Ministerial Briefing
To
Hon Dr Megan Woods, Minister of Energy and Resources
Title of briefing
EECA advice on hydrogen in New Zealand
Date
23 October 2019
EECA reference
EECA 2019 BRF 032
Response required
11 November 2019
number
by:
EECA priority
Routine
Consultation
N/A
Attachments
N/A
EECA contacts
Position
Name
Mobile Number
Work Number
1st Contact
Chief Executive
Andrew Caseley
04 470 2201
✔
Responsible
Jesse Corlett
04 470 2213
manager
Principal author
Tyler Byers
04 495 8255
Information withheld under
section 9(2)(a) of the Official
Information Act 1982
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Purpose
1.
This paper provides EECA’s preliminary advice on hydrogen in New Zealand. This is
intended to contribute to your ongoing consideration of the potential role for hydrogen in
New Zealand’s energy system.
Context
2. MBIE is publicly consulting on a green paper titled
A Vision for Hydrogen in New Zealand as
part of your broader Renewable Energy Strategy work programme. The paper seeks
feedback on the potential role of “green” hydrogen in New Zealand to inform the
development of a national hydrogen strategy or roadmap.
3.
MBIE developed the Green Paper in col aboration with other government agencies, industry,
academics and other key stakeholders. While EECA was not on the cross agency hydrogen
working group, we have been engaging with MBIE on this issue since the publication of the
Green Paper.
Recommended actions
EECA recommends that you:
a.
Note EECA’s views as set out in this paper
b. Indicate whether you wish to discuss these views at our next meeting on 11 November 2019
Agree / Disagree
Andrew Caseley
Hon Dr Megan Woods
CHIEF EXECUTIVE
MINISTER OF ENERGY AND RESOURCES
_ _ / _ _ / _ _
_ _ / _ _ / _ _
MINISTERIAL BRIEFING | 18/10/2019
2
link to page 3 link to page 3 link to page 3
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EECA’s views
1.
EECA’s preliminary views on the Green Paper are guided by our purpose and role. We are
required to promote the uptake of energy efficiency and renewable energy to improve the
economic, environmental and social performance of energy and energy systems.
1 We are also
informed by the Concept Consulting report we co-sponsored (published in February 2019)
.2
This study considered whether hydrogen technologies could have a role to play in
decarbonising the New Zealand economy, or as a means to decarbonise other economies.
2. Our initial views on the Green Paper, provided for your consideration, are as fol ows:
a.
EECA supports the development of a national hydrogen strategy.
b. EECA’s position is technology and fuel neutral – that is, al potential options (including
hydrogen) should be considered on a level playing field to identify the most cost-
effective solutions to decarbonise our energy emissions. There are a range of
technology solutions for decarbonisation with trade-offs between them that may need
to be made. A hydrogen strategy should ensure any government financial support for
hydrogen projects is suitably proportional to, and considered alongside support for
other decarbonisation projects or technologies, using the same investment criteria.
c.
In principle, EECA supports development of hydrogen that is economic and represents
cost-effective emissions reduction in the energy system. This might include green
hydrogen produced from renewable energy sources, and blue hydrogen – i.e. produced
from hydrocarbons in conjunction with carbon capture and storage (CCS) or carbon
capture and use (CCU). In principle, EECA does not support hydrogen produced from
hydrocarbons (brown and grey), even if a ‘staged approach’ to zero emissions
hydrogen is taken. There is a risk of locking in emissions from significant investment
in higher carbon emitting energy sources. Supporting green hydrogen, and
potential y blue hydrogen, avoids this risk by implementing a genuinely low-emissions
and renewable energy powered pathway.
d. EECA has concerns about the energy losses in the end to end hydrogen production
process, particularly the conversion processes. Almost three times more renewable
energy is required to power a hydrogen vehicle than an electric vehicle, and
approximately twice as much renewable energy is required to fuel a hydrogen boiler
or heater, compared to an electric boiler or heat pump.
3 While there is technical
1
Energy Efficiency First Overview Report, page 5
2
https://www.eeca.govt.nz/news-and-events/news-and-views/new-study-on-hydrogen-technologies-released/
3
Hydrogen in New Zealand report 2019, Concept Consulting, page 3
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potential for improving the efficiency of hydrogen conversion, these losses are likely to
remain significantly higher than losses in direct electric options.
e.
The production of green hydrogen needs to be considered against al other potential
options for use of NZ’s renewable energy sources. The often-cited proposition of
‘excess renewables’ as a supply of electricity for hydrogen production needs further
exploration and evidence. Our assessment is that under current market and economic
settings, an excess of cheap renewable electricity is unlikely to arise. This is due to the
required financial returns from investment in generation in the New Zealand
electricity market.
f.
EECA believes the potential applications for hydrogen that may become
cost-competitive with electrification in the near future include heavy and long distance
road freight, continuous onsite freight loading and operating, and meeting energy
demands for remote, off grid locations. The use of electricity is more suitable for light
vehicles.
g.
EECA supports the Productivity Commission’s finding that electrification of transport
and process heat are two of the best opportunities for New Zealand to transition to a
low-emissions economy. Therefore, any hydrogen strategy should be careful y
positioned to avoid causing unintended impacts on investment decisions of viable
alternative options such as direct electrification.
h. EECA notes the risk of path dependence (i.e. prematurely selecting or prioritising
certain solutions or ‘picking winners’). The Green Paper recommends government
invests in removing barriers to hydrogen deployment. Large scale development of
hydrogen in New Zealand would require development of an entirely new supply chain.
An investment of this scale could create path-dependencies that might not result in the
most optimal, low-cost transition path. This reinforces the need for a technology-
neutral approach to domestic abatement that al ows emissions prices to act as a signal
for investment.
i.
EECA recommends directing any government support towards the areas of greatest
opportunity for hydrogen that can be shown to have a genuine advantage over
alternatives. Commercial demonstration projects that include government funding
need to be transparent with findings and information to accelerate understanding and
build the evidence base.
EECA activity
3.
MBIE’s Green Paper notes chal enges and opportunities relevant to EECAs current role in this
space. Two of EECA’s programmes – the Technology Demonstration Programme and the
Low Emission Vehicles Contestable Fund (LEVCF) – are open to applications for hydrogen
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projects. These programmes are tasked with demonstrating and de-risking technology in a
commercial environment to drive market diffusion.
4. EECA has co-funded a hydrogen pilot with the Ports of Auckland and its partners for one bus
and up to three vehicles in Round Five of the LEVCF (note the LEVCF excludes funding for the
separately funded electrolysis plant). EECA wil continue to explore opportunities to engage
with the local hydrogen industry where we are able to do so.
Next steps
5.
EECA would welcome the opportunity to discuss the contents of this briefing at our next
meeting with you on 11 November 2019.
6. EECA wil continue to engage with MBIE as it considers submissions on the hydrogen Green
Paper.
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Aide Memoire
Title
Follow-up advice on hydrogen in New Zealand
Date
12 February 2021
To
Hon Dr Megan Woods
Minister of Energy and Resources
From
Andrew Caseley
Chief Executive
EECA reference
EECA MEMO 065
number
Attachments
Appendix One: Update on government hydrogen projects
Purpose
1.
To update you on EECA led government hydrogen projects and provide information on the
current state of hydrogen in New Zealand, particularly in the context of heavy transport. This
is intended to support the role for hydrogen in New Zealand’s energy system.
Context
2.
In October 2019, EECA provided you with advice on hydrogen in New Zealand following the
publication of MBIE’s green paper titled
A Vision for Hydrogen in New Zealand (EECA 2019
BRF 032).
3.
Since this advice, several firms in New Zealand have invested in hydrogen projects and trials.
Additionally, hydrogen has received increased media attention as a possible solution for
decarbonising the heavy freight industry, with some misrepresentation of government
commitments (EECA 2020 BRF 055 addressed these issues).
4.
With the release of the Climate Change Commission’s 2021 Draft Advice for Consultation, we
expect to see more conversations around the appropriate package of policies and technologies
for decarbonising New Zealand’s heavy freight fleet. The Commission’s Draft Advice
recommends that use of low carbon fuels, such as biofuels and hydrogen, will need to increase
for New Zealand to meet its draft emissions budgets, particularly in heavy trucks, trains,
planes, and ships.
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5.
Through the delivery of hydrogen projects as part of the Low Emission Vehicles Contestable
Fund (LEVCF) and the $3bn ‘shovel ready’ infrastructure programme, EECA has insight into
the current state of green hydrogen deployment in New Zealand. This aide memoire provides
information on:
a. An update on Government-supported hydrogen projects, and
b. The current state of the hydrogen market for heavy transport in New Zealand.
Update on government hydrogen projects
Low Emission Vehicles Contestable Fund (LEVCF)
6.
Ports of Auckland received $250k funding as part of round five of the LEVCF to purchase one
hydrogen bus and up to three hydrogen cars as part of the wider hydrogen demonstration
project in Auckland. It is expected that the bus will be delivered in early 2021.
7.
Additionally, as part of round 9, EECA has provisionally approved $500k for Hyundai to
purchase and deploy a fleet of five medium duty (19 tonne) hydrogen trucks.
IRG hydrogen refuelling network
8.
The Government provisionally agreed to $20 million of ‘shovel ready’ funding for Hiringa
Energy to establish a hydrogen refuelling network.
9.
There were significant risks to the project as it was proposed that could be mitigated through
several proposed options. IRG Minister’s approved a revised scope of $20m funding for a
combination of four fuelling stations and up to twenty heavy freight hydrogen trucks.
IRG electric ferries project (previously electric and hydrogen ferries)
10. As part of the $3bn ‘shovel ready’ infrastructure programme, Cabinet provisionally approved
a project submitted by EV Maritime, Fullers360 and Vector to pilot one electric ferry and one
hydrogen-ready hybrid ferry in Auckland and one electric ferry in Tauranga. However,
following an initial assessment as part of the due diligence process, this project has been
narrowed to cover two electric ferries (i.e. no hydrogen ferries).
Provincial Growth Fund (PGF)
11.
In March 2020, the PGF announced that it was investing $19.9m in a hydrogen production
facility proposed by Hiringa Energy. The hydrogen would be used to power the Ballance Agri-
Nutrients’ Kapuni plant. The PGF is still in negotiation with Hiringa Energy on final contract
arrangements.
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Hydrogen heavy transport market analysis
Green hydrogen has potential for use in the heavy transport industry
12. EECA supports the development of ‘green’ hydrogen (produced from renewable electricity)
that is economic and can cost-effectively reduce emissions. EECA’s position is that heavy
transport remains the best near-term energy-use opportunity for hydrogen in New Zealand.
13. Growing policy commitment and global investment have the potential to make hydrogen a
commercially viable low-carbon alternative to fossil fuels in the future.
14. At present, hydrogen is expensive to deploy in New Zealand relative to its carbon abatement
impact. The emissions reduced from switching one truck from diesel to hydrogen is
approximately 220 tonnes of CO2e per annum and equates to an incremental abatement
reduction cost of approximately $800 per tonne of CO2e.1
15.
For green hydrogen to be a viable and economic replacement for diesel in heavy transport in
New Zealand, it will require continued improvements to electrolyser and hydrogen fuel cell
technologies, as well as significant reductions in the capital cost of the technology and the
price of electricity. Technology factors will be determined by global policy, investment and
market developments outside New Zealand because we are a technology taker.
Deployment of hydrogen in New Zealand still remains in the demonstration phase
16. However, demonstration projects in New Zealand have the potential to provide valuable
safety, regulatory, technical and policy lessons for Government. Perceived or actual risk for
first adopters of hydrogen technology is high. Removal of barriers and de-risking hydrogen
technology will ensure we can attract international technology suppliers and support the
deployment of hydrogen infrastructure at greater scale in the future.
17.
To effectively de-risk hydrogen, EECA and other government agencies need to ensure that the
creation of knowledge and insights from government-funded projects continue to inform
development of policy making and future investments by the Crown.
There are significant challenges for the commercial scale deployment of green hydrogen for
heavy transport
18. Beyond the demonstration phase, there are significant economic and commercial challenges
in establishing the required supply chain and distribution network infrastructure and growing
a viable domestic offtake market.
1
While noting that electric trucks of this size are not currently commercially available, replacing a diesel truck
with an electric truck would have an abatement cost of approximately $400 per tonne of CO2e.
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19. Figure 1 presents EECA’s estimate of the current relative costs between hydrogen and diesel
for delivered fuel at the pump and the capital cost of a heavy duty truck.
20. The cost of hydrogen is 2 to 3 times that of diesel for the same distance travelled. Additionally,
the upfront capital cost of a truck is 2 to 3 times that of an equivalent diesel truck.
Delivered fuel
Heavy duty truck (50 tonne)
Green hydrogen
$15.79 kg
$750k
Diesel
$0.85 litre
$300k
Cost Delta
2.7x
2.5x
Figure 1: Comparative cost of delivered hydrogen and diesel for heavy transport.
21. We understand from discussions with heavy road freight operators that they compete on tight
margins and cost is a significant driver to profitability of these businesses and their customers.
22. Figure 2 presents EECA’s estimate of the current relative costs of transport for a very heavy
freight vehicle travelling the average annual distance of 150,000km per year.2 The current
cost of using a hydrogen heavy duty truck is $2.88/km compared to $1.65/km for an
equivalent diesel fuelled heavy duty truck. This represents a marginal cost of $1.8m ($184k
per annum over 10 years).
23. Road User Charges (RUC) are a significant ongoing operating cost for heavy duty road freight
vehicles. If RUC was excluded from a hydrogen heavy duty truck, the marginal cost would be
$0.61/km or $91,500 per annum.
