Origin Cancels Hunter Valley Hydrogen Project Citing Slow Growth

Origin Energy, one of Australia’s leading utilities, has announced its decision to abandon the AUD 207.6 million Hunter Valley Hydrogen Hub project, citing slow market development and significant financial and technological risks. The project, a joint venture with fertiliser manufacturer Orica, was poised to be one of the nation’s most advanced hydrogen developments and was scheduled to begin production in 2026.

The decision comes as a surprise, given that the Hunter Valley Hydrogen Hub was one of six projects shortlisted for Australia’s “hydrogen head start” scheme, a federal government initiative aimed at boosting hydrogen production. Despite strong support from both federal and state governments, Origin CEO Frank Calabria explained that the hydrogen market has not progressed as quickly as expected.

“After closely monitoring global hydrogen developments for the past four years, we concluded that the market is developing more slowly than anticipated. As a result, we have decided to cease work on all hydrogen projects,” said Calabria. He acknowledged the disappointment the decision may bring, but emphasised the company’s appreciation for the opportunity to explore the project alongside Orica and with government backing.

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Origin’s exit from hydrogen comes as the company shifts its focus towards other clean energy “initiatives more in line” with its long-term strategy, which includes renewables and battery storage. The company aims to prioritise opportunities that better align with its future goals.

This withdrawal marks a notable retreat from green hydrogen projects in Australia, following similarly cautious steps from other major firms like Fortescue, which recently postponed its ambitious green hydrogen production targets. The situation underscores the broader challenges facing the hydrogen industry, including the need for improved electrolysis technologies and cost efficiencies to make such initiatives viable in the current economic landscape. 

Origin’s decision serves as a reminder that despite government support, the hydrogen sector’s path to mainstream acceptance will be complicated, with timing and capital risks at the forefront.

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