28 August 2024
Southland Business Chamber Responds to Meridian Energy’s Decision to Pause Southern Green Hydrogen Project
The Southland Business Chamber acknowledges Meridian Energy’s decision to pause the Southern Green Hydrogen project. This initiative, central to New Zealand’s renewable energy strategy, was set to become one of the world’s largest green hydrogen production facilities.
Meridian Energy has attributed the pause to global inflationary pressures, increased renewable energy costs, and the significant capital investment needed for hydrogen facility construction. Additionally, the slower-than-expected development of market mechanisms to bridge the gap between production costs and customers’ willingness to pay a premium price has posed challenges to the project’s viability.
While Meridian still recognises New Zealand’s strong potential in the global green hydrogen market, they have concluded that current economic conditions are not conducive to proceeding. The company remains committed to monitoring the market and continuing negotiations as conditions improve.
The Southern Green Hydrogen project was envisioned as a transformative opportunity for Southland, leveraging the Manapōuri hydroelectric plant to produce green hydrogen or ammonia for domestic use and export, particularly to Asian markets. Despite the pause, the Chamber remains optimistic about Southland’s future in renewable energy. The region’s strategic advantages, including its established renewable energy infrastructure and potential for large-scale production, continue to position Southland as a key player in New Zealand’s transition to a low-carbon economy.
Southland Business Chamber CEO Sheree Carey stated, “We recognise the extensive work and partnerships formed over the past few years as part of this project. These efforts have reinforced Southland’s role in the renewable energy landscape, and we are confident that, when economic conditions align, this project will be revisited with renewed focus and commitment.” She added, “The Chamber will continue to support initiatives that drive economic diversification and leverage Southland’s natural advantages.”
Meridian has not ruled out future collaborations with the project’s partners. The relationships established during this project have created a strong foundation for future opportunities in the green hydrogen sector. The Southland Business Chamber stands ready to support any future endeavours that contribute to the region’s economic resilience and sustainability.