2
This is expressed as the cost per unit of transportation for vehicle kilometres travelled ($/vkt or dollars per
vehicle kilometres travelled) – a key metric for the cost-effectiveness of providing transport services.
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$3.00
$2.50
$1.23/km incl RUC
$2.00
$0.61/km excl RUC
-
Electrolyser Capex and balance of
$1.50
plant $3m
$/vkt
- Electricity $85/MWh
- Electrolyser Opex 3% of capex p.a
$1.00
- Refuelling Capex $2.5m
- Refuelling Opex 5% of capex p.a
- Electrolyser efficiency 55 KWh/ kg
of H2
$0.50
- FCEV Capex $0.7m
- FCEV 8.0kg/100km
- Diesel Capex $0.3m
$0.00
- Diesel 55L/100km
Hydrogen
Diesel
- Cost of Capital 7% p.a
- Life 10 years
Fuel (at the pump)
- Truck 150,000km per year
Truck (including O&M)
Road User Charge
Figure 2: Relative costs for a very heavy freight vehicle travelling 150,000km per year.
24. The main barriers to green hydrogen reaching cost parity with diesel as a heavy transport fuel
in New Zealand are:
a. The current high capital cost of electrolysers and hydrogen fuel cell vehicles;
b. The delivered price of hydrogen at the pump due to the cost of distribution
infrastructure and supply chains;
c. High cost of renewable electricity supply relative to other countries with lower cost
solar and wind and the losses incurred in producing hydrogen;3
d. The current low price of competing fuel and vehicle technologies such as diesel; and
e. A range of technical, safety, compliance, certification and regulatory gaps associated
with hydrogen.
25.
3
Almost three times more renewable energy is required to power a hydrogen vehicle than an electric vehicle.
Information withheld under
section 9(2)(b)(ii) of the Official
Infromation Act 1982.
AIDE MEMOIRE | 9/02/2021
5
Aide Memoire
Title
Market insights based on EECA led hydrogen projects
Date
14 December 2021
To
Hon Dr Megan Woods,
Minister of Energy and Resources
From
Andrew Caseley,
Chief Executive
EECA reference
EECA MEMO 091
number
Attachments
Appendix One: Relative fuel and capital costs for heavy transport
Appendix Two: Review of Zero-Emission Bus & Charger Trials
Purpose
1.
To update you on EECA led Government-supported hydrogen projects and provide market
insights on various uses of hydrogen in New Zealand, particularly in the context of heavy
transport.
Context
2.
With the release of the Ministry for the Environment’s
Te hau mārohi ki anamata
Transitioning to a low-emissions and climate-resilient future for consultation, we expect to
see more conversations around the role of hydrogen in a low-emissions economy, and around
the appropriate package of policies to kickstart it where it is the feasible option.
3.
EECA has been working with several New Zealand firms on hydrogen demonstration projects
through the Low Emission Vehicles Contestable Fund (LEVCF) and the $3bn ‘shovel ready’
Covid Recovery Fund. Demonstration projects in New Zealand provide valuable safety,
regulatory, technical, commercial and policy lessons for government and the market. This
aide memoire provides information on:
a. An update on EECA led Government-supported hydrogen projects, and
b. Related insights on the hydrogen market for heavy transport in New Zealand.
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Update on EECA led Government-supported hydrogen projects
Ports of Auckland hydrogen and electric buses
4.
Ports of Auckland received $250k funding as part of round five of the LEVCF to purchase one
hydrogen bus and up to three hydrogen cars as part of the wider hydrogen demonstration
project in Auckland.
5.
In October 2021, Auckland Transport completed a review of several trials of zero-emission
buses (battery electric and hydrogen fuel cell electric buses). Key insights are outlined below,
and the full report is attached as Appendix Two.
6.
Initial results show that battery electric technology currently significantly outperforms
hydrogen as it is better developed, easier to implement and offers greater value for money. In
buses, hydrogen is currently more expensive than electric in terms of both the capital cost
(around 50% more expensive) and fuel costs (3-4 times more expensive).
7.
In addition to the capital and fuel costs for hydrogen, key concerns for bus operators as we
transition to a low-emissions economy include the economic and land impacts of installing
EV charging infrastructure, and the availability of trained drivers.
Hyundai hydrogen trucks
8.
As part of round nine of the LEVCF, Hyundai received $500k funding to purchase and deploy
a fleet of five medium duty (19 tonne) hydrogen trucks. The first of these trucks has arrived
with the rest expected to arrive in New Zealand in 2022.
9.
Hiringa and TR Group hydrogen refuelling network and trucks
10. As part of the $3bn ‘shovel ready’ Covid Recovery Fund, Hiringa Energy received a $16m loan
from the government to establish a hydrogen refuelling network.
11.
The Government supported project will now involve four 1 MW green hydrogen production
and refuelling stations in the key logistics hubs of Hamilton, Palmerston North, Tauranga,
and South Auckland. This will form part of a total $50m proposed network investment which
will underpin a commercial demonstration of the viability of zero emission road freight with
100% coverage across the main North Island freight routes.
Information withheld under section
9(2)(b)(ii) of the Official Information
Act 1982
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12. In October, Hiringa Energy’s land use consent application was approved for the Palmerston
North site and construction is expected to begin in January 2022.
13. In addition, TR Group received $4 million in co-funding from the COVID Response and
Recovery Fund (CRRF) and an additional $2 million in co-funding from EECA to purchase 20
heavy freight (i.e., above 50 tonnes) hydrogen trucks from Hyzon (a US based FCEV truck
conversion company using DAF vehicles).
14.
15.
The first four trucks will be delivered to Hyzon for conversion in March 2022 and we expect
them to be available for road testing in New Zealand in June 2022. This is to ensure they meet
the necessary design and performance specifications for the freight routes under New Zealand
conditions.
Information withheld
under section 9(2)(b)(ii)
of the Official Information
Hydrogen heavy transport market analysis
Act 1982
Hydrogen is expensive to deploy in New Zealand relative to its carbon abatement impact
16. EECA supports the development of ‘green’ hydrogen (produced from renewable electricity)
that is economic and can cost-effectively reduce emissions. EECA’s position is that heavy
transport remains a promising near-term energy-use opportunity for demonstration of
hydrogen in New Zealand.
17.
To deliver significant reductions in the capital cost of the technology and related fuel cost, a
viable and economic green hydrogen market for heavy transport will require continued
improvements to electrolyser and hydrogen fuel cell technologies. It will also require lower-
cost new build renewable electricity generation to provide cheaper electricity (see Appendix
One for relative fuel and upfront capital costs for heavy transport).
18. Technology factors will be determined by global policy, investment, and market developments
outside New Zealand because we are a technology taker. EECA is encouraged by
improvements in electric vehicle class freight technologies, and we are keeping a watching
brief on international vehicles manufacturer developments.
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The majority of public transport can be electrified without hydrogen
19. Auckland Transport’s Grid Impact Study undertaken together with WSP and Vector Limited
identified an ability to electrify up to 88% of all bus networks serviced with BEV’s and
overnight depot charging.
20. In November 2021, Auckland Transport announced the purchase of a further 152 battery
electric buses to be deployed across four years from October 2022. These will replace around
12 per cent of the Auckland ICE bus fleet and reduce Auckland Transport’s greenhouse gas
emissions by an estimated 11 per cent annually.
There are significant challenges for the commercial-scale deployment of green hydrogen
21. Beyond the demonstration phase, there are significant economic and commercial challenges
in establishing the required supply chain and distribution network infrastructure to grow a
viable domestic offtake market for hydrogen.
22. The main barriers to green hydrogen reaching cost parity with diesel as a heavy transport fuel
in New Zealand are:
a. The current high capital cost of electrolysers and hydrogen fuel cell vehicles;
b. The high delivered price of hydrogen at the pump due to the current higher cost of
distribution infrastructure and related supply chains;
c. The cost of producing hydrogen due to the high cost of grid supplied renewable
electricity relative to other countries with dedicated lower-cost solar and wind
generation for the production of hydrogen together with the substantial energy
losses incurred in producing hydrogen and then using hydrogen in FCEV’s;1
d. The current lower price of competing fuel and vehicle technologies such as diesel
and ICE’s; and
e. A range of existing technical, safety, compliance, certification, and regulatory
challenges associated with the early adoption of hydrogen.
23. The hydrogen projects being supported will help further identify the cost differentials
necessary to be overcome to see widespread adoption as well as the technical, safety,
compliance, certification, and regulatory challenges to be overcome.
1
Almost three times more renewable energy is required to power a hydrogen vehicle than an electric vehicle.
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Appendix One: Relative fuel and capital costs for heavy transport2
Fuel cost (per kilometre)
Capital cost
Diesel
$0.51 - 0.78
$0.350m
Electric
$0.21 - 0.30
$0.871m
Green hydrogen
$1.02 - 1.29
$1.213m
Figure 1: Comparative cost for buses.3
Fuel cost (per kilometre)
Capital cost
Diesel
$0.63
$0.250m
Electric
$0.50
$0.500m
Green hydrogen
$1.40
$0.750m
Figure 2: Comparative cost for heavy trucks.4
2
Note these figures do not capture the total cost of ownership. They exclude maintenance and insurance costs,
road user charges, duty cycle factors and residual costs.
3
See Auckland Transport report attached as Appendix Two for a comprehensive breakdown of bus costs.
4
All fuel costs and capital cost for the hydrogen and diesel truck based on EECA market insights. Capital cost for
electric trucks is extrapolated from cost of a 19-tonne electric truck as electric trucks of this size are not
currently commercially available.
AIDE MEMOIRE | 14/12/2021
5
Aide Memoire
Title
Clarifying public reporting about Hiringa’s shovel-ready project
to establish a hydrogen refuelling network
Date
11/12/2020
To
Hon Dr Megan Woods
Minister of Energy and Resources
From
Andrew Caseley
Chief Executive
EECA reference
EECA 2020 BRF 055
number
Context
1.
On 10 December Energy News published a story1 about Hiringa’s hydrogen roll-out plans,
which contained material errors. Specifically, the article misrepresented the current status
of Government support for hydrogen:
“In August, Government provided a $20 million boost for Hiringa’s strategy from its
Covid recovery fund.
The Government is also offering further support through:
•
an exemption for road user charges based on vehicle weight and kilometres
•
low emission vehicle capital support programmes for fleet owners through
the Energy Efficiency and Conservation Authority’s Low Emissions Vehicle
Contestable Fund
•
direct investment in the refuelling network”
Clarifications
“$20 million boost for Hiringa’s strategy from its Covid recovery fund”
2.
The Government has provisionally agreed to provide $20 million of ‘shovel ready’ funding to
the Hiringa hydrogen refuelling network project.
1
https://www.energynews.co.nz/news-story/green-hydrogen/76613/hiringa-details-hydrogen-roll-out-plans
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3.
EECA considers this project medium-risk, as due diligence indicates that the project as
proposed is not ‘shovel ready’ for a number of reasons. EECA has assessed several
alternative project scopes against a number of criteria and these are now with IRG Ministers
for decisions.
4.
This funding is not confirmed, and remains subject to:
•
Ministerial decisions about the high-level scope and structure of the project (per
advice on alternative scopes), and
•
Negotiation of a funding agreement between EECA and Hiringa, based on decisions to
be made by Ministers, which will establish project/payment milestones and
commitments.
“…an exemption for road user charges based on vehicle weight and kilometres”
5.
A proposal to extend the existing road user charges (RUC) exemption to hydrogen vehicles is
being developed but has not been confirmed.
6.
The Ministry of Transport (MOT) is currently preparing a briefing for the Minister of
Transport regarding the current RUC exemption for electric vehicles. We understand this
briefing will likely consider options for extending or expanding the current exemption (e.g.
to all low emission vehicles) by amending primary legislation, as well as considering the
potential to remove the exemptions entirely and use a separate system for incentivising low
emission vehicles.
“…low emission vehicle capital support programmes for fleet owners through the Energy
Efficiency and Conservation Authority’s Low Emissions Vehicle Contestable Fund”
7.
The Low Emission Vehicles Contestable Fund is available to help de-risk demonstration
projects, i.e. projects where commercial returns aren’t yet strong enough to justify full
private investment.
8.
Capital to support hydrogen vehicles for fleet owners would be in scope, but any such
funding would be subject to the established contestable process and has not been pre-
committed to this purpose.
“…direct investment in the refuelling network”
9.
It is unclear what this refers to – EECA is unaware of any direct government investment in
the hydrogen refuelling network other than the $20 million shovel ready funding outlined
above, which remains subject to Ministerial decisions and commercial negotiations with
EECA.
AIDE MEMOIRE | 11/12/2020
2
Ministerial Briefing
To
Hon Dr Megan Woods
MINISTER OF ENERGY AND RESOURCES
Title of briefing
Low Emission Transport Fund: Round One and Two projects
Date
22/02/2022
EECA reference
EECA 2022 BRF 002
Response required
24 February 2022
number
by:
EECA priority
Routine
Consultation
N/A
Attachments
Appendix One: Conditionally approved projects
Appendix Two: Conditionally approved project descriptions
Appendix Three: Round One and 2 investment criteria
Appendix Four: Location of public electric vehicle chargers co-
funded in Round Two
Appendix Five: Draft Ministerial press release
EECA contacts
Position
Name
Mobile Number
Work Number
1st Contact
Chief Executive
Andrew Caseley
04 470 2201
Responsible
Jesse Corlett
04 470 2213
manager
Principal author
Daniel Barber
Information withheld under section 9(2)(a) of the
Official Information Act 1982
Purpose
1.
