Origin Energy plans to have a feasibility study into a potential 500-megawatt green hydrogen and ammonia production facility at Bell Bay complete by the end of this year, with a focus on "scale" to improve its economic outlook.
Representatives from Origin's future fuels and hydrogen team have been in Tasmania this week to meet with the Coordinator-General and business leaders as part of the feasibility process.
If the facility is deemed feasible based on access to water, renewable energy, ports and markets, then the proposal would move to the detailed design phase and an investment decision from the Origin board next year.
The company is targeting a facility upwards of 500 megawatts to produce about 420,000 tonnes of ammonia using renewable energy, with production from the mid-to-late 2020s.
Origin future fuels general manager Tracey Boyes said having such a large-scale facility was important in establishing a new industry and accessing domestic and international markets.
"The way we think about it is the economics are challenging for green hydrogen and green ammonia, and so one of the ways you improve the economics is through scale," she said.
"If you can have export facilities that therefore have better economies of scale and better economics, you can always peel off some of that supply for domestic use, but it helps the project get off the ground."
Origin has been investigating the potential for green hydrogen production in Tasmania for 18 months, with a state government expressions of interest process resulting in Origin, Fortescue, ABEL Energy and Woodside developing various proposals.
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This week, Fortescue Future Industries signed a deal with TasPorts to exclusively negotiate a lease for a 20-hectare block of land at Bell Bay for a potential 250-megawatt facility.
Both the Fortescue and Origin proposals would focus on ammonia production, created through electrolysis by splitting water to create hydrogen, and then synthesising with nitrogen. The ammonia - created with renewable energy - would then be sold to customers mostly in agricultural sectors to help decarbonise.
Ms Boyes said Origin was not seeking to build a purely production-export facility, but to build connections within Tasmania and the broader domestic market.
"When we think about our projects, we're not overly interested in just doing an export project - using the resources here and shipping everything off," she said.
"What can we produce that will be really attractive for other big businesses or industries around the place to actually come in and partner with us for something that's good for Tasmanians and also good for export."
Origin is also investigating a green hydrogen facility at Townsville and multiple domestic projects in NSW, using renewable energy zones.