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Energy & Utilities

The Bell Bay Powerfuels Project – insights from the CEO Michael van Baarle

16 Oct 2023, by Amy Sarcevic

Earlier this year, ABEL Energy announced it was proceeding with pre-front end engineering work for a large-scale green hydrogen and green methanol production facility in Tasmania – the largest of its kind in the Asia Pacific region.

Deploying a 240MW electrolysis plant – powered by hydro and wind – the project is expected to produce hydrogen primarily as a feedstock for green methanol production, with the balance to supply local industries with hydrogen fuel.

Meanwhile, biomass gasification of residue from nearby plantation forestry will help produce the 300 thousand tonnes of green methanol output anticipated from the site each year.

ABEL Co-founder and CEO Michael van Baarle says the decision to pursue green methanol – a largely overlooked green hydrogen derivative – was an easy one.

“It’s essentially a future proof industry. Human civilisation will always be aligned on the need for synthetic production of hydrogen and carbon compounds. We have seen synthetic hydrocarbons replace aluminium in aircraft, wood in tennis rackets and glass in spectacles.

“Given that these same materials could be made using green methanol produced by combining hydrogen from water and carbon dioxide from the air, they’re also an inexhaustible resource. I expect we will see them replace many more materials in the future,” said Michael.

That said, the technology for extracting carbon dioxide from the air remains prohibitively costly; hence Michael’s decision to derive it from biomass for this project.

To drive costs down further – and avoid impinging on other industries that rely on biomass for their feedstock – he is targeting the lowest value material.

“There is no way we could take any material that could serve as a feedstock for the timber industry, for example. So instead, we target material that is sub-spec. It’s a win-win situation, as it keeps our price points reasonable at the same time,” he said.

The site – the decommissioned Bell Bay Power Station – is also a strategic choice. As a former oil-fired power station, it has its own deep water berth, allowing carriers to come in directly from the ocean and load cargo from their own wharves.

“Instead of bringing oil imports in from the tankers, we will bring in electricity, add carbon oxides from the biomass, and put methanol in tankers for export through the berth,” Michael said.

“It’s a wonderful site. In fact, it is one of the best sites you can imagine for what we are trying to do; and we have an in-principle agreement with the existing owners to purchase it.”

The geographical location is equally appealing, given its green grid and access to abundant plantation forestry.

“Tasmania is one of the perfect starting places for a project of this kind. It can be a low-cost producer compared to other locations and can generate a reasonable volume.

“We think 1 million tonnes could be created here in Tasmania each year without stretching the system. This figure is consistent with the state’s existing targets for new renewable power generation,” Michael said.

As an island state, Tasmania is also perfectly positioned to support custom from the shipping industry – ABEL’s soon-to-be volume market.

Next year, industry leader, Maersk is set to start replacing its big container ships that currently run on heavy fuel oil with 16,000 TEU ships capable of holding 12,500 tonnes of methanol.

Thanks to the multi-million-dollar investment, 24 of these vessels are already on order, due to start coming off the line next year.

“It’s exciting to see demand coming in now from the shipping industry – particularly the container ships led by Maersk,” Michael said.

“They’ll use 40-50,000 tonnes of methanol per year, with 12.5k tonnes in one tank-full – so they’ll only need to refuel every couple of months. They can run on diesel as well, but their stated intent is to run on green methanol.”

Michael hopes the shipping industry’s foray into cleaner fuel will set a precedent for other transport industries, like air and rail, which he believes are good candidates for methanol, used either directly or as a feedstock for making more complex fuel.

“Put it this way, they won’t need to die wondering whether methanol is possible for large scale logistics, as shipping will pave the way and show them,” he said.

“Sure, aircraft will need jet fuel for the foreseeable future given its high energy density, but there are good prospects for using green methanol to make the fuel and thereby improve its GHG emissions profile.

“Methanol is a high performance fuel already used in drag racing, so there would be benefits to gain in other engine applications as well, especially when you can’t electrify an application with green power. Drag racers know it allows vehicles to go much faster – you just need more of it.”

Mining, too, will likely have an increased appetite for green methanol, with the Brazilian iron ore sector already canvassing the option to build new carriers that run on the fuel.

“Some miners use hundreds of millions of litres of diesel each year. Some parts of their operation can be electrified, but for those which can’t methanol is a worthy replacement,” Michael said.

China’s consumption of green methanol is also expected to rise, with the country now broadening the range of chemicals that can use methanol as a feedstock.

Anticipated demand aside, Michael says the project is progressing well, with front end engineering design or FEED to commence in the next month or so.

“We are in the process of selecting a contractor to carry out the FEED, which is a 10-12 month process. We hope that will be complete by the third quarter of next year, with financial close expected by the end of the year, or early 2025.

“This will give us a shot at commencing operations in 2027.”

Talking more about the project, Michael van Baarle is due to the present at the upcoming Bell Bay Major Projects Conference, hosted by Informa Connect.

This year’s event will be held 5-6 December at the Hotel Grand Chancellor, Launceston.

Learn more and register your place here.

About ABEL Energy

ABEL Energy is an industrial project development company focussing on the production and use of green hydrogen primarily for the production of green methanol. Its flagship project is the Bell Bay Powerfuels Project in northern Tasmania.

The company is led by some of the most experienced synthetic fuel experts in Australia, with expertise in chemical engineering, fuel applications and corporate development.

It is a member of the Methanol Institute, the Australian Hydrogen Council, the Bell Bay Advanced Manufacturing Zone and CO2 Value Australia.

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