To brief you on projects for which government co-funding has been committed under
Rounds One and Two of the Low Emission Transport Fund (the LETF). We propose that you
announce successful projects at an event at Orion in Christchurch on 24 February 2022.
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Key messages
EECA has completed consideration of applications for the first two rounds of the Low
Emission Transport Fund (LETF). Round One is focussed on Demonstration of vehicles and
technology and Round Two is focussed on Adoption of public EV charging infrastructure.
EECA has conditionally approved a combined total of $6.45 million in government funding
for 26 projects across the two rounds, matched by $9.03 million in applicant funding. The
combined investment across these projects is $15.49 million, with EECA’s funding covering
42 percent.
Since the LETF and the previous Contestable Fund began, EECA has committed $42.2
million in government funding to 228 projects, matched by $86.83 million in applicant
funding.
Some particularly noteworthy projects being funded through these rounds include quite a
large investment by Z Energy to install fast EV chargers on some of its forecourts, as well as
several projects demonstrating battery swap technology with electric trucks (including by
Fonterra and Mainfreight).
EECA proposes you announce the Round One and Two projects via a ministerial media
release and photo opportunity. The announcement is currently planned to take place at
Orion in Christchurch on 24 February. A draft media release is attached in Appendix Five.
Recommended actions
a.
Note the recipients of government funding under Rounds One and Two of the Low Emission
Transport Fund
b.
Approve the attached draft ministerial media statement for release on 24 February 2022
Approve / Do not approve
c.
Refer this briefing to the Minister of Transport for information
Agree / Disagree
Andrew Caseley
Hon Dr Megan Woods
CHIEF EXECUTIVE
MINISTER OF ENERGY AND RESOURCES
_ _ / _ _ / _ _
_ _ / _ _ / _ _
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Background on the Low Emission Transport Fund
2.
Through Budget 2021, the Government committed funding to expand the size and scope of
EECA’s Low Emission Vehicle Contestable Fund (LEVCF), with the fund becoming the Low
Emission Transport Fund (LETF).
3.
The LETF supports the demonstration of high potential and replicable solutions, and
adoption of low emission transport technology, innovation, and infrastructure to help
accelerate the decarbonisation of the New Zealand transport sector.
4.
Whereas each funding round for the previous LEVCF was open to all potential funding
areas, the LETF has separate funding rounds for different focus areas.
5.
The first two rounds of the LETF opened for applications in October 2021, with applications
due by 3 November. These two rounds were focussed on:
a.
Round One – Demonstration of vehicles and technology
b.
Round Two – Adoption of public EV charging infrastructure.
Summary of Rounds 1 and 2
6.
As shown in Table 1 below, EECA has conditionally approved $6.45 million of co-funding for
26 applications through Rounds One and Two of the LETF, to be matched by $9.03 million
of applicant co-funding. See Appendix One for a summary of conditionally approved projects
and Appendix Two for project descriptions.
Table 1 – Summary of LETF Rounds 1 and 2
Round One Vehicles &
Round Two Public
Total
Technology
Charging
Infrastructure
Number of eligible
30
24
54
proposals received
Number of projects
13
13
26
approved
EECA co-funding to
$3.45m
$3.00m
$6.45m
be committed
Applicant funding
$5.39m
$3.64m
$9.03m
Total Project Costs
$8.84m
$6.64m
$15.49m
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7.
This will take the total number of projects funded to date under the LETF and the previous
Contestable Fund to 228, worth a combined total of $42.2 million in government funding,
matched by $86.83 million in applicant funding.
8.
As under the LEVCF, EECA used panels for Rounds One and Two of the LETF to assess each
project’s merits according to its fit with the investment activity, fit with the investment
principles for the funding round, ability to deliver, and value for government money.
9.
Due to the level of funding requested for projects and EECA’s financial delegations, all
projects were able to be approved by EECA’s Group Manager Investment and Engagement.
Round One – Demonstration of vehicles and technology
10. Round One of the LETF sought to demonstrate a range of low emission transport
technologies, infrastructure, innovations and business models (e.g. Mobility-as-a-Service, or
MaaS, transport technology and software projects) and low emission road and off-road
vehicles. The full investment criteria for Round One are included in Appendix 3.
11.
An initial funding envelope of $3.4 million of new funds was notionally available for Round
One, based on the funding available in the LETF for 2021/22.
12. EECA received 30 eligible applications. There was one ineligible application.
13. The amount of co-funding requested in the eligible applications totalled $10.39 million. This
represented total project costs of $25.19 million.
14. Applications were assessed by a panel of EECA staff and an independent panel member.
15.
Based on panel recommendations, EECA has conditionally approved 13 projects for co-
funding that would allocate $3,452,025 (39% of total project costs) from Round One.
16. Notable Round One projects include:
a.
Several electric truck projects utilising battery swap technology, including:
Out of
scope
b.
Electric vehicle charging technology demonstrations including:
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Out of
i)
scope
c.
Kiwi H2 Ltd will convert two diesel trucks to run on 40 percent hydrogen, using a
technology from the UK.
Round Two – Adoption of public EV charging infrastructure
Out of scope
1
Includes both fast and slow chargers
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Out of scope
26.
Information
withheld under
section 9(2)(b)(ii)
of the Official
Information Act
1982.
Risks
27. There is a possibility that one or more of the 26 projects will be cancelled after you have
announced the recipients of conditional co-funding, reflecting the inherent risks of co-
funding innovation projects. However, this risk has been in part mitigated through the
assessment process by prioritising applications that have a strong ability to deliver. Any
funding allocated to cancelled projects will be returned to the LETF to be reinvested.
Next steps
28. We will work with your office to organise the announcement of the results of Rounds One
and Two of the LETF. This is currently planned to take place at the Orion (the central
Canterbury electricity distribution business) office on 24 February 2022.
29. EECA and MBIE have been engaging with the Ministry for the Environment regarding
potential announcements that can be made in the lead-up to the release of the Emission
Reduction Plan, demonstrating partnership and co-investment opportunities between the
government and private sector. It has been agreed that there is no need to delay the LETF
announcement to align with ERP announcements, however we will continue to consider
potential opportunities for LETF funding recipients to be included in ERP-related
announcements.
30. We are working on identifying and developing the focus areas for future LETF rounds. As
funding has been exhausted for this financial year, the next rounds will likely need to be in
financial year 2022/23. We will update you on thinking for these focus areas shortly.
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31. If the Budget bid on freight decarbonisation is successful in Budget 2022, we will also
progress development of a freight decarbonisation round, in consultation with the sector,
targeted for 2023/24.
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Appendix 1 - Conditionally approved projects
*Note some projects have had an extra $2,000 added for reporting
Round One - Demonstration of vehicles and technology
Estimated total
Out of scope
Lead applicant
Project
Govt funding $
Govt Funding %
project cost
Technology and software
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Estimated total
Lead applicant
Project
Govt funding $
Govt Funding %
project cost
Out of scope
Information
ULEMCo Ltd will be introduced to NZ to convert diesel
withheld under
vehicles to run on 40% hydrogen, aiming to save 40%
section 9(2)(b)(ii)
Kiwi H2*
$227,000
emissions. Project will deploy two Isuzu 4X2 trucks and
of the Official
two hydrogen conversion units.
Information Act
1982
Vehicles
Out of scope
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Out of scope
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Estimated total
Lead applicant
Project
Govt funding $
Govt Funding %
project cost
Round Two - Adoption of public EV charging infrastructure
Estimated total
Lead applicant
Project
Govt funding $
Govt Funding %
project cost
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Out of scope
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Estimated total
Lead applicant
Project
Govt funding $
Govt Funding %
project cost
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Out of scope
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Estimated total
Lead applicant
Project
Govt funding $
Govt Funding %
project cost
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Out of scope
Appendix 2 – Conditionally approved project descriptions2
Round One - Demonstration of vehicles and technology
Technology
5. Kiwi H2 Ltd $227,000
Decarbonising industrial vehicles in Aotearoa New Zealand today
2 The wording of project descriptions is currently being finalised with the applicants. The final descriptions
added to the EECA website may be slightly different to those included here.
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Out of scope
Kiwi H2 Ltd has exclusively licensed a commercialised dual fuel product from the UK, which
converts diesel vehicles to run on 40% hydrogen, aiming to save 40% emissions. This will help
fleets decarbonise until commercially available and viable 100% zero emission options are
available in NZ. They will convert 2 trucks to use this technology in this project.
Fleet management
Off-road
Trucks
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Out of scope
Buses
Round Two - Adoption of public EV charging infrastructure
Chargers – Journey
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Out of scope
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Out of scope
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Appendix 3 – Investment criteria
Round One - Demonstration of vehicles and technology
Round One’s investment focus looked for projects that will meet specific objectives around
technology, vehicles, and software and support.
Technology
Encourage innovation in approaches and technologies that can result in transport
decarbonisation through for example smart charging and software to reduce or defer peak
electricity demand, and optimisation of the use of low emission vehicles and other modes
of transport, Mobility-as-a-Service applications.
Provide charging infrastructure technology which demonstrates the ability of technology
to address constrained infrastructure or power availability at charging locations of
interest.
Vehicles
Demonstrate low emission vehicles with a new business case, demonstration opportunity
in a new sector or use case, or address significant barriers in an organisation or sector.
Demonstrate opportunities to consolidate the existing fleet of vehicles and provide
innovative ways to transport people and goods.
Software and support
Provide software applications that will accelerate the transition of the fleet to zero
emissions.
Support the development of low emission transport maintenance, repair and other support
services.
Support the development of battery recycling and repurposing services.
Round Two - Adoption of public EV charging infrastructure
Round Two’s focus was on two areas:
1. Public chargers in identified charging infrastructure gaps and locations, to future-proof for
an expected increase in demand. To minimise queueing and stay ahead of EV uptake,
multi-head chargers at higher speeds will be prioritised.
2. Public chargers of 25kW DC minimum for community or neighbourhood charging, both
individual or a network where users will spend between 30 minutes and 2 hours.
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These projects should:
Support EV uptake and provide consumers with confidence in the availability of public
electric vehicle charging infrastructure.
Ensure charging infrastructure standards such as interoperability, connectivity and energy
efficiency are adequately met.
Provide the government and industry with information and guidance to better inform
planning and optimal investment.
Encourage new entrants and competition for provision of charging infrastructure and
service providers.
Enable innovation in new technology and business models.
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Out of scope
Appendix 4 - Location of public electric vehicle chargers co-funded via
Round Two
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Out of scope
South Island
Total
25
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Information withheld under section 9(2)(g)(i)
of the Official Information Act 1982
Appendix 5 – Draft Ministerial press release
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23
Ministerial Briefing
To
Hon Dr Megan Woods
MINISTER OF ENERGY AND RESOURCES
Title of briefing
Low Emission Vehicles Contestable Fund: Round 9 projects
Date
22 December 2020
EECA reference
EECA 2020 BRF 056
Response required by:
29 January 2021
number
EECA priority
Routine
Consultation
N/A
Attachments
• Appendix One: Conditionally approved projects from Round 9
• Appendix Two: Conditionally approved project descriptions for
Round 9
• Appendix Three: Location of public EV chargers co-funded in
Round 9
• Appendix Four: Draft media release
EECA contacts
Position
Name
Mobile Number
Work Number
1st Contact
Chief Executive
Andrew Caseley
04 470 2201
✓
Responsible
Jesse Corlett
04 470 2213
manager
Principal author
Nesta Jones
04 470 2226
Information withheld under section
9(2)(a) of the Official Information
Act 1982.
MINISTERIAL BRIEFING | 22 December 2020
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Purpose
To brief you on projects for which government co-funding has been committed under Round 9 of
the Low Emission Vehicles Contestable Fund (the Contestable Fund). We are proposing that you
announce successful projects via a media release and photo opportunity in late January 2021.
Key messages
•
EECA’s Board has conditionally approved a combined total of $3.7m in government funding
for 22 projects, matched by $9.4m in applicant funding. The combined investment across
these projects is $13.1m, with EECA’s funding covering 28 percent.
•
Since the Contestable Fund began, EECA has committed $29.4m in government funding to
180 projects, matched by $62m in applicant funding (see Table 1).
•
EECA proposes you announce Round 9 projects via a ministerial media release and photo
opportunity in late January 2021. A draft media release is attached in Appendix Four.
•
Round 10 of the Contestable Fund will be launched in late March/early April - EECA’s Board
has approved deferring the launch by two months to allow EECA to review the investment
criteria, develop a charging infrastructure vision and consider broadening the Fund’s scope
to include other high impact areas.
Recommended actions
a)
Note the recipients of government funding under Round 9 of the Low Emission Vehicles
Contestable Fund;
b)
Approve the attached draft ministerial media statement for release in late January 2021;
and
c)
Refer this briefing to the Minister of Transport for information.
Agree / Disagree
Andrew Caseley
Hon Dr Megan Woods
CHIEF EXECUTIVE
MINISTER OF ENERGY AND
22 / 12 / 2020
RESOURCES
_ _ / _ _ / _ _
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Background on the Low Emission Vehicles Contestable Fund (the
Contestable Fund)
1.
The purpose of the Contestable Fund is to encourage innovation and investment that will
accelerate the uptake of low emission vehicles in New Zealand.
2.
In 2020/21, up to $6.5 million in grant funding is available of which $2.7m was approved in
July (Round 8).
3.
EECA’s Board is responsible for approving funding proposals, which are evaluated and
recommended by an independent assessment panel.
