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Summary
- Meridian Energy and Contact Energy actively looking for registrations of interest to build the biggest hydrogen plant.
- The world’s biggest green hydrogen plant could mean major steps toward decarbonisation.
- McKinsey & Co report outlined the new initiative’s benefits like job creation, revenue generation and conservation of energy.
It was recently announced by two energy giants Meridian Energy Limited (NZX:MEL; ASX:MEZ) and Contact Energy Limited (NZX:CEN; ASX:CEN) that they were joining hands to create what will be the biggest green hydrogen-based plant in the world. Right now, the companies are looking for interest registrations for the same.
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What does the McKinsey & Co report say?
After commissioned by the companies, McKinsey & Co has offered its report on the matter, according to which, this new initiative shall be green energy driven, resulting in a cleaner environment. It will also mean gaining hundreds of millions in terms of revenue through export and could be something both the companies might benefit from in the long run.
McKinsey & Co report was also set to investigate about renewable energy use in the Southland location in order to produce green hydrogen, post the supply agreement with New Zealand Aluminium Smelters is finalised in 2024.
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It has been on a record that as much as NZ$200 billion has been allotted by governments and the private sector across the globe towards the development of sustainable hydrogen in leading economies.
It was further said in the report that there could be a worldwide increase in the demand for hydrogen, reaching as much as 553 million tonnes by the year 2050. It is also being believed that Southland has the potential to be at the centre of all of this growth potential.
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What is Contact Energy’s CEO saying?
Mike Fuge, the CEO of Contact Energy, said that the production of green hydrogen should support the transition of New Zealand towards becoming 100% renewable sources-driven nation, a place that generates electricity from renewable sources.
For the same, the need of the hour is to reduce the production of hydrogen when the national reserves run low, in order to facilitate the return of electricity to the national grid and be then distributed for local residential and commercial uses.
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Meridian Energy’s perspective
Neal Barclay, the CEO of Meridian Energy, was of the view that the development of the proposed hydrogen economy would mean huge benefits in terms of delivering energy and monetary independence to the country while contributing majorly towards decarbonisation.
It is the head start required to offer markets a competitive edge for the appropriate generation of green hydrogen. It shall offer the possibility of building a chain of hydrogen supply at the domestic level and initiate demand for the same across the country.
According to the report, the 600-megawatt export facility with green hydrogen production shall be the contributor of as much as NZ$800 million towards the GDP of the country, besides creating several thousand job opportunities regularly.
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On 22 July, at the time of writing, Meridian Energy was trading up by 0.75% at NZ$5.37. However, at the same time, Contact Energy fell by 0.12% at NZ$8.22.
