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ReNu Energy Update on Countrywide Hydrogen

ReNu is pleased to provide our shareholders and subscribers with a corporate update outlining the status of our hydrogen developments, upcoming milestones and other matters of significance.

ReNu Chairman Boyd White commented “We are making tangible progress on the development of our hydrogen projects in Tasmania and Victoria. For our Tasmanian Hydrogen HyWay project, we have an option over land, approvals in process, construction contracts materially complete, FEED and final pricing near completion, behind-the-meter solar and grid-connected power procurement being progressed, an offtake book being built, and we are assessing financing options. These projects are just the beginning of our journey to replicate our Hydrogen HyWay concept on mainland Australia and we will be able to elevate the level of communication with shareholders as we close out the various development components.”

About Tasmania Hydrogen

Our current hydrogen focus is on decarbonising the heavy transport industry. The Tasmanian hydrogen project (Hydrogen HyWay #1) on which we have been working for 18 months will deliver Australia’s first end-to-end hydrogen transport ecosystem. It is planned to incorporate two hydrogen production and refuelling facilities initially, one in the north of Tasmania (near Devonport) and the second in the south (near Hobart).  A third facility near Launceston is planned to follow within 12-24 months of commissioning these facilities. 

Each facility is designed to comprise a 5-megawatt electrolyser and a hydrogen refuelling station with two 350 bar dispensers capable of supplying up to 690,000kg of green hydrogen per annum, which equates to refuelling around 33 fuel cell trucks per day when the scheduled ramp-up is completed in year 3. 


Tasmania Hydrogen Projects Status

1. Technical

Fabrum is progressing the front-end engineering design (FEED) and pricing on the hydrogen refuelling facility for the first two Tasmanian sites. The outcome is to provide a final price based on that design and on the terms in the Engineering, Procurement and Construction (EPC) contract that has been materially negotiated.  Discussions with Fabrum have the FEED and final price due by May.

Electrolyser supplier Plug Power is finalising the pricing from last year for the supply contract that has been materially negotiated. Discussions with Plug Power also have the final price due by May.

These prices and contracts will specify the capital cost and commercial operations date and form the basis of our financing requirements.

2. Approvals & Land

An option to lease land at Wesley Vale was executed in January 2024 and the Notice of Intent to build and operate a hydrogen production and refuelling facility has been lodged with EPA Tasmania.

Due to grid connection issues at the site for Tasmania South at Brighton, for which we had submitted a Notice of Intent, a new site is required. Negotiations are underway for the new site, which is better suited to grid connection constraints. The new site will see the approval timeline a little behind that of Wesley Vale.

3. Grid Connection and Power

A connection enquiry has been submitted and payment made to TasNetworks for a transmission connection for the Wesley Vale site. Due to the significant pre-work with TasNetworks and subject to grid studies, we anticipate an offer within the next 4 months.  Discussions continue with TasNetworks on various options at Brighton.

We have entered negotiations with Tasmanian solar developer Climate Capital for a 10MW solar farm to provide 5MW behind-the-meter solar to the Wesley Vale site and a ~5MW export power offtake for the Brighton site. 

A power purchase agreement (PPA) offer is scheduled to be received this month.

Consultants have been retained to provide a grid power procurement strategy and confirm the power price assumptions in our financial model.

4. Offtakes

We continue to build our offtake book with intending hydrogen customers from road transport companies and their customers like Australia’s largest supermarkets, agriculture, fast food, dairy, timber, minerals and livestock sectors, and government business enterprises.  Also in the mix are local councils seeking zero-emission waste collection and cement companies.  

A term sheet will be shared with sample customers this month to achieve common ground with respect to vehicle numbers and commitment to volumes of hydrogen. Within the next 4-6 months, we intend to convert enough of the offtake book to binding term sheets to underpin our financing requirements.

A transport study completed last year indicates that with our Tasmanian project running at full capacity, we can capture approximately 4% of the heavy transport market which is perceived to be an achievable target given the level of interest received.

5. Fuel cell vehicle supply and asset finance.

To complete the hydrogen ecosystem Countrywide is working to secure access for its customers to fuel cell prime movers and rigid trucks from recognised manufacturers that offer a dealership network for service and maintenance, and are acceptable brands to the transport industry and unions.  These vehicles are left-hand-drive and Countrywide is collaborating with The Walkinshaw Group who intend converting imported fuel cell vehicles for the Australian right-hand-drive market.  

We are also working on an asset finance package to complete the picture with consideration of providing vehicle rental including hydrogen and repairs and maintenance under a total cost of ownership model. 

6. Green Hydrogen Price Reduction Scheme (GHPRS)

Late last year the Tasmanian Government called for submissions from hydrogen production interests to apply for funding to enable the price of hydrogen to be reduced to be as close as possible to the price of diesel.  The Scheme has an allocation of $8 million to provide for hydrogen projects.

With Countrywide’s Tasmania project as designed meeting the eligibility criteria, Countrywide submitted a proposal in December 2023.  Due to the March 23 State election and the Government being in caretaker mode as a result, an announcement of the successful applicants has been delayed for some weeks with the election result yet to be finalised. 

7. Federal Government Grants

We, with assistance from Deloitte have been invited to submit a revised proposal for ARENA’s consideration to support an application for grant funding through the Advancing Renewables Fund for our ecosystem in Tasmania.  ARENA is keen to understand what learnings and knowledge can be shared nationally which is the return on investment they are seeking from providing a grant.  While the application and presentation process is detailed and takes time, it does provide the nation with examples of how taxpayers’ funds are best spent to benefit the nation and explains why the process is so demanding.  

Hydrogen HyWay#2 – Victoria & South Australia Project

Intending offtakers in Tasmania have operations in the “Green Triangle” which embraces southwest Victoria and southeast SA and are keen to see green hydrogen produced there to decarbonise road transport.  For some time Countrywide has been examining Portland in Victoria as a base for a second Hydrogen HyWay due to its electrical infrastructure, port facilities and road transport volumes. Countrywide is collaborating with Diamond Generation Asia (DGA), a Mitsubishi company as a project partner to jointly conduct a feasibility study with respect to the delivery of a domestic supply project as Stage 1, followed by an export project as Stage 2.  DGA is an ideal partner on both counts but particularly with respect to a potential export project due to their relationship with the Japanese Government which is seeking access to green hydrogen or ammonia for future electricity generation.

Portland Diversification Fund

In conjunction with DGA, Countrywide applied in February for feasibility study funding from the Regional Development Victoria’s Portland Diversification Fund.  Applications have been assessed by an independent panel and the results are not expected to be made public until mid-May at the earliest.  The feasibility grant sought is up to $500,000.

Lanceston Airport project render

CH is also working closely with road transport companies interested in offering a zero-emission option to their customers.  With several major businesses and sectors intent on reducing their emissions to reach stated targets, fertile ground exists to support first-mover transport companies in transitioning to fuel cell vehicles with CH being the hydrogen supplier.

Cost base

We accept feedback we have received that our cost base is high for a company of our market capitalisation. We want you to know that most of our costs go directly into the project as project development activities, which we consider will generate value as the Company grows and scales its activities. 

We have commenced a review of our cost base focused on identifying areas where savings can be made without impacting adversely on project delivery.  We anticipate advising shareholders of the outcomes of the review shortly.