Round 9 summary
4.
In Round 9, EECA received 47 eligible applications and one ineligible application. The
amount of co-funding requested in the eligible applications totalled $16.4m. The combined
value of all project applications was $41.9m.
5.
On the recommendation of the independent assessment panel, EECA’s Board has
conditionally approved $3.7m in government funding for 22 projects, with applicants
committing an additional $9.4m in funding. The combined investment is $13.1m with
EECA’s funding covering 28 percent. See Appendix One for a summary of conditionally
approved projects and Appendix Two for project descriptions.
6.
This takes the total number of projects funded to date under the Contestable Fund to 180,
worth a combined total of $29.4m in government funding1, matched by $62m in applicant
funding. This means that funding recipients have contributed 68 percent of total project
costs to date (see Table One on page 5).
7.
The investment focus for Round 9 was similar to Round 8, including the focus on e-bike
storage. The investment focus was to:
Out of
a)
scope
b)
c)
1 Current net commitment after deducting milestone write-0ffs and cancellations – project underspends and
cancellations, when they occur, are reinvested in the Fund
3
Out of
TE TARI TIAKI PŪNGAO - ENERGY EFFICIENCY AND CONSERVATION AUTHORITY
scope
d)
e)
f)
g)
h)
.
8.
As in previous rounds, the panel made its recommendations by assessing each project’s
merits according to its contribution to the objectives of the Contestable Fund, fit with
investment focus, ability to deliver, and value for government money.
9.
The recommended projects support a combination of technologies and applications that will
continue to develop the market for low emissions vehicle technology:
a.
,
b.
,
c.
four are for fleet management projects,
d.
,
e.
f.
.
10. Round 9 includes funding for 11 public EV chargers (many with multiple charging ports).
See Appendix Three for a list of all public chargers by location. To date we have committed
funding to nearly 750 public EV chargers through the Contestable Fund, of which nearly 550
are now operational.2
11.
Notable Round 9 projects include:
a.
2 Includes both fast and slow chargers
4
TE TARI TIAKI PŪNGAO - ENERGY EFFICIENCY AND CONSERVATION AUTHORITY
Out of
scope
b.
d.
Hyundai will purchase and deploy a fleet of five zero emission hydrogen fuel cell
electric vehicles;
e.
a
Table One: Summary of Contestable Fund commitments to date3
Total
Rd 1 –
Rd 2 –
Rd 3 –
Rd 4 –
Rd 5 –
Rd 6 –
Rd 7 –
Rd 8 –
Rd 9 –
after
16/17
17/18
17/18
18/19
18/19
19/20
19/20
20/21
20/21
nine
rounds
Number of
eligible
85
46
55
74
77
75
71
67
47
597
proposals
received
Number of
14
14
17
14
31
26
20
22
22
180
projects4
Funding
$3.3m
$2.7m
$2.7m
$2.5m
$4.1m
$4.0m
$3.7m
$2.7m
$3.7m
$29.4m
committed5
Applicant
$4.0m
$9.9m
$3.4m
$3.1m
$8.0m
$11.1m
$8.1m
$5.0m
$9.4m
$62.0m
funding
Total
Project
$7.3m
$12.6m
$6.1m
$5.6m
$12.1m
$15.1m
$11.8m
$7.7m
$13.1m
$91.4m
Costs
3 All figures rounded to nearest $100,000
4 Excludes 13 projects that were conditionally approved and/or contracted but subsequently cancelled
5 EECA’s current net commitment after deducting milestone write-0ffs and cancellations – project underspends and
cancellations, when they occur, are reinvested into the Fund.
5
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Risks
12. There is a possibility that one or more of the 22 projects will be cancelled after you have
announced the recipients of conditional co-funding, reflecting the inherent risks of co-
funding innovation projects. Any funding allocated to cancelled projects will be returned to
the Contestable Fund to be reinvested via the next funding round.
Round 10 is an opportunity to pivot the Contestable Fund
13. A request for proposals (RFP) for Round 10 of the Contestable Fund was scheduled to be
released in February 2021.
14. There is currently over $1.6m in uncommitted funds. Both Round 8 and Round 9 have not
fully utilised available funding. This is for a number of reasons, including:
a.
There are insufficient quality projects seeking new funding,
b.
Several projects have been cancelled, and
c.
Several projects being completed under budget.
15.
The panel has also commented that they are no longer seeing innovation and that the
majority of applications are repeating previous projects or not providing additional
information to assist the market.
16. Following an internal strategic review, it was agreed to ‘pivot’ the Contestable Fund to likely
focus on public charging infrastructure and heavy freight (from Round 11). However, given
the current quality of proposals, EECA is now proposing to pivot the fund from Round 10.
17.
To provide time to pivot the fund for Round 10, EECA’s Board has approved a deferral of
two months from an early February launch to late March/early April. This will allow EECA
to:
a.
Review the future focus areas and develop appropriate investment criteria
b.
Obtain further information from Waka Kotahi NZ Transport Agency, to inform
development of a charging infrastructure vision
c.
Consider broadening the scope to include further high impact areas (for example, bio-
fuels and off-road and agricultural vehicles).
18. Pivoting the Contestable Fund from Round 10 will also build a foundation on which we can
build if the Government proceeds with its election proposal to increase funding to $25
million per year.
19. We will provide you with further advice on the pivot in the New Year.
6
Appendix One: Conditionally approved projects from Round 96
Govt
Govt
Estimated total
Project Type
Lead applicant
Project Title
funding $ Funding %
project cost
Out of
scope
Charging
infrastructure
Secure e-bike
storage
facilities
6 Details of all projects remain provisional until contracts have been signed
* These projects have been allocated up to $2,000 in additional co-funding per project for the production of data and reporting of results
MINISTERIAL BRIEFING | 22 December 2020
TE TARI TIAKI PŪNGAO - ENERGY EFFICIENCY AND CONSERVATION AUTHORITY
Govt
Govt
Estimated total
Project Type
Lead applicant
Project Title
funding $ Funding %
project cost
Out of
scope
Heavy electric
vehicles
Information withheld
under section 9(2)(b)
Hyundai Motors New Hydrogen Fuel Cell Electric (FCEV) (Zero Emission) Truck
$500,000
(ii) of the Official
Zealand Limited
Fleet Demonstration
Information Act 1982
Out of
scope
Technology
Car share
8
Out of
TE TARI TIAKI PŪNGAO - ENERGY EFFICIENCY AND CONSERVATION AUTHORITY
scope
Govt
Govt
Estimated total
Project Type
Lead applicant
Project Title
funding $ Funding %
project cost
Fleet
management
9
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Appendix Two: Conditionally approved project descriptions from Round 9
7
Out of
scope
Charging infrastructure
1.
7 We are still finalising project descriptions. We will provide your office with a copy of the final project descriptions
prior to the announcement of the successful projects.
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6.
Out of
scope
Secure e-bike storage facilities
8.
Heavy electric vehicles
10.
11
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11.
Out of
scope
14. Hyundai Motors New Zealand Limited
$500,000
Hydrogen Fuel Cell Electric (FCEV) (Zero Emission) Truck Fleet Demonstration
Hyundai New Zealand Ltd will purchase and deploy an initial fleet of five zero emission Fuel
Cell Electric trucks into New Zealand and enter real-world daily logistics operation trials.
Technology
15.
Out of
scope
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16.
Out of
scope
Car share
18.
Fleet management
19.
.
13
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20.
Out of
scope
14
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Out of
scope
Appendix Three: Location of public EV chargers co-funded via Round 98
8 This list excludes private or residential chargers. It also excludes the 26 slow EV charging stations that Fonterra will
install at key manufacturing sites for staff commuters, visitors and company vehicles.
15
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Appendix Four: Media release DRAFT
SEE ATTACHED
16
1
To: Hon Dr Megan Woods
MINISTER OF ENERGY AND RESOURCES
Low Emission Vehicles Contestable Fund: successful round five projects
Date: 12 December 2018
EECA reference EECA 2018 BRF 017
Response
20 December
number:
required by:
EECA priority: Urgent
Consultation: NA
Attachments:
• Appendix 1: Conditionally approved projects from round five
• Appendix 2: background questions and answers
• Draft media release
EECA contacts
Position
Name
Telephone
1st
(cell) (work)
Contact
Chief Executive
Andrew Caseley
04 470 2201
✔
Responsible manager Elise Broadbent
04 495 2975
Principal author
Mitch Trezona-Lecomte
04 470 2236
Purpose
To brief you on the projects to be funded under round five of the Low Emission Vehicles
Contestable Fund (the Fund) prior to the announcement of these projects next week.
Key messages
• You are announcing projects that wil receive government funding under round five of
Low Emission Vehicles Contestable Fund.
• EECA’s Board has conditionally approved funding for 31 projects worth a combined
total of $4.315 mil ion in government funding, matched by an additional $7.33 million
in applicant funding. The combined investment is $11.65 mil ion with EECA funding 37
percent. This makes round five the biggest round to date in terms of government
funding and number of projects.
Information withheld under section 9(2)(a) of
the Official Information Act 1982
2
• Included in the list of approved projects is funding for the first hydrogen fuel cell
vehicles financed under the Fund, as part of Ports of Auckland’s broader hydrogen
demonstration project.
• In total EECA has now committed $17.2 mil ion in government funding to 93 projects,
matched by over $28 mil ion applicant funding (see Appendix 1).
• We have attached a draft media release for you to publish should you wish to announce
the successful projects.
• Round six will likely open in March and close April 2019.
Recommended actions
a)
Note the recipients of government funding under round five of the Low Emission
Vehicles Contestable Fund;
Noted
b)
Note we propose you announce the successful round five funding recipients
prior to 20 December, and if you are unable to do so EECA wil announce
Noted
them via a media release;
c)
Agree to forward this briefing to the Associate Transport Minister.
Agree / Disagree
Andrew Caseley
Hon Dr Megan Woods
Chief Executive
Minister of Energy and Resources
___12___/___12___/__18____
________/________/________
3
Background on the Low Emission Vehicles Contestable Fund (the Fund)
1. The purpose of the Fund is to encourage innovation and investment that wil accelerate
the uptake of low emission vehicles in New Zealand that might not otherwise occur.
2. To help implement more projects sooner and accelerate activity in the market for low
emission vehicles technology, EECA brought forward $1 mil ion from 2020/21 to
2018/19. This means up to $7 mil ion in grant funding is available this financial year
(as the EECA Board has agreed for EECA to meet all of the Fund’s operational costs).
3. EECA’s Board is responsible for approving funding proposals, which are evaluated and
recommended by an independent assessment panel.
Round five summary
4. Through round five, EECA received 77 eligible applications for $14.3 million in
government funding.
5. On the recommendation of the independent assessment panel, EECA’s Board has
conditionally approved $4.315 mil ion in government funding for 31 projects, with
applicants committing an additional $7.33 mil ion in funding. The combined investment
is $11.65 million with EECA’s funding covering 37 percent). A summary of the round
five projects is in table two below. For a description of all round five projects see
Appendix One on page 8.
6. This takes the total number of projects funded to date to 93, worth a combined total of
$17.2 mil ion in government funding, matched by over $28 mil ion in applicant funding.
(See Appendix 1). This means funding recipients have contributed more than 62
percent of total project costs to date. See Table One below.
7. In terms of both funding committed and projects funded, round five is the biggest to
date. As in previous rounds, the panel made its recommendations by assessing each
project’s merits according to its contribution to the objectives of the Fund, fit with
investment focus, ability to deliver, and value for government money.
8. None of the projects exceed the $500,000 cap or require more than 50 percent
government co-funding.
9. The recommended projects support a combination of technologies and applications
that wil continue to develop the market for low emissions vehicle technology. Nine are
for charging infrastructure, six are for heavy EVs (buses and trucks) and 14 are for
light EVs (cars, vans, utes, and campervans). One will demonstrate a method to test
battery condition, and one will test how vehicle-to-home technology could help reduce
peak demand and/or materially improve resilience during power outages.
10. Round five includes funding for 51 charging stations (34 publicly available). Several
public charging stations will be installed in popular South Island tourism destinations
such as Te Anau, Tekapo, and Franz Josef Glacier. For example, Ngai Tahu Tourism,
link to page 60
4
in partnership with ChargeNet, wil receive co-funding to install fast-charging stations
at Franz Josef Hot Pools, Dart River Glenorchy, Earth and Sky Tekapo, Shotover
River, and Huka Falls.
11. We have now committed $26.8 mil ion in government funding to install around 570
chargers throughout New Zealand.
1 Of these, 330 will be public chargers. Nearly 300
chargers co-funded under the Fund have now been installed.
12. One co-funded project wil contribute to Ports of Auckland’s ‘hydrogen demonstration
project’, which wil see New Zealand’s first hydrogen fuel production plant built on the
Auckland waterfront next year. EECA’s co-funding wil support the procurement of a
hydrogen fuel cell (HFC) bus and three cars. Co-funding does not cover the hydrogen
generation plant as it does not meet the current funding criteria. Other innovative
projects we have committed co-funding toward include:
Out of scope
a.
