Australia, Projects, Renewables, Storage

Underground hydrogen storage project gains traction

The Australian Renewable Energy Agency (ARENA) has announced $2 million in funding for Lochard Energy’s H2RESTORE project, which aims to pave the way for large-scale hydrogen production and storage in Victoria’s onshore Otway Basin.

The $6.3 million feasibility study is the second stage of the project, which seeks to bolster the national electricity market through long-duration seasonal energy storage in the form of hydrogen.

ARENA chief executive officer (CEO) Darren Miller underscored the significance of the project.

“Renewable hydrogen has an important role to play in helping Australia reach net-zero, but cost-effective storage is a looming challenge for the industry,” he said. “Solving the storage issue will be critical to enabling renewable hydrogen to be used as a form of long duration energy storage in Australia.”

The H2RESTORE project is designed to generate hydrogen via electrolysis, utilising excess energy from the national electricity market. The hydrogen will then be stored underground and converted back into electricity when demand is high and supply is low, effectively firming the grid.

Lochard Energy, which has a track record of supporting energy security and reliability in Victoria through its Iona Gas Storage Facility, plans to repurpose its existing underground gas storage reservoirs for hydrogen storage. This approach could substantially reduce storage costs and enable longer-duration seasonal storage of renewable hydrogen.

The feasibility study, which commenced in early 2024, aims to confirm the technical feasibility of storing hydrogen deep underground in porous rock formations, develop a concept design for an initial pilot facility, and progress planning, design and techno-economic analyses for a potential commercial underground hydrogen storage facility.

Lochard Energy CEO Tim Jessen welcomed ARENA’s support.

“We are thrilled to receive this support from ARENA, which recognises the potential of the H2RESTORE project to transform the way energy is stored and utilised as Australia transitions to net zero emissions,” Jessen said.

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