bp will acquire a 40.5% equity stake in and to become operator of the Asian Renewable Energy Hub (AREH), which has the potential to be one of the largest renewables and green hydrogen hubs in the world.
Based on the development of world-scale renewable power generation, AREH, in the Pilbara region of Western Australia, intends to supply renewable power to local customers in the largest mining region in the world and also to produce green hydrogen and green ammonia for the domestic Australian market and export to major international users.
AREH has plans to develop onshore wind and solar power generation in multiple phases to a total generating capacity of up to 26 gigawatts (GW)—the equivalent of producing more than 90 terawatt hours per year, which is around a third of all electricity generated in Australia in 2020.
At full capacity, AREH is expected to be capable of producing around 1.6 million tonnes of green hydrogen or 9 million tonnes of green ammonia, per annum. Situated on a 6,500-square kilometer site, AREH is already in a highly advantaged position with access to abundant solar and wind resources with consistent output.
The Pilbara is a globally competitive and energy-intensive mining region with substantial energy demand and carbon emissions. At full capacity, AREH is expected to abate around 17 million tonnes of carbon in domestic and export markets annually, which would equate to roughly 0.5 gigatonnes (Gt) of carbon savings over the lifetime of the project.
When fully developed, AREH could provide significant net renewable generating capacity for bp as well as making a material contribution to its strategic aim to capture a 10% share in core hydrogen markets globally.
First proposed in 2014, the AREH project has been developed to date by partners that currently comprise InterContinental Energy, CWP Global and Macquarie Capital and Macquarie’s Green Investment Group.
Under the terms of agreement, bp will acquire a 40.5% interest in the project and will assume operatorship from 1 July 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%).