1 Includes both fast and slow chargers – not all chargers wil be publically available
2 Excludes 7 projects that were conditionally approved but subsequently cancelled
5
Out of
scope
Table Two: Summary of conditionally approved round five projects
Estimated
Project Theme
Lead Applicant
Project Description
Government
Total
Contribution
Project
Cost
Charging
Infrastructure
Buses and
Information
Trucks
Ports of Auckland
Ports of Auckland Hydrogen
withheld under
Ltd - Hydrogen fuel
Demonstration Project: EECA’s
section 9(2)(b)
cells (in collaboration funding wil cover conversion of
(ii) of the Official
with Auckland
ICE vehicles to EVs; however, the
$250,000
Infromation Act
Transport and
project includes testing the viability
1982
Kiwirail)
of hydrogen to power vans and a
bus for public transport
Out of
scope
6
Out of
scope
Cars, vans,
utes and
campervans
Battery
technologies
and testing
7
Out of
scope
TOTA
$4,314,784 (31%) $13,764,841
LS
Major funding recipients
Out of
13.
scope
14.
15.
Risks
16. There is a possibility one or more of the 31 projects wil be cancelled after you have
announced the recipients of conditional co-funding. To date, seven projects have been
cancelled either by the project partner or EECA due to failure to meet project
milestones. This reflects the inherent risks of co-funding innovation projects. No
funding has been paid out to cancelled projects; funds allocated to cancel ed projects
are returned to the Fund to be made available in the next funding round.
8
Out of
scope
Appendix 1: Conditionally approved projects from round five DRAFT
Note we are stil finalising the project descriptions. We wil provide your office with a copy of
the final project descriptions prior to the announcement of successful projects.
Charging
1.
9
Out of
6.
scope
Electric buses and trucks
10.
10
Out of
scope
12.
13. Ports of Auckland Ltd (in collaboration with Auckland Transport and Kiwirail)
$250,000
Ports of Auckland Hydrogen Demonstration Project
As part of its hydrogen fuel demonstration project, Ports of Auckland wil procure
hydrogen fuel cell vehicles (one bus and up to four cars) that wil be used and tested
as part of the wider hydrogen demonstration project. The vehicles wil be operated in
Auckland. The project is reliant on the completion of Ports of Auckland’s separately-
funded hydrogen plant project, which is expected to be December 2019.
14.
Electric cars, vans, utes and campervans
11
Out of
scope
12
Out of
scope
Battery technologies and testing
30.
13
Out of
scope
.
Technology, bil ing and apps
14
Appendix 2: background questions and answers
What is the fund for?
The purpose of the Low Emission Vehicles Contestable Fund is to encourage innovation and
investment that wil accelerate the uptake of electric and other low-emission vehicles (LEV) in
New Zealand that might not otherwise occur.
How much money can applicants apply for?
The Fund offers up to 50 per cent funding towards suitable projects. The required co-funding
must be cash and not in-kind, and must not come from other central government grants. Total
EECA funding available per project is generally limited to $500,000. Proposals for more than
this wil be considered in exceptional circumstances.
What type of projects are likely to be co-funded?
Innovative projects that wil accelerate the uptake of electric and other low-emission vehicles
in New Zealand that might not otherwise occur. The fund is limited to projects involving
mainstream vehicles (and related technologies) that operate on roads used by the public.
Each funding round has an investment focus approved by the Minister of Energy and
Resources and publicised on the EECA website. Projects that align with the investment focus
are more likely to be successful.
Who decides what proposals will be funded?
An assessment panel assesses proposals against criteria and then make recommendations
to the EECA Board. The EECA Board makes final decisions on which proposals are offered
funding and how much that offer wil be.
Who is eligible to apply for funding under the contestable fund?
The fund is open to all New Zealand-based legal entities except Public Service Departments,
non-Public Service Departments, and Statutory Crown Entities such as District Health Boards.
Where can I find out what projects have been funded?
Details wil be available on EECA’s website:
https://www.eeca.govt.nz/funding-and-
support/low-emission-vehicles-contestable-fund/
How much money is the Government investing?
$4.315 mil ion (from government) with recipients contributing an additional $7.33 million. In
total, under the five funding rounds the Government has invested $17.215 mil ion into 93
projects, with recipients investing over $28 million.
How many projects?
There are 31 approved projects. EECA received applications for 77 projects.
Should the Government be funding organisations for projects that benefit them?
The Fund encourages innovation and investment to accelerate the uptake of electric and
other low emission vehicles in New Zealand, which might not otherwise occur.
15
16
20 DECEMBER 2018
Low emissions transport investment
the largest so far
HON DR MEGAN WOODS
Energy and Resources
Low emission transport wil receive another boost totalling more than $11 mil ion,
Energy and Resources Minister Megan Woods announced today.
Projects approved under round five of the Low Emission Vehicles Contestable Fund
wil share more than $4.3 mil ion of government co-funding – the largest amount
made available so far.
Successful applicants wil contribute more than $7.3 mil ion of their own money,
bringing the total investment to $11.65 mil ion.
Thirty-one projects have been approved – also a new high. Previous rounds have
given the green light to between 14 and 18 projects.
Dr Woods said the fund has proved an effective stimulus to action and innovation.
“More businesses are seeing the wide range of opportunities offered by low
emissions and electric transport. This co-funding removes some of the risk and gets
them across the line.”
Stand-out projects supported in round five include:
• Ports of Auckland will procure a hydrogen fuel cell (HFC) bus and three HFC
cars as part of its wider project to build a hydrogen fuel production plant
• Alsco will test the feasibility of a long-haul heavy electric truck between
Rotorua and Tauranga
• Vector will trial four smart ‘vehicle-to-home’ chargers and EV chargers in Piha,
including testing the resilience of the systems and their potential to reduce
peak demand
• Orix will offer certain customers the chance to swap one leased petrol/diesel
vehicle for a leased EV and free slow-charger at no extra charge
• Chargemaster will establish a demonstration site using solar PV to charge an
EV.
17
• Funding for 34 more public charging stations, including several at South
Island tourism hot-spots.
In total, the fund has committed $17.2 mil ion in government funding to 93 projects.
This is matched by over $45 mil ion applicant funding.
The fund is one of several initiatives in the Government’s Electric Vehicles
Programme. It is administered by the Energy Efficiency and Conservation Authority
(EECA).
For more information about the fund, visit www.eeca.govt.nz/funding-and-
support/low-emission-vehicles-contestable-fund/
For general information about EVs, s
ee www.electricvehicles.govt.nz
[INSERT CONTACT DETAILS]
[INSERT FULL LIST OF APPROVED PROJECTS]
Ministerial Briefing
To
Hon Grant Robertson
MINISTER OF FINANCE
Hon Shane Jones
MINISTER FOR INFRASTRUCTURE
Hon James Shaw
ASSOCIATE MINISTER OF FINANCE
Cc
Hon Megan Woods
MINISTER OF ENERGY AND RESOURCES
Title of briefing
Funding arrangements for IRG project: Hiringa minimum viable
hydrogen refuelling network
Date
2 October 2020
EECA reference
EECA 2020 BRF 049 Response required
number
by:
EECA priority
High
EECA contacts
Position
Name
Mobile Number
Work Number
1st Contact
Chief Executive
Andrew Caseley 021 905 449
04 470 2201
Responsible
Eddie Christian
027 224 6287
manager
Principal author
Daniel Barber
Purpose
This paper seeks IRG Ministers’ agreement for EECA to continue due diligence of the Hiringa
minimum viable hydrogen refuelling network project using our preferred funding structure.
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Key messages
1.
As part of the $3bn ‘shovel ready’ infrastructure programme, in July 2020 Cabinet
provisional y approved a project submitted by Hiringa Energy to build a minimum viable
hydrogen refuelling network.
2. EECA has completed a preliminary assessment of the project, including receiving advice from
Chapman Tripp, with input from KPMG. The initial assessment indicates that the project is
not ‘shovel ready’.
3. This advice highlights several risks with the project relating to:
a.
the project being highly dependent on third party commitment and funding, and
b. the sustainability of the commercial model and the risk of creating a monopoly in the
hydrogen industry.
4. These risks wil need to be overcome through the structuring of the project and through due
diligence.
5.
We have assessed several proposed funding structures against a number of criteria. Our
preferred structure is providing funding through a special purpose vehicle using a convertible
debt instrument, as this would achieve an appropriate balance between protection against
downside risk, administrative cost/burden, and securing upside benefit for the public’s
investment.
6. This proposed funding structure has not yet been discussed with Hiringa and there is no
guarantee that they would accept it. However, we feel it is important for the Government to
commence these discussions with an agreed preferred approach.
7.
The Government (including EECA) has already approved (or is considering) funding for
several separate but related hydrogen projects with Hiringa (total ing $48.5m of funding
approved or under consideration). The due diligence process for the refuelling network
project wil consider the interdependency of these projects, for example to what extent is
Hiringa’s refuel ing network reliant on them receiving funding for hydrogen trucks from the
Low Emission Vehicle Contestable Fund.
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Recommended actions
a.
Note that on 24 June 2020 Cabinet’s Economic Development Committee authorised the IRG
Ministers to make final decisions on IRG projects [DEV Cabinet Minute: DEV-20-MIN0114].
Noted
b. Note that, as part of this process, Cabinet provisional y approved a project submitted by
Hiringa Energy to build a minimum viable hydrogen refuel ing network
Noted
c.
Note that the Government (including EECA) has already approved (or is considering)
funding for several separate but related hydrogen projects with Hiringa (total ing $48.5m of
funding approved or under consideration). The due diligence process for the refuelling
network project wil consider the interdependency of these projects
Noted
d.
Note that initial assessment undertaken by EECA as part of the due diligence process concluded that
the proposed Hiringa Minimum Viable Hydrogen Refuelling Network project is not ‘shovel ready’,
but this may be able to be overcome through the restructuring of the project and through the
due diligence process
Noted
e.
Note that EECA recommends that, if funding is provided to the project, it should be through
a special purpose vehicle using a convertible debt instrument as this provides an appropriate
combination of downside risk protection, minimises the administration burden and risk for
the Crown, mitigates the inherent chal enges with the Crown owning conventional equity
and provides for some potential upside.
Noted
f.
Agree to EECA proceeding with due diligence on the basis of funding being provided
through a special purpose vehicle using a convertible debt instrument.
Agree/Disagree
Andrew Caseley
Hon Grant Robertson
CHIEF EXECUTIVE
MINISTER OF FINANCE
_ _ / _ _ / _ _
_ _ / _ _ / _ _
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Hon James Shaw
ASSOCIATE MINISTER OF FINANCE
_ _ / _ _ / _ _
Hon Shane Jones
MINISTER FOR INFRASTRUCTURE
_ _ / _ _ / _ _
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Proposal for a hydrogen refuel ing network
Background
8. As part of the $3bn ‘shovel ready’ infrastructure programme, in July 2020 Cabinet
provisional y approved $20m of Government funding to support a project submitted by
Hiringa Energy to build a minimum viable hydrogen refuelling network.
Overview of proposal
9. Hiringa has sought $20m of Government funding to develop a hydrogen refuelling network,
primarily to be used by heavy vehicles. The network would comprise 8 hydrogen refuelling
stations and associated hydrogen production and supply infrastructure, online from 2021.
These stations would be located in Tauranga, Hamilton, Palmerston North, Taranaki, South
Auckland, Wel ington, Christchurch and Taupo.
10. Hiringa has plans to expand the refuel ing network in future, but this is not included in the
current project.
Further detail on the proposal
11. The breakdown of future public and private investment for the project is as fol ows:
a.
$20m of funding from the Crown (from the IRG process)
b. $49m from Hiringa, infrastructure investors and joint venture partners (strategic
investment agreements with investors, subject to Government support)
12. In its application, Hiringa noted that Government funding could come in the form of
government equity, a loan or a grant.
EECA has undertaken an initial assessment on the project
13. EECA commissioned Chapman Tripp to provide support for the initial assessment for the
project, with input from KPMG. The advice from Chapman Tripp, described below, includes:
a.
a description of the project’s benefits and risks
b. an assessment of the potential funding structures for the project.
Project benefits
14. The project, if successful, has the potential to provide social, economic and environmental
benefits to New Zealand. Some of the main benefits are described below.
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Decarbonising NZ heavy transportation industry
15. The New Zealand transportation sector represents 20% of NZ's total carbon emissions.
While battery electric vehicle (BEV) is leading the uptake of the light vehicle market, heavy
line haul BEVs currently suffer from weight constraints and longer charging duration.
16. Hydrogen Fuel Cel Electric Vehicles (FCEV) have been proposed as an alternative solution
to transform and decarbonise the heavy freight fleet industry. Hydrogen fuelled heavy
vehicles may travel up to 500km or more on a single charge with significantly lower fuel ing
duration. Therefore, some heavy freight operators see hydrogen as a superior solution from
an operational perspective. There are currently very few hydrogen trucks commercial y
available on the global market, and those that are available could be considered relatively
smal heavy vehicles (up to a maximum of about 36 tonne gross combined ma
ss)1.
17. Supporting Hiringa to build a minimum viable fuel ing network would open up the
possibility for New Zealand to have dual access to both BEV and FCEV options, thus
ensuring a viable decarbonisation solution is available for the New Zealand heavy fleet
industry.
Innovation, growth and employment
18. Hydrogen for transport, particularly heavy transport, is an area of significant innovation
around the world. As this technology is stil in the demonstration phase in New Zealand, it is
important to de-risk the technology to encourage ‘first movers’. Government support to de-
risk initial demonstration of the technology wil help to remove barriers for both the first
movers and those that may fol ow.
19. The knowledge sharing and IP gained from the project should al ow for competition and
new market entrants to New Zealand, as wel as increasing the capability and capacity for
hydrogen industry scale up.
