BP announced on Wednesday that it will acquire 40.5% equity stake in the Asian Renewable Energy Hub (AREH), potentially the world’s largest renewables and green hydrogen hubs. The acquisition will make BP operator of the US$36 billion project.
The green hydrogen hub sits in the Pilbara region of Western Australia, one of the largest mining areas in the world, and is expected to supply renewable power to local consumers there while producing green hydrogen and green ammonia for the domestic Australian market and exporting to major international users.
BP said the development of onshore wind and solar power generation in multiple phases is on the cards for AREH. A total generating capacity of up to 26 gigawatts (GW) is eyed, the equivalent of producing over 90 terawatt-hours per year.
According to BP’s executive vice president of gas and low carbon energy, Anja-Isabel Dotzenrath, “AREH is set to be one of the largest renewable and green hydrogen energy hubs in the world and can make a significant contribution to Australia and the wider Asia Pacific region’s energy transition.”
At peak capacity, BP said AREH would be able to produce some 1.6 million tonnes of green hydrogen or 9 million tonnes of green ammonia, per annum. Situated on a 6,500-square kilometre site, AREH is already in a highly advantaged position with access to abundant solar and wind resources with consistent output.
Added to that, AREH is expected to abate around 17 million tonnes of carbon in domestic and export markets annually, equating to roughly 0.5 gigatonnes (Gt) of carbon savings over the lifetime of the project.
“AREH truly reflects what integrated energy is – combining solar and onshore wind power with hydrogen production and using it to help transform sectors and regions. It also reflects our belief that Australia has the potential to be a powerhouse in the global energy transition, benefitting from both its existing infrastructure and abundant renewable energy resources,” Dotzenrath commented.
Under the terms of the agreement, BP will acquire the 40.5% stake and assume operatorship from July 1, 2022, subject to approvals.
The other partner shareholders in AREH will continue to be InterContinental Energy (26.4%), CWP Global (17.8%) and Macquarie Capital and Macquarie’s Green Investment Group (15.3%).