Emerging renewables energy business, Sweetman Renewables Limited, has signed a lucrative, multi-million dollar joint venture agreement with CAC-H₂ Private Limited of Singapore to establish a Hydrogen Production Centre of Excellence in the NSW Hunter Valley.
The $15 million deal aims to establish Australia’s first wood fed hydrogen production plant, and the country’s largest green bio-hydrogen production eco-friendly hub.
Sweetman Renewables and CAC-H₂ joint venture
CAC-H₂ brings its effectively proven gasification technology that facilitates converting woodchip into 99.999% pure hydrogen via the company’s proven proprietary process.
CAC-H₂ brings Off-take Agreements for 100% of Sweetman Hydrogen and Biochar production. The deal is likely to create 40 full time jobs at the new facility to be named Hunter Valley One.
The venture involves investment from CAC-H₂ for 80% ownership of the new enterprise to establish the first two production lines adjacent to Sweetman’s Millfield timber mill.
Sweetman will provide the Biomass Feedstock, EPC engineering services and land access in return for 20% equity. Sweetman will provide 30,000 tonnes of wood biomass per annum.
The initial deal will produce an estimated AUD $170m in revenues over 15 years, based on a conservative wholesale price estimate of AUD $6 per kilogram.
Construction is due to commence soon given planning applications have been approved.
Commentary on Sweetman and CAC-H₂ joint venture
Mr Arman Massoumi, Director of CAC-H₂ Group said, “We are excited to partner with Sweetman to establish the first wood to hydrogen, and largest green Bio-Hydrogen Production Eco-Hub.”
“We initially planned to start with just two production lines but due to large demand from both Japan and Korea, we envisage to quickly scale up the Sweetman operation to multiple lines producing Hydrogen and Biochar for export markets via a new facility at the Newcastle Port.”
The Hunter region of NSW is set to become the home of one of the state’s first green hydrogen hubs with the NSW Government committing at least $70 million to their development.
These Hydrogen hubs will facilitate providing groups of hydrogen users common infrastructure for the local production, utilisation and distribution of hydrogen.
They will reduce costs by delivering hydrogen in a coordinated fashion.
Developing green hydrogen hubs aligns with the NSW Renewable Energy Zones under the Electricity Infrastructure roadmap, ensuring they become thriving precincts.
Sweetman Renewables’ Director Garry Millar said the joint venture will facilitate paving the way for a viable, new eco-friendly future for the Hunter Valley.
“We have heard the call from both State and Federal government to make the Hunter Valley a Centre of Excellence for the production of Hydrogen,” said Garry Millar.
“The New plant will not only act as a showcase for the proven technology.”
“It will create new jobs in construction, production, transportation, materials handling and service and maintenance, all of which will be sourced from within the Newcastle area.”
Mr Glenn Davies, Chief Executive Officer of CAC-H₂ said, “Over the next 2 years our joint venture will establish new Hydrogen Hubs in every State in Australia.”
“Sweetman has already obtained expressions of interest to establish another Hydrogen hub at Newcastle Port and additional hub centres in Queensland and Victoria.”
Projections about Hydrogen adoption
The International Energy Agency stated that demand for hydrogen needs to more than double from its existing level to 212m tonnes by 2030 if the world is to attain climate change goals.
The market size for hydrogen in 2022 is projected to be $154.74 billion.
Market expectations by the year 2050, driven by a burgeoning world wide demand for zero-carbon emissions, the hydrogen market is expected to be valued at $12 trillion.
Sweetman Renewables is conducting a pre-IPO capital raise ahead of its debut on the ASX.
Boutique corporate advisor Barclay Pearce Capital is conducting the raise, given their expertise in the green energy sector. Sweetman aims to leverage its unique access to biomass to become an Australian renewable energy powerhouse of green hydrogen production.
