South Australia could hold the key to cracking the clean hydrogen conundrum.
Speaking at the Australian Pipelines and Gas Association Convention, South Australia Minister for Energy and Mining Tom Koutsantonis shed some light on the state’s energy ambitions.
In the realm of energy, South Australia has much to be proud of. The state shut down the last of its coal-fired power stations in 2016, and is now running off a mix of solar, wind and gas.
In fact, South Australia is on track to source 100 per cent of its electricity from renewables by 2030.
But Koutsantonis also noted that South Australia is often forced to switch off its renewable sources due to oversupply. While the state is home to the 150 megawatts (MW) Hornsdale power reserve – one of the largest battery storage facilities in the world – significant energy leakage remains.
To combat this, the state is turning to hydrogen.
“Hydrogen is a difficult and expensive fuel to manufacture, but in South Australia, we have an over-abundance of renewable energy,” Koutsantonis said.
“Instead of turning off renewable farms and rooftop solar, the question for us is: what can we do with this excess solar energy?
“Can we harness this energy and use it to manufacture a gas that is expensive to manufacture in every other jurisdiction in the world, and can we put it to use here?”
To this end, the South Australian Government has committed more than half a billion dollars to building the Whyalla Hydrogen Power Facility. This project includes constructing 250MW electrolysers – some of the world’s largest. This also includes 200MW of power generation and a 100-tonne renewable hydrogen storage facility. Construction is scheduled for completion in early 2026.
The process of electrolysis involves using electricity to split water into hydrogen and oxygen. The process is energy-intensive, which is one of the major hurdles with nascent hydrogen initiatives. However, Koutsantonis hopes that South Australia’s readily available solar energy may solve this problem.
When operational, Whyalla will play a major role in decarbonising Australia’s steel industry. Hydrogen can be used as a reductant in the steel-making process to drive down carbon emissions.
While there has been talk about shipping Australian hydrogen overseas alongside other exports, Koutsantonis said it would better serve the domestic market.
“We believe you should use the hydrogen where you make it,” he said.
“Transporting hydrogen is too cost prohibitive today. It would be better for us to decarbonise the product at various levels here [on Australian soil], creating complex jobs, and then export that decarbonised product to the world.”
While Whyalla is some years off, the state is being proactive about its hydrogen usage.
“South Australia is currently running a trial on integrated hydrogen in the domestic gas distribution network,” Koutsantonis said.
“This means that there are homes in South Australia running off 20 per cent hydrogen as we speak, boiling their water, cooking their pasta, and being used in heating.”
To better enable the uptake of hydrogen and renewables, Koutsantonis and the Labor Goverment in South Australia introduced the Hydrogen and Renewable Energy Act in 2023, which collapsed six pieces of energy legislation into one.
“To lead the way, what we’ve done is introduce a regulatory framework that contemplates the future – that contemplates biofuels, geothermal, battery storage, and hydrogen.”
The Act is intended to streamline investment in large-scale energy projects, bringing issues such as land access, environmental impacts, and native titled rights into one framework.
While some jurisdictions are only tentatively committed to renewables, South Australia is all in. The state’s latest hydrogen initiative is certainly one to watch.
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