Vast Renewables has signed a joint development agreement with global energy company Mabanaft to advance the Solar Methanol 1 (SM1) project.
SM1, a CSP-powered green methanol reference plant, will be located in South Australia’s Port Augusta Green Energy Hub and aims to produce 7,500 tonnes of green methanol annually.
Green methanol, a versatile hydrogen derivative, holds significant potential for decarbonizing hard-to-abate industries such as shipping and aviation. The SM1 plant will be powered by Vast’s 30 MW / 288 MWh concentrated solar thermal power (CSP) system, which could reduce green fuel production costs by up to 40 percent, according to a report by engineering group Fichtner. The success of SM1 could pave the way for large-scale green fuel production in Australia, with export potential to Germany and other global markets.
The JDA outlines the development of SM1 and emphasizes the collaboration between Vast and Mabanaft, combining technological, business development, and commercial expertise. This agreement follows the announcement of funding agreements for SM1 in February, which include up to AUD $40 million.
Vast will receive AUD $19.48 million from the Australian Renewable Energy Agency (ARENA), while Mabanaft will potentially receive up to €12.4 million from Projekttrager Julich (PtJ) on behalf of the German government. This funding is part of HyGATE, a collaboration between the Australian and German governments to support hydrogen supply chain projects.
Mabanaft is expanding its energy solutions to support its customers’ decarbonization efforts. The JDA includes a framework agreement securing offtake rights for Mabanaft for future green fuels projects powered by Vast technology, enabling Mabanaft to supply green fuels to its shipping customers.
The development of SM1 involves the Solar Methanol Consortium and is supported by Australian technology company Calix as the Principal CO2 Supply Partner and the Australian Solar Thermal Research Institute (ASTRI).
Craig Wood, CEO of Vast, said: “JDA is a milestone for SM1, demonstrating how Vast technology can unlock low-cost green fuel production and contribute to decarbonizing the shipping and aviation industries.”
Philipp Kroepels, Director of New Energy at Mabanaft, said: “Methanol can play an important role in the shipping industry, and Mabanaft is well-positioned to build supply chains to meet that growing demand.”