BP Confirms Exit from Australia’s 26GW Renewable Energy Hub

PVTIME – Oil and gas giant BP has confirmed that it will withdraw from the Australia Renewable Energy Hub (AREH) project, which is planned to combine wind, solar and green hydrogen in Western Australia and has an expected capacity of 26GW. Having acquired a 40.5% stake in the project and taken on the role of operator in 2022, the company has informed its partners that it will step back as both operator and shareholder in order to refocus on its upstream oil and gas activities.

Picture: AREH

According to a BP spokesperson, the decision reflects a recent strategic reset, whereby the firm will develop its upstream and downstream oil and gas operations while making more measured investments in the transition to a lower-carbon economy. This follows BP’s earlier announcement this year of a final scaling back of its renewable energy efforts, including plans to reduce spending in the sector and prioritise oil and gas production.

Despite its exit, BP has emphasised the potential of the AREH project to decarbonise Western Australia’s mineral-rich Pilbara region. The company has also committed to working with partners to ensure a smooth and efficient transfer of ownership.

Formerly known as the Asian Renewable Energy Hub, a name chosen to reflect the ambition to export large volumes of green hydrogen and ammonia to Asian markets, the project aims to use 26GW of solar and wind capacity to produce these clean energy carriers. At full capacity, the project could generate around 1.6 million tonnes of green hydrogen or 9 million tonnes of green ammonia each year.

Although the project could boost the economy of Western Australia, cement its position as a major renewable energy centre, and establish it as a green ammonia supplier to Asia, it has faced challenges since it was first proposed in 2014. After securing environmental approval from the state government, the project was halted by the federal government in 2021 due to environmental concerns.

In May 2024, the Labour government, which took office in 2022 and was recently re-elected, granted the AREH “major project status” to support its development. This provides access to assistance from the Major Projects Agency in securing federal approvals. Nevertheless, BP’s departure from AREH and the wider Australian hydrogen market deals another blow to the nation’s aspirations of becoming a “renewable energy superpower”.