megan Woods could not comment on an ongoing Provincial Growth Fund (PGF) application, but said in a statement that a hydrogen strategy was being developed "so we can realise all the exciting opportunities it presents to us as a country".

"We have already invested PGF money in hydrogen projects."

A spokesman for Regional Economic Development Minister Shane Jones confirmed an application had been made to the PGF but could not comment further.