20. A project such as this also obviously involves employment benefits, with this project
spreading these jobs across multiple regions. Hiringa estimates that the project wil provide
direct employment for about 135 people from 2020 to 2022, and will indirectly stimulate
about 50 jobs. This wil need to be tested during due diligence, but there is potential to
leverage domestic capacity and capability in areas such as fuel dispensing and hydrogen
metering technology.
1 Standard ‘heavy’ trucks used in New Zealand are 44 tonne, with some also 50 tonne.
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The wider impact on the role hydrogen plays in New Zealand’s decarbonisation future
21. Adoption of hydrogen by the heavy fleet industry could have a cascading impact on other
parts of the hydrogen supply chain. Potential ramp-up of hydrogen production could see
wider applications; examples include using hydrogen as an alternative fuel for boilers,
providing dry year reserve for New Zealand’s power system and exporting green hydrogen
overseas. These potential applications can result in wider economic and social benefits to
New Zealand.
Project risks
22. Notwithstanding its potential benefits, the project’s risks are also high because its success
depends on many unknowns. The main risks are described below.
The success of the project is highly dependent on third party commitments
23. The project wil depend on commitments from a number of parties, including offtake
providers, co-investors, overseas vendors, power suppliers, landowners, and fuel station
operators. A significant amount of coordination is required to ensure the successful rol out
of the project.
24. The project requires $49m of additional investment from third-party investors (most likely
infrastructure investors and/or JV partners). There is a risk that the Crown provides
funding, but that other third-party funding does not eventuate. To our knowledge Hiringa
has not secured this third party funding.
25. The project needs a suitable commitment from prospective customers to offtake the
hydrogen (i.e. to ensure demand). Hiringa has not demonstrated that they have this in place.
Securing this might be chal enging because a long-term offtake contract at scale (e.g.
converting an entire fleet to hydrogen-powered trucks) represents significant business
continuity risk for the fleet operators, particularly as hydrogen trucks are currently much
more expensive than a diesel equivalent (usual y 2.5 to 3 times the price). Because of this,
businesses may only want to be involved at a smal er scale.
Sustainability of the commercial model 26. Based on the information provided by Hiringa, the business model for the project is highly
dependent on hydrogen becoming cheaper to produce. This means it may not be sustainable
in the short run.
27. Hiringa is becoming a significant player in the hydrogen space in New Zealand. The
Government should consider the risk of creating an effective monopoly in the hydrogen
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industry, with Hiringa being the sole controller of New Zealand’s hydrogen supplying
network. This issue wil be explored through the due diligence process.
28. Hiringa has also indicated that they would like the government to introducean exemption
from road user charges (RUC) or similar concession for heavy hydrogen-powered vehicles
from 2021 to stimulate offtake. The ability and timing of developing an incentive for heavy
hydrogen vehicles is uncertain. A RUC exemption would require amendment to primary
legislation and would be an additional cost to the Crown (as it would reduce revenue into
the National Land Transport Fund). An inability to obtain an incentive for hydrogen heavy
vehicles may result in insufficient demand.
Hiringa has sought or is seeking funding from Government for several projects
29. In addition to this application, Hiringa has sought Government funding for several hydrogen
projects.
Project
Funding Status
Comment
sought
PGF funding for
$19.9m
Under
Currently in negotiation by the
Kapuni hydrogen
consideration Provincial Development Unit (PDU).
production facility
PGF funding for
$0.95m
Successful
A follow-on application for $20m of PGF
feasibility study of
funding for four hydrogen refuel ing
hydrogen supply
stations was suspended in March 2020
due to Covid-19.
Application for
$7.5m
Under
TR Group (with Hiringa as a co-
EECA funding for
consideration applicant), has submitted an application
hydrogen vehicles
to the Low Emission Vehicle Contestable
Fund for co-funding for hydrogen heavy
vehicles.
The latest round of the LEVCF has
received four applications related to
hydrogen heavy vehicles, seeking a total
of $9m.
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TE TARI TIAKI PŪNGAO - ENERGY EFFICIENCY AND CONSERVATION AUTHORITY
30. While Hiringa has been clear these projects are discrete, there is a level of interdependency
between these projects and the IRG project. We are engaging with the Provincial
Development Unit on this issue and it wil be explored further through due diligence.
Potential funding structures
31. Chapman Tripp has provided an assessment of four potential funding structures (loan,
grant, equity or convertible debt instrumen
t2) against four criteria:
a.
Enabling: enabling the project (i.e. financing the construction of the fuelling network)
b. Burden or cost: ease of execution and avoiding an excessive administrative burden or
cost for EECA
c.
Downside protection: the risks that EECA might face and how the structure would
mitigate them
d. Upside sharing: enabling a share in any upside for EECA and the Crown such
recycling capital back into other projects.
32. An indicative assessment of the four funding options against these criteria is included below.
Option
Enabling
Burden or
Downside
Upside
cost
protection
sharing
1. Loan
√
√
√
X
2. Equity
√
X
X
√
3. Grant
√
√
X
X
4. Convertible debt
√
X
√
√
instrument
33. The Government could use any of the options above to fund Hiringa either directly or
through a project-specific special purpose vehicle (SPV). The key considerations are listed in
the table below:
2 A convertible debt instrument is a form of short-term debt that converts into equity, typical y in conjunction with a
future financing round or other trigger. In effect, the investor loans money to a company (often a startup) and instead
of a return in the form of principal plus interest, they receive equity in the company.
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Option
Invest directly in Hiringa
Invest in an SPV
1. Exert greater control and have
1. A comparatively clean
oversight of the operations of
(ringfenced) structure, where
Hiringa
Crown funding is linked directly
2. Ability to benefit from upside
to assets associated with the
Pros
that accrues to Hiringa rather
Project
than to the Project
2. Consistent with original shovel
3. Can take comfort from co-
ready application
investor due diligence in Hiringa 3. Exposure only limited to the
activities of the SPV
1. Hard to separate fuelling
1. Can only capture upside from the
network assets from the rest of
activities of the SPV
Hiringa’s operations
2. Less confidence able to be taken
Cons
2. May encounter resistance from
from due diligence processes that
Hiringa
other third party investors have
management/shareholders
undertaken
3. Greater risk of being seen to
support a market monopoly
Recommended funding structure
34. Our recommendation, should the due diligence sufficiently overcome the risks identified, is
that funding should be provided through a SPV using a convertible debt instrument.
35. A convertible debt instrument would provide the $20m public funding to Hiringa as debt,
with this being fully or partially convertible into equity if a pre-agreed trigger is met to
capture upside (such as Hiringa being acquired or being publicly offered). It would also
provide protection against downside risk, as the Crown would not be exposed beyond its
$20m investment (until it converts to equity).
36. This will provide a combination of downside risk protection, minimise the admin
burden/risk for EECA, and provide for some potential upside.
37. We strongly recommend that this support is provided on a conditional basis. The
Government should only make the funding available contingent on the condition that all
project contracts are in place, that all other third-party investors are satisfied due diligence
has been completed and commitments are formalised. In addition, funding could be
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tranched to al ow for discrete project phases (such as feasibility or a private capital raising
process) to be funded and milestones achieved before additional funding is released.
38. This proposed funding structure has not yet been discussed with Hiringa and there is no
guarantee that they would accept it. However, we feel it is important for the Government to
commence these discussions with an agreed preferred approach.
Next steps
39. Subject to your approval of the proposed funding structure, EECA will commence due
diligence for the project.
40. Once due diligence is completed we wil report back to IRG Ministers with recommendations
to support a final funding decision for this project.
MINISTERIAL BRIEFING | 2/10/2020
11
COMMERCIAL IN-CONFIDENCE
FORTNIGHTLY REPORT
Title: EECA’s Fortnightly Report to the Minister of Energy and Resources
Date: 23 November 2018
Concept Consulting report on hydrogen technologies
The Concept Consulting Group (energy consultancy) have been commissioned to study whether
hydrogen technologies can play a role in decarbonising New Zealand’s economy, or in providing an
export opportunity assisting decarbonisation of other economies. This report has been jointly
commissioned MBIE, EECA Powerco, Meridian Energy, Contact Energy, and First Gas. The report has
been released to the commissioning group in final draft and is currently being peer reviewed. The group
wil meet next week and agree to a timetable for publication.
FORTNIGHTLY REPORT
Title: EECA’s Fortnightly Report to the Minister of Energy and Resources
Date: 14 December 2018
Update on Concept Consulting hydrogen study
A hydrogen study has been undertaken by Concept Consulting to explore whether hydrogen
technologies can play a role in decarbonising New Zealand’s economy, or in providing an export
opportunity assisting in the decarbonisation of other economies. This study has been jointly supported
by MBIE, EECA, Powerco, Meridian Energy, Contact Energy, and First Gas.
The scope of the study included applications for transport (with a focus on heavy trucks),industrial
process heat, conversion of gas networks to hydrogen, space and water heating, power generation and
export.
The draft report is being reviewed by the group sponsors and the final report is likely to bereleased in
mid-January 2019. We understand that MBIE wil brief you on the findings of the report and the plan for
its release.
FORTNIGHTLY REPORT
Title: EECA’s Fortnightly Report to the Minister of Energy and Resources
Date: 29 March 2019
Reviewing the contestable fund investment focus
EECA has started the process of reviewing the investment focus for Rounds 7 and 8. We would like to
hear any initial thoughts you may have on the focus areas for the new investment focus. We will seek
your final approval to the new investment focus in June or July this year.
Some current ideas to expand the investment focus include the fol owing:
•
Hydrogen vehicles: demonstration of commercially available transport technologies, e.g.
hydrogen trucks.
FORTNIGHTLY REPORT
Title: EECA’s Fortnightly Report to the Minister of Energy and Resources
Date: 14 June 2019
Clean Energy Ministerial – Electric Vehicles and Hydrogen Initiatives
EECA attended the recent meeting of the Electric Vehicles Initiative (EVI), part of the Clean Energy
Ministerial (CEM) 10 in Vancouver.
Hydrogen Initiative Advisory Board meeting
EECA also attended the inaugural meeting of the Hydrogen Initiative Advisory Board on MBIE’s behalf.
The meeting was wel attended by government and industry (although a number of government
members were absent).
Key points to note:
• Renewed global interest in hydrogen is increasingly being reflected in government policies. The
IEA will soon publish a report on hydrogen setting out the current state of hydrogen
technologies and policies.
• Heavy transport and freight are viewed as the most promising emerging opportunities to
increase the scale of hydrogen utilisation.
• Other potential uses for hydrogen being considered by other members are industrial heat,
electricity generation, and in petro-chemical industries. Some members are also looking at the
potential to convert gas infrastructure to allow hydrogen distribution.
• The Hydrogen Initiative aims to leverage members’ different capabilities, facilitate information
sharing, and align priorities. A work programme is under development.
• One specific output could be standardising definitions of different types of hydrogen, i.e. ‘green’
vs ‘blue’ hydrogen (we noted New Zealand’s interest in this).
We noted the Government’s intention to consult on its hydrogen green paper in June, working toward
launching its ‘green hydrogen strategy’ later in the year.
MBIE wil keep you informed about further developments.
FORTNIGHTLY REPORT
Title: EECA’s Fortnightly Report to the Minister of Energy and Resources
Date: 31 July 2020
Recent announcements of new EECA funding and projects
Investment Reference Group (IRG) projects
EECA has been allocated four ‘shovel-ready’ projects under the IRG process. Only one of these projects
(indicated below) has been publicly announced. The projects are:
• $37m for a hydrogen-powered thermal drying facility replacement, proposed by New Plymouth
District Council (this has been publicly announced)
• $11.1m for an Invercargill renewable district heating project, proposed by Great South
• $20m for an electric and hydrogen-ready hybrid ferries project proposed by EV Maritime and
Vector, and
• $20m for a minimum viable hydrogen refuelling network proposed by Hiringa Energy Ltd.
EECA has now advised successful applicants.
Next steps are to begin conducting due diligence on these projects, which wil inform advice to Ministers
confirming project specifics and seeking approval for funding to be drawn into the relevant
appropriation to initiate the projects.
FORTNIGHTLY REPORT
Title: EECA’s Fortnightly Report to the Minister of Energy and Resources
Date: 25 September 2020
Infrastructure Reference Group (IRG) projects update
EECA is responsible for delivery oversight for five Infrastructure Reference Group (IRG) Shovel Ready
projects:
• Electric and hydrogen hybrid ferries with EV Maritime (yet to be announced)
• Minimum viable hydrogen refuel ing network with Hiringa Energy
• Thermal drying facility replacement with New Plymouth District Council (NPDC)
• Invercargill renewable district heating system with Great South
• Energy hardship home retrofit programme with Blueskin.
EECA now considers the first two projects listed above medium-risk.
• The initial application for electric hydrogen hybrid ferries is not viable, nor is the Tauranga route
at this time and although the issues are being worked through, there is an outstanding issue
around an appropriate ownership structure for the ferries. We expect to provide advice to
Ministers seeking direction on these matters in the next few weeks.
• For the minimum viable hydrogen refuelling network, EECA has identified two material risks. The
first is around co-funding being unavailable, the second is the significant cost differential that
currently exists for hydrogen fuelled vehicles and therefore ensuring sufficient offtake
agreements for the hydrogen from heavy vehicle end users.
For these two projects, EECA will brief IRG Ministers by 2 October with alternative options, seeking a
preferred way forward.
The three other projects are considered low-risk. Due diligence is underway for both the thermal drying
facility replacement with New Plymouth District Council and the Invercargill renewable district heating
system with Great South. EECA and MBIE are finalising the home energy retrofit project scope with
Blueskin as there are close similarities to the Warmer Kiwi Homes Programme and energy hardship
initiatives.
