Southern Green Gas receives backing from leading venture capital groups towards breakthrough technology for hydrogen export
Leading venture capital investors Artesian Venture Partners (Artesian) and Victorian Clean Technology Fund (VCTF) participated in the capital raise which will advance Southern Green Gas’ product and market development activities as it looks to scale renewable methane and methanol production in Australia.
Artesian is Australia's largest and most active early stage venture capital firm. Through its Clean Energy Seed Fund, Artesian, in collaboration with government owned green bank, Clean Energy Finance Corporation, are investing in novel clean technology companies, with Southern Green Gas the latest addition to its portfolio.
“Artesian is delighted to support a homegrown renewable gas technology. Southern Green Gas is forging the way towards a new export opportunity for Australia.”
VCTF, which similarly targets clean technology enterprises, aims to commercialise solutions that address significant environmental and resource issues such as greenhouse gas emissions. The support for Southern Green Gas aligns with their investment mandate.
VCTF Chair, Joseph Younane, states that “Southern Green Gas is one of the key initiatives in exploring the challenges of creating new fuel sources from renewable energy. VCTF is pleased to be involved in supporting this promising technology and the team behind it.”
Southern Green Gas Managing Director, Rohan Gillespie said: “The investment by Artesian and VCTF further supports the confidence Southern Green Gas has in its technology, which leverages existing infrastructure to deliver clean fuels for use domestically and for export.”
Southern Green Gas’ expansion of its activities come at an important point for the advancement of clean energy in Australia and hydrogen in particular, with governments at all levels prioritising the development of a hydrogen industry aiming to create a new export commodity.
As the most effective hydrogen carrier, renewable methane presents an enormous opportunity for Australia to reach its national objective to be a top three supplier of hydrogen into Asian markets by 2030 and realise its economic stretch target - “H2 under 2” or hydrogen under $2 per kilogram.
By 2050, it is anticipated that the Australian hydrogen industry could create around 7,600 new jobs and up to $11 billion a year in additional Gross Domestic Product.
Next generation renewable energy development company Southern Green Gas Limited (SGG) is pleased to announce it has secured $2.2 million to develop its ground-breaking renewable methane product.
SGG has entered into agreements with leading Australian energy infrastructure company, APA Group (ASX: APA), for the funding and development of a $2.2 million project to demonstrate the production of renewable methane.
Under the agreements, the project will receive $1.1 million in funding from ARENA, as part of ARENA's Advancing Renewables Program. APA will be the recipient of this funding, and will match the ARENA funding with a further $1.1 million. APA has contracted SGG to design, build and test the project.
The project is expected to take two years to complete, and will be located on APA land at the major Wallumbilla gas hub in southern Queensland.
Subject to the successful outcome of the demonstration project, SGG and APA intend to jointly develop commercial renewable methane projects. To facilitate this, SGG and APA have also entered into a Commercialisation Deed whereby APA will undertake the build-own-operate role, on an exclusive basis for ten years. SGG’s role will be to develop the projects, coordinate manufacture of process modules and secure customers for the methane.
Renewable Methane Process
The process combines renewable hydrogen, made from water and solar energy, with CO2 extracted from the air. The CO2 extracted from the air offsets the CO2 emitted when the methane is used, thereby making the whole energy system carbon neutral.
The process is modularised, to facilitate mass manufacture and therefore minimise component and production costs. The project will involve a module as shown diagrammatically below.
Commenting on the initiative, SGG’s Managing Director Rohan Gillespie stated:
“The reason we have chosen methane as the carrier for renewable energy is the ability to utilize the existing gas infrastructure system. The existing gas pipeline network allows us to access customers here in Australia, as well as export customers such as Japan and South Korea, through the existing liquefied natural gas (LNG) system. We believe renewable methane offers the best solution to creating a major new export industry for Australia, leveraging its globally competitive advantage in solar energy.
APA, being the owner and operator of most of Australia’s high pressure gas pipeline system, is the logical partner for SGG. We are delighted to be partnering with them.
We also acknowledge the important contribution from ARENA and its commitment to advancing renewable energy.”
The views expressed herein are not necessarily the views of the Australian Government, and the Australian Government does not accept responsibility for any information or advice contained herein.
