Vast Renewables Limited (Nasdaq: VSTE) has announced the signing of a Joint Development Agreement (JDA) with global energy company Mabanaft to advance the Solar Methanol 1 (SM1) project, a concentrated solar thermal power (CSP)-powered green methanol reference plant located in South Australia.
The SM1 plant will be situated at the Port Augusta Green Energy Hub and have an annual production capacity of 7,500 tonnes of green methanol.
Vast’s 30 MW / 288 MWh CSP plant will supply baseload renewable heat to the project.
Using CSP technology can potentially reduce green fuel production costs by up to 40 per cent, according to a recent report by engineering group Fichtner.
The project’s success could unlock green fuel production in Australia, with potential for exports to Germany and other global markets.
As part of the funding agreements, Vast will receive $19.48 million from the Australian Renewable Energy Agency (ARENA), while Mabanaft will receive up to €12.4 million from Projektträger Jülich (PtJ) on behalf of the German government, as part of HyGATE, a collaboration between the Australian and German governments to support real-world projects along the hydrogen supply chain.
The JDA also includes a framework agreement securing offtake rights for Mabanaft for future green fuel projects powered by Vast technology.
Vast and Mabanaft are developing SM1 with the Solar Methanol Consortium and are supported by Calix as the Principal CO2 Supply Partner and the Australian Solar Thermal Research Institute (ASTRI).
Craig Wood, CEO of Vast, expressed his excitement about the JDA, stating: “The JDA is a significant milestone for SM1, which has the potential to demonstrate how Vast technology can unlock low-cost green fuel production to contribute to decarbonising the global shipping and aviation industries.
“Vast is excited to continue our partnership with Mabanaft, and the execution of this agreement is a testament to our joint commitment to pioneer green fuel production globally.”
Philipp Kroepels, Director of New Energy at Mabanaft, emphasised the company’s commitment to enabling its customers’ energy transition.
He said, “As a leading energy solution provider, we are committed to enabling our customers’ energy transition.
“And we believe that methanol, in particular, can play an important role in the shipping industry, and Mabanaft is well positioned to build supply chains to meet that growing demand.”
The signing of the JDA marks a significant step forward in the development of the SM1 project, which aims to demonstrate the potential of CSP technology in producing low-cost green fuels and contributing to the decarbonisation of hard-to-abate industries.