ReNu Energy pens definitive green hydrogen project agreement with superannuation giant HESTA
In what is a significant new move in Australia’s plans to develop a world-class “green hydrogen” sector, the nation’s leading superannuation firm HESTA has agreed to work with industry specialist ReNu Energy (ASX: RNE).
Under a definitive platform agreement, ReNu Energy and its wholly owned subsidiary Countrywide Hydrogen Pty Ltd, will work with Hesta to evaluate and co-invest in hydrogen projects to be developed by ReNu Energy.
The platform agreement converts a previously announced term sheet into a document setting out the framework for potential initial co-investment into Countrywide Hydrogen’s Tasmanian suite of hydrogen projects.
Co-investment in hydrogen projects
ReNu Energy chief executive officer Greg Watson said the signing of the new agreement comes after the completion of due diligence studies undertaken by HESTA.
Both parties are now working on transaction designs investigating how to jointly progress the green hydrogen projects through special “asset vehicles”.
“The platform agreement contemplates a series of other agreements covering the development, operation and governance of the green hydrogen projects if acquired by the asset vehicles,” Mr Watson said.
Pro forma versions of these agreements have already been prepared and ReNu is targeting presenting the first of the Tasmanian green hydrogen projects to HESTA for potential co-investment during 2023.
The platform agreement includes number of stages to be completed in the lead up to any decisions being made on co-investment, development and project funding.
This includes the creation of a project specific trust owned on a 50/50 basis to jointly acquire the Green Hydrogen Project from the RNE Group.
HESTA’s role in decarbonisation
HESTA chief investment officer Sonya Sawtell-Rickson said the superannuation powerhouse has a long-term focus on investing in projects that can play a role in Australia’s transition to a lower carbon future.
“We’re looking for opportunities to invest in the development of innovative technologies and businesses at the forefront of decarbonisation. That’s why we’re excited to further deepen our relationship with ReNu Energy through this new framework for potential co-investment opportunities.
“By using our scale and expertise, we aim to support the development of a pipeline of potential projects that can help deliver strong long-term investment returns for members while accelerating the transition to a more sustainable future. In doing so, we’re also supporting an emerging sector that we believe is poised for significant future growth.”
Countrywide has a significant portfolio of green hydrogen opportunities, which the company says are on track for final investment decisions this year.
“Our goal in Tasmania is to create a state-wide ecosystem for the production, distribution and use of green hydrogen and then replicate the model on the mainland,” Countrywide managing director and ReNu Energy executive director, Geoffrey Drucker, said.
Australia’s position in the global hydrogen market
Today’s announcement is great news for Australia and its clean energy development plans.
Federal Minister for Climate Change and Energy, Chris Bowen, has stated that green hydrogen is at the heart of the nation’s vision to become a renewable energy superpower.
Australia has a pipeline of over 100 hydrogen projects estimated to be worth around $230 billion to $300 billion of potential investment.
It has been estimated by the government that this represents close to 40% of all global clean hydrogen project announcements, and underlines Australia’s potential to be among the global leaders.
According to the Business Research Company’s “2023-2032 Hydrogen Global Market Report”, the market will grow from US$13.5 billion (A$20.2 billion) in 2022 to US$15.9 billion (A$23.8 billion) in 2023 at a compound annual growth rate of more than 17%.