The proposed field trial will initially involve the production of renewable hydrogen comprising water production from air and electrolysis from solar power. At a later date the intention is to expand the field trial to include CO2 production from air and combining hydrogen and CO2 in a methanation reactor to produce pipeline quality renewable methane.
The field trial is proposed to be located at one of Enwave’s Victorian network sites in regional Victoria.
Subject to success of the field trial, SGG and Enwave may enter into a Market Development Agreement, where they may jointly pursue Australian renewable gas market opportunities – both hydrogen and methane – using SGG’s technology. This could involve market research and discussions with potential customers, to understand the requirements and size and growth of the market.
Commenting on the agreement, Southern Green Gas’ Managing Director Rohan Gillespie stated “This is an exciting development for SGG. Enwave Australia is a multi-utility that designs, builds, owns and operates water, gas and energy networks for entire communities in Australia. They acknowledge the growing desire of energy users to consider lower carbon-intensive sources, and are well placed to service this demand.”
A prospectus will not be lodged in relation to the offer. Only investors exempt under s708 of the Corporations Act are offered the opportunity to participate in the Offer. An Information Memorandum is available upon request. The closing date is 11 December 2019. K S Capital acts as Financial Adviser and Lead Manager.
Contact either Rohan Gillespie - email@example.com or Greg Wood, K S Capital on +61 (0)416 076 377 or at firstname.lastname@example.org
SGG would like to draw your attention to an opportunity of national significance for Australia. As is widely acknowledged, Australia has a global competitive advantage in the generation of solar electricity in regional areas, in terms of quality (high sunlight intensity, few rainfall days) and quantity (abundant low cost flat land in high sunlight intensity areas). This in turn can allow the production of hydrogen at comparatively low cost.
To capitalise on this advantage and build a new export industry, a means to transport the hydrogen from Australia’s inland regional areas to major markets is required. One solution that is potentially being overlooked is renewable methane.
Renewable methane, produced from the reaction of hydrogen with CO2 extracted from the air, is carbon neutral and being fungible with natural gas can utilise all the existing natural gas infrastructure. That means renewable methane can be piped to the coast using existing pipelines, and shipped overseas through the existing LNG system – potentially to the 40 countries that currently import LNG.
The key technology that unlocks this huge potential is the extraction of CO2 from the air. This technology is moving quickly out of the R&D realm into the commercialisation phase. New adsorbents with superior storage capacity and low energy requirements offer scope to extract CO2 at an all-in-cost less than $50 per tonne.
Renewable methane can solve the intermittency issues with solar generation. It can be produced 24/7 by incorporating hydrogen storage.
Not only can renewable methane be readily reformed back into renewable hydrogen for use in fuel cell vehicles, it can also be used as fuel for existing gas fired power stations. This allows the generation of dispatchable renewable electricity.
Southern Green Gas is proposing the renewable methane solution. It is backed by a team with a deep knowledge of energy markets and technology commercialisation. We have a credible plan to make renewable methane cost competitive. We would welcome the opportunity to discuss this is more detail.
Southern Green Gas has achieved what it believes to be a world’s first – renewable hydrogen produced with sustainably sourced water. This has been demonstrated on the campus at University of Newcastle and announced at the Australian Hydrogen Forum.
Using technology developed by Professor Moghtaderi’s Group at the University of Newcastle, water is extracted from atmospheric air. This becomes a critical feature as the expected location of hydrogen production is in high solar but arid regional areas of Australia. This issue was highlighted in a recent study by Jacobs.
This milestone is a key step for Southern Green Gas as it seeks to realise its business plan to develop renewable methane. Being fungible with natural gas and carbon neutral, renewable methane is a ground-breaking product that could create a completely new industry – seaborne renewable energy.
A copy of the presentation to the Australian Hydrogen Forum is provided below.
Equipment for the renewable hydrogen module, sourced from local and international partners, is installed at the pilot location and commissioning is now underway.
The latest news on Southern Green Gas and the progress of the pilot will be at the Australian Hydrogen Forum, 18-20 September, Sydney. Rohan Gillespie, Managing Director, will be speaking on Day 2 about the pilot progress and successes. Come along to the morning Q&A session on the 19 September to hear the latest news. Find the program here.