FORTNIGHTLY REPORT
Title: EECA’s Fortnightly Report to the Minister of Energy and Resources
Date: 11 December 2020
Clarifying Hiringa Energy’s public comments about government support for hydrogen
On 10 December Energy News published a story about Hiringa’s hydrogen rol -out plans, based on
comments made by Hiringa at a workshop (https://www.energynews.co.nz/news-story/green-
hydrogen/76613/hiringa-details-hydrogen-roll-out-plans). The original article (since corrected)
misrepresented the status of government support for hydrogen, and appeared to suggest that:
• Government has confirmed $20m in shovel ready funding for Hiringa
• An extension to the RUC for hydrogen vehicles has been confirmed, and
• The Low Emission Vehicles Contestable Fund (LEVCF) has provided funding to support capital
costs of hydrogen trucks for fleet operators.
.
Information withheld under section 9(2)(g)(i) of
the Official Information Act 1982.
Ports of Auckland hydrogen bus
Under Round 5 of the Low Emission Vehicles Contestable Fund, EECA committed $250,000 to Ports of
Auckland (POAL) for a hydrogen demonstration project. The project is a partnership between POAL,
Auckland Transport, Auckland Council and KiwiRail, and will deliver one hydrogen bus and three cars.
The bus wil be the first hydrogen powered bus in New Zealand – it wil be owned and operated by
Auckland Transport in a test environment and is being built by Global Bus Ventures in Rol eston.
The project has been delayed 18 months due to issues with council consents and WorkSafe but is
scheduled for completion early January (TBC), with delivery to Auckland for a launch event after that.
Independently of any LEVCF funding, POAL is establishing a hydrogen generation plant (an electrolyser)
on site.
Infrastructure Reference Group (IRG) projects update
As previously advised, EECA is responsible for delivery oversight for five Infrastructure Reference Group
(IRG) Shovel Ready projects:
• Electric and hydrogen hybrid ferries with EV Maritime (yet to be announced)
• Minimum viable hydrogen refuelling network with Hiringa Energy
• Thermal drying facility replacement with New Plymouth District Council (NPDC)
• Invercargill renewable district heating system with Great South
• Energy hardship home retrofit programme with Blueskin.
Following IRG Ministers’ approval, due diligence has restarted for the electric and hydrogen hybrid
ferries – EECA considers this project medium-risk.
EECA also considers the minimum viable hydrogen refuelling network with Hiringa Energy medium-risk.
Funding agreements for the thermal drying facility replacement with NPDC, the Invercargill renewable
district heating system with Great South and the energy hardship retrofit programme with Blueskin have
been finalised and are expected to be signed by the end of next week (week ending 18 December 2020).
Information withheld under section 9(2)(g)(i) and 9(2)(ba)
of the Official Information Act 1982.
FORTNIGHTLY REPORT
Title: EECA’s Fortnightly Report to the Minister of Energy and Resources
Date: 2 March 2021
Infrastructure Reference Group (IRG) ‘shovel-ready’ projects
As previously advised, EECA has delivery oversight for five IRG ‘shovel-ready’ projects:
• Thermal drying facility replacement with New Plymouth District Council (NPDC)
• Electric and hybrid ferries with EV Maritime
• Minimum viable hydrogen refuelling network with Hiringa Energy
• Invercargill renewable district heating system with Great South
• Energy hardship home retrofit programme with Blueskin (no longer proceeding)
EECA considers both the ferries project with EV Maritime and the hydrogen refuelling network project
with Hiringa medium-risk:
•
EV Maritime – officials have resolved outstanding risks and are drafting the final briefing to IRG
Ministers recommending the release of the funding.
•
Hiringa – officials are working constructively with the applicant to attempt to overcome various key
project requirements (relating to securing third-party funding and who wil contract for the operation of
the hydrogen trucks).
Blueskin has declined the funding for their project
Following advice from Blueskin Energy Limited that it no longer considers itself in a position to
undertake the project, EECA has now terminated this project and provided advice to Ministers seeking
direction on next steps.
FORTNIGHTLY REPORT
Title: EECA’s Fortnightly Report to the Minister of Energy and Resources
Date: 25 June 2021
Update on hydrogen refuel ing network and home energy retrofit pilot projects IRG ‘shovel ready’
projects
Hiringa hydrogen refuelling network
EECA and its advisors are completing due diligence on the Hiringa Refuelling New Zealand Project,
accounting for the four-station approach and revised Hiringa corporate and investor structure. EECA
remains concerned about the timeframes for progressing the Project and of reaching a funding
agreement with Hiringa. EECA’s intention is to have agreed documents by mid-July 2021 to present to
Hiringa for them to accept or decline.
Christchurch Hydrogen Col ective
On 21 June EECA and MBIE officials met with AFCryo, a member of the Christchurch Hydrogen Collective
(CHC). This meeting was to discuss the CHC proposal - seeking Government support - for hydrogen buses
and a hydrogen/oxygen electrolyser. This follows your visit to AFCryo Ltd and Fabrum Solutions Ltd on
29 April 2021.
EECA officials will continue discussions with AFCryo and the CHC as appropriate.
Information withheld under section 9(2)(g)(i) and 9(2)(ba)
of the Official Information Act 1982.
FORTNIGHTLY REPORT
Title: EECA’s Fortnightly Report to the Minister of Energy and Resources
Date: 9 July 2021
Minimum Viable Hydrogen Refuel ing network
EECA continues to work constructively with Hiringa Energy to attempt to overcome various project
requirements and risks relating to the build of the refuelling stations and the purchase and operation of
the hydrogen trucks. The final due diligence has been completed which has validated and confirmed
several significate risks to the success of the project. EECA are about to make a final Crown funding
support offer to the applicant with several condition precedents the applicant will need to satisfy before
the end of August 2021.
A status updated wil be provided in the next Fortnightly Report.
FORTNIGHTLY REPORT
Title: EECA’s Fortnightly Report to the Minister of Energy and Resources
Date: 30 July 2021
DECISION SOUGHT: Low Emission Transport Fund scope
On 12 July 2021 EECA provided you with a briefing on the design of the Low Emission Transport Fund
(LETF) [EECA 2021 BRF 011 refers]. You subsequently agreed to al the recommendations included in the
briefing.
One of the recommendations in the briefing (Recommendation C) provided two options for you to
choose between, on which we seek your direction.
Recommendation C relates to funding, now the LETF can provide funding for low emission fuels (such as
hydrogen and biofuel).
Our preference is that, due to the high cost of projects related to the production and storage of fuels,
these projects should be excluded from the LETF. Instead, the LETF wil be able to fund projects more
directly related to the transport applications for these fuels. This would ensure equivalenc13.
e with how electricity is treated under the LETF.
We are currently undertaking operational design of the LETF, with the aim of launching the LETF by
October 2021.
Recommendation
EITHER
a. Agree that Focus Area 1 ‘demonstration’ excludes fuel production and storage (such as hydrogen and
biofuel) due to the high cost associated with these type of projects (EECA’s preferred approach)
Agree / Disagree
OR
b. Agree that Focus Area 1 ‘demonstration’ includes fuel production and storage
Agree / Disagree
FORTNIGHTLY REPORT
Title: EECA’s Fortnightly Report to the Minister of Energy and Resources
Date: 10 September 2021
Update on Christchurch Hydrogen Col ective
Following your meetings with members of the Christchurch Hydrogen Collective, EECA has participated
in the regular monthly meetings of the Collective.
The group (Global Bus Ventures, Christchurch International Airport, Christchurch City Council,
Environment Canterbury, Lyttleton Port and AFCryo) is aiming to establish a hydrogen users’ network to
speed up the adoption of hydrogen fuel use and establish Christchurch as a pilot for a model of a city-
wide working collective of users.
The Col ective has engaged the Government for funding. They sought
to contribute to
hydrogen production, the purchase of 10 hydrogen buses, and a diesel generator conversion project.
EECA has advised that
is outside of the Low Emission Transport Fund (LETF) budget, but a
scaled-back application would be considered. The Collective was also asked to consider the inclusion of
hydrogen trucks as an alternative to buses, which have already been funded by the Low Emission
Vehicles Contestable Fund (LEVCF) with Hyundai in Round 9. Hyundai and AFCryo have been introduced
and are in discussion.
It is worth noting that the economics of hydrogen production are substantial y enhanced where a viable
market for the oxygen produced is included. The Collective is in discussion with Canterbury District
Health Board as a buyer of medical grade oxygen. Other opportunities are also being explored, including
wastewater oxygenation and Antarctica New Zealand oxygen use.
In addition, Global Bus Ventures are investigating a straddle crane conversion project with Lyttleton port
as electrification will be challenging, and AFCryo are in discussion with Emirates Team New Zealand
regarding hydrogen foiling vessels to support the next America’s Cup campaign.
Update on shovel ready projects
Minimum viable hydrogen refuel ing network
EECA has signed the funding agreement with Hiringa for the four North Island refuelling stations and
received final IRG Minister approval for the project. Hiringa has a large number of condition precedents
that it will need to satisfy before 30 September 2021 to be able to draw down funding as part of the
agreement.
Hiringa is making good progress and officials are 75% confident it will complete its condition precedents
by the due date which will see construction of the first station at Te Rapa (subject to local authority
approvals) commence before the end of the calendar year.
Information withheld under section 9(2)(b)(ii) of the
Official Information Act 1982.
The funding agreement for the associated hydrogen trucks project is highly dependent on the outcome
of the Hiringa project. Close contact is being maintained with the recipient, TR Group, who is poised and
ready should the Hiringa deal proceed.
Overal , this project is looking more positive than it has since inception.
Electric and hydrogen-ready hybrid ferries
Negotiations between Auckland Transport, EECA and the applicants have paused while Auckland is in
Alert Level 4 and will continue again in Level 2.
. However, the current
COVID-19 alert levels are significantly slowing progress as key businesses who are providing the required
build costings are closed and their staff are not able to work remotely.
The project wil be reconsidered at the September or October 2021 Auckland Transport Board meeting
(subject to alert level settings). Further, good progress is being made on the approach to the electric
charging infrastructure (which is a key enabler of the project) as part of wider electric charging
infrastructure needed for public transport in Tāmaki Makaurau.
Information withheld under section 9(2)(b)(ii) of the
Official Information Act 1982.
FORTNIGHTLY REPORT
Title: EECA’s Fortnightly Report to the Minister of Energy and Resources
Date: 15 October 2021
Shovel ready projects update
Minimum Viable Hydrogen Refuelling Network Project
We have signed the funding agreement with Hiringa and TR Group for the four North Island refuel ing
stations and 20 heavy vehicles. Retrospective approval is being sought from IRG Ministers for the TR
Group funding agreement. Hiringa has satisfied all of its condition precedents and we made the first
payment to Hiringa this week. EECA is coordinating press releases with recipients for the next few
weeks.
Electric and Hydrogen-ready Ferries Project
Negotiations between Auckland Transport, EECA and the applicants have paused and wil continue again
in COVID-19 Alert Level Two.
. However, the current alert levels are significantly
slowing progress as key businesses that are providing the required build costings are closed and their
staff are not able to work remotely. The project wil be reconsidered at the October 2021 Auckland
Transport Board meeting (subject to alert level settings).
Information withheld under section 9(2)(b)(ii) of the
Official Information Act 1982.
FORTNIGHTLY REPORT
Title: EECA’s Fortnightly Report to the Minister of Energy and Resources
Date: 12 November 2021
Hydrogen aide memoire
EECA has been working with several New Zealand firms on hydrogen demonstration projects through
the delivery of hydrogen projects as part of the Low Emission Vehicles Contestable Fund (LEVCF) and the
$3 billion ‘shovel ready’ infrastructure programme.
Demonstration projects in New Zealand have the potential to provide valuable commercial assessments,
as well as safety, regulatory, technical and policy lessons for government. We are preparing an aide
memoire to update you on the projects and share insights learned so far on the hydrogen market for
heavy transport in New Zealand. We expect to provide this to you next week.
FORTNIGHTLY REPORT
Title: EECA’s Fortnightly Report to the Minister of Energy and Resources
Date: 26 November 2021
Shovel ready projects update
EECA has put advice to Infrastructure Reference Group (IRG) Ministers seeking the final approvals
required for our four remaining uncontracted shovel ready projects:
• Electric and Hydrogen-ready Hybrid Ferries
We have worked to overcome various difficulties,
and feasibility in
the form the projects were submitted, and we are now eager to receive Ministers’ approval for the
projects and get into delivery mode.
Information withheld under
section 9(2)(g)(i) of the Official
Information Act 1982.
FORTNIGHTLY REPORT
Title: EECA’s Fortnightly Report to the Minister of Energy and Resources
Date: 10 December 2021
Summer 2021/22 announcements pipeline
Indicative date
Project/milestone
Comment
February 2022
Shovel ready:
Physical works on the first
hydrogen refuel ing station
Hiringa hydrogen refuelling
begins February 2022 in
network / TR hydrogen trucks
Palmerston North (sod turning),
completed in September 2022
(ribbon cutting)
FORTNIGHTLY REPORT
Title: EECA’s Fortnightly Report to the Minister of Energy and Resources
Date: 5 August 2022
‘Shovel-ready’ projects update
Minimum Viable Hydrogen Refuelling Network
• Construction of Hiringa’s first hydrogen refuelling site in Palmerston North commenced in May
2022. Even with some global supply chain delays, all four sites are still scheduled for completion
by June 2023.
• Delivery of TR Group’s 20 hydrogen trucks has been delayed.
