Contact Energy and Meridian Energy are seeking registrations of interest to develop a large-scale green hydrogen plant in New Zealand.

The McKinsey & Co report was commissioned by Meridian and Contact, who are investigating the use of renewable energy in Southland to produce green hydrogen at scale, once the supply agreement with New Zealand Aluminum Smelters finishes at the end of 2024.

"Developing a hydrogen economy based on large-scale production in Southland could deliver significant decarbonization, economic and energy independence benefits for New Zealand," Meridian Energy Chief Executive Neal Barclay said.

"Our renewable energy gives us a valuable head start and competitive edge as markets for green hydrogen develop. Early, large-scale production will allow us to build a domestic hydrogen supply chain and kickstart demand around the country."

Economic benefits outlined in the report for a 600 MW green hydrogen export facility include a one-off addition of up to $800 M to New Zealand’s GDP and the creation of thousands of jobs in construction, as well as up to $450 MM and hundreds of additional jobs on an ongoing basis.

Contact Energy CEO Mike Fuge said green hydrogen production will also support New Zealand’s transition to a 100% renewable electricity generation system.

"This can be achieved by reducing hydrogen production when the country’s hydro lakes are running low, allowing electricity to flow back into the national grid to support local homes and businesses," said Fuge. "In this mode of operation, green hydrogen could solve up to 40% of New Zealand’s ‘dry year’ problem. This flexibility would see hydro generation replace coal and gas-fired generation and reduce carbon emissions."

"Given the low lake levels over the past six months, if this plant had been available this year it could have been used to avoid up to 1MMt of carbon emissions."

The Southern Green Hydrogen feasibility study is ongoing, with two further reports being produced later in 2021.