Information withheld under section 9(2)(b)(ii)
of the Official Information Act 1982.
FORTNIGHTLY REPORT
Title: EECA’s Fortnightly Report to the Minister of Energy and Resources
Date: 19 August 2022
Update on ‘shovel-ready’ project hydrogen trucks
Hiringa Energy and TR Group are delivering a joint Infrastructure Reference Group ‘shovel-ready’ project
for four hydrogen refuel ing stations in the North Island and 20 heavy hydrogen trucks.
Hyzon has also advised TR Group that its trucks will not meet the range and performance that was
originally quoted, largely due to being able to carry less fuel (they will have less tanks) and possibly not
being as fuel efficient. TR Group is working with Hyzon to understand more about the performance
impacts and will be discussing this with its customers. Initial indications are this will not be of major
concern to end users.
The refuel ing network build and truck delivery are both currently scheduled for completion towards the
end of 2023. We wil keep you informed of any updates.
Information withheld under section 9(2)(b)(ii)
of the Official Information Act 1982.
FORTNIGHTLY REPORT
Title: EECA’s Fortnightly Report to the Minister of Energy and Resources
Date: 2 September 2022
The Hydrogen Refuelling Network project is now expected to be delivered by 31 December 2023
In the officials meeting on 29 August 2022, you requested further information on delivery timeframes
for the Infrastructure Reference Group ‘shovel-ready’ Minimum Viable Hydrogen Refuelling Network
project.
Information Hiringa Energy is installing four hydrogen refuelling stations in the North Island. It is receiving a $16
withheld
million loan from the Covid Response and Recovery Fund,
under
Construction is now
section
9(2)(b)(i) of underway, with the build of the first refuelling station in Palmerston North beginning in May 2022. The
the Official refuelling stations were originally expected to be completed by February 2023. However, Hiringa’s
Information suppliers are in Europe and supply chain constraints related to COVID-19 and the war in Ukraine have
Act 1982. caused delays.
.
TR Group is receiving a $4 million Covid Response and Recovery Fund grant and a further $2 million
EECA grant to deliver 20 heavy hydrogen fuel cell trucks that will utilise the Hiringa refuelling network.
TR Group has placed the order from its supplier, Hyzon.
Information
withheld
under
section 9(2)
(ba)(i) of the
Official
Information
Act 1982.
There are ongoing risks facing both components of this project. Global supply chain issues are putting
both Hiringa and TR Group at risk of experiencing further delivery delays and potential increases to
expected costs. TR Group has also been advised the trucks from Hyzon wil likely not be able to meet the
range and performance that was originally quoted. EECA continues to work with Hiringa and TR Group
to understand project delivery progress and risks, and we wil keep you informed of any updates.
QUARTERLY REPORT
Title: First Quarter Report 2018/19
Date: 1 July to 30 September 2018
Efficient and low-emissions transport
Switching the fleet to low-emissions technology while ensuring that any remaining fossil-fuelled vehicles
are as efficient as possible
Activity
Measure of success
YTD Result for 2018/19
Work across
EECA’s contribution is reflected in We contributed to, and influenced, the
government to develop future policy documents that
low emissions vehicle work programme
policy options to
accelerate New Zealand’s
led by the Ministry of Transport.
improve New Zealand’s transition to a low carbon
Ministers were briefed in October.
transition to a low
transport system.
Cabinet is considering the proposed new
carbon transport
work programme in Q2.
system
EECA has contributed market or
We partnered with public and private
technology knowledge to
sector agencies on a research report on
investigations and any resulting
emerging hydrogen technology
actions.
QUARTERLY REPORT
Title: 2020/21 Second Quarter Report
Date: 1 October – 31 December 2020
Key developments in Q2
Transport programmes (p.5)
The Low Emission Vehicles Contestable Fund (LEVCF) offers up to $6.5 mil ion a year to projects that wil
accelerate the uptake of electric and other low emission vehicles.
20. The successful recipients of Round 9 of the Low Emission Vehicle Contestable Fund (LEVCF) have
been confirmed. We have conditionally approved 22 projects totalling $3.7 million in government co-
investment. The successful applicants will contribute over $9.3 million of their own money, bringing the
combined investment to more than $13.1 million. The 22 projects range from increasing the number
and availability of public charging stations to demonstrating a fleet of hydrogen fuel cell electric
vehicles.
21. Since 2018, the LEVCF has committed co-funding to over 1,100 private and public electric vehicle
chargers, contributing to New Zealand’s wider charging infrastructure and enabling electric vehicle
uptake. There is now at least one public electric vehicle charger every 75km on almost al New Zealand
state highways.
22. In Round 9, funding was approved for five hydrogen demonstration trucks. These are the first
hydrogen trucks funded under the LEVCF.
Priority activities for Q3
23. Due to the lack of sufficient quality and innovation of applications in recent rounds of the LEVCF,
Round 10 of the fund wil ‘pivot’ to a likely focus on public charging and other high value initiatives. The
Request for Proposals for Round 10 has been deferred by two months to March to al ow EECA to review
the investment criteria, develop a charging infrastructure vision and consider broadening the fund’s
scope to include other high impact areas.
24. In Q3 we wil continue to work closely with our project partners to ensure successful delivery of
projects and the outcomes they seek.
Measuring and reporting energy and emissions savings (p.5)
Support the COVID-19 response and economic recovery
EECA supports the COVID-19 response and recovery through delivery oversight of five Shovel
Ready projects.
26. EECA is responsible for delivery oversight of five Infrastructure Reference Group (IRG) Shovel
Ready projects, one of which is a thermal drying facility replacement with New Plymouth District
Council. In Q2, EECA entered into a funding agreement with New Plymouth District Council for
the project which includes:
d. Equipment and designs to enable the use of hydrogen as a low-greenhouse gas fuel
supplementary to the natural gas used to heat the dryer.
QUARTERLY REPORT
Title: 2020/21 Third Quarter Report
Date: 1 January – 31 March 2021
Key developments in Q3
Transport programmes (p.6)
The Low Emission Vehicles Contestable Fund (LEVCF) offers up to $6.5 million a year to projects that will
accelerate the uptake of electric and other low emission vehicles.
32. New Zealand’s first hydrogen fuel cel bus, which received co-funding in Round 5 of the LEVCF, was
launched in Auckland by the Minister of Transport on 30 March 2021.
Support the COVID-19 response and economic recovery (p.7)
EECA supports the COVID-19 response and recovery through delivery oversight of five Shovel Ready
projects.
43.
Electric and Hydrogen-ready Hybrid Ferries: Due diligence has been completed and the final
recommendation to proceed with the project has been submitted to IRG Ministers for their approval.
Once IRG Ministers have made their decision the project can progress to the final design and build
phase.
44.
Minimum Viable Hydrogen Refuel ing network: We continues to work constructively with the
applicant to attempt to overcome various project requirements and risks relating to the build of the
refuel ing stations and the purchase and operation of the hydrogen trucks.
QUARTERLY REPORT
Title: 2020/21 Fourth Quarter Report
Date: 01 April – 30 June 2021
Key developments in Q4
Support the COVID-19 response and economic recovery (p.9)
56.
Electric and Hydrogen-ready Hybrid Ferries: Infrastructure Reference Group Ministers have
approved the release of Crown funding to implement the project. New Zealand Green Investment
Finance is no longer involved in the project, but positive discussions are happening between Auckland
Transport and the Applicants about the construction timetable of the vessels.
57.
Minimum Viable Hydrogen Refuelling Network: EECA continues to work constructively with the
Applicant to attempt to overcome various project requirements and risks relating to the build of the
refuel ing stations and the purchase and operation of the hydrogen trucks. This remains a high-risk
project.
QUARTERLY REPORT
Title: 2021/22 First Quarter Report
Date: 01 July – 30 September 2021
Key developments in Q1
Supporting the COVID-19 response and economic recovery (p.7)
EECA supports the COVID-19 response and recovery through delivery oversight of five Shovel Ready
projects.
38. Electric and Hydrogen-ready Hybrid Ferries: Negotiations between Auckland Transport, EECA and
the applicants have paused and wil continue again in Alert Level Two.
However, the current COVID-19 alert levels are significantly slowing progress as key businesses who are
providing the required build costings are closed and their staff are not able to work remotely. The project
wil be reconsidered at the October 2021 Auckland Transport Board meeting (subject to alert level
settings).
39. Minimum Viable Hydrogen Refuel ing Network: We have signed the funding agreement with
Hiringa and TR Group for the four North Island refuel ing stations and 20 heavy vehicles. Retrospective
approval is being sought from Infrastructure Reference Group Ministers for the TR Group funding
agreement. Hiringa has satisfied all of its condition precedents and we have made the first payment to
Hiringa.
Information withheld under section 9(2)(ba)(i) of the
Official Information Act 1982
QUARTERLY REPORT
Title: 2021/22 Second Quarter Report
Date: 1 October – 31 December 2021
Key developments in Q2
Supporting the COVID-19 response and economic recovery (p.8-9)
EECA supports the COVID-19 response and recovery through delivery oversight of five Shovel Ready
projects.
33.
Electric and Hydrogen-ready Hybrid Ferries: The fixed-price cost of the two high speed electric
ferries has increased by $14 million from $20 million to $34 million due to inflation and other cost
pressures as a result of the COVID-19 pandemic.
. To cover the delta, Minsters have approved an
additional grant of up to $7 million for the project. Minsters have also approved EECA to enter into the
required funding agreement with Auckland Transport to implement the project. EECA is working to get
this signed in early 2022.
34.
Minimum Viable Hydrogen Refuelling Network: EECA has signed the funding agreement with
Hiringa and TR Group for the $20 million project which will deliver four North Island hydrogen refuelling
stations and 20 heavy hydrogen vehicles. Retrospective approval has been sought from Ministers for the
TR Group funding agreement. The project is underway, with an order for the trucks placed and
construction of the first refuelling site forecasted to commence in February 2022.
Information withheld under section 9(2)(b)(ii) of the
Official Information Act 1982.
QUARTERLY REPORT
Title: 2021/22 Third Quarterly Report
Date: 1 January – 31 March 2022
Key developments in Q3
Supporting the COVID-19 response and economic recovery (p.10)
EECA supports the COVID-19 response and recovery through delivery oversight of six ‘Shovel Ready’
projects.
Minimum Viable Hydrogen Refuelling Network 46. In September 2021, EECA signed funding agreements with Hiringa and TR Group to deliver a
$37 million project for four hydrogen refuelling stations in the North Island and 20 heavy
transport hydrogen trucks. Hiringa will receive a $16 million COVID-19 Response and Recovery
Fund loan ($5 million of which will become a grant should certain delivery milestones be
achieved) and TR Group will receive a $4 million COVID-19 Response and Recovery Fund grant
(alongside an additional $2 million EECA grant). The construction of the first hydrogen refuelling
site is expected to commence in May 2022 with al four sites scheduled for completion in
February 2023.
Information withheld under section 9(2)(ba)(i) and 9(2)(b)(ii)
of the Official Information Act 1982
QUARTERLY REPORT
Title: 2021/22 Fourth Quarter Report
Date: 1 April – 30 June 2022
Key developments in the fourth quarter
Supporting the COVID-19 response and economic recovery
EECA supports the COVID-19 response and recovery through delivery oversight of six ‘Shovel Ready’
projects.
Minimum Viable Hydrogen Refuel ing Network (p.10-11)
Hiringa and TR Group will deliver a $37 million project for four hydrogen refuelling stations in
the North Island and 20 heavy transport hydrogen trucks. Hiringa is receiving a $16 million CRRF
loan ($5 million of which will become a grant if certain delivery milestones are achieved) and TR
Group is receiving a $4 million COVID-19 Response and Recovery Fund grant (alongside an
additional $2 million EECA grant).
35. Construction of the first hydrogen refuelling site has commenced. Construction of the
Palmerston North refuelling site commenced in May 2022 with all four sites scheduled for
completion by June 2023.
36.
Information withheld under section 9(2)(ba)(i) and 9(2)
(b)(ii) of the Official Information Act 1982
QUARTERLY REPORT
Title: 2022/23 First Quarter Report
Date: 1 July – 30 September 2022
Key developments in the first quarter
Supporting the COVID-19 response and economic recovery (p.8)
EECA supports the COVID-19 response and recovery through delivery oversight ‘Shovel Ready’ projects
that are receiving funding from the Government’s COVID-19 Response and Recovery Fund (CRRF).
Minimum Viable Hydrogen Refuelling Network Project
Hiringa and TR Group wil deliver a $37.0 mil ion project for four hydrogen refuel ing stations in
the North Island and 20 heavy transport hydrogen trucks. Hiringa is receiving a $16.0 mil ion
CRRF loan ($5.0 million of which wil become a grant if certain delivery milestones are achieved)
and TR Group is receiving a $4.0 mil ion CRRF grant (alongside an additional $2.0 mil ion EECA
grant).
27.
Construction of the first hydrogen refuel ing site continues. Construction of the Palmerston
North refuelling site is progressing, and all four sites are scheduled for completion by 30
Information withheld September 2023.
under section 9(2)
(ba)(i) and 9(2)(i) of
the Official
Information Act
1982.
28.
Delivery of the hydrogen trucks has been delayed and expected performance has
decreased. Supply chain constraints related to COVID-19 lockdowns in Shanghai have caused
multiple delays with the build of the Hyzon hydrogen trucks as the fuel cells are manufactured in
Shanghai.
Information withheld
.
under section 9(2)
(ba)(i) and 9(2)(b)(ii)
of the Official
Information Act 1982
Document Outline
