South Australia

South Australia – Hydrogen Industry Policy Initiatives

Hydrogen Action Plan

In September 2019, the South Australian Government released South Australia’s Hydrogen Action Plan. The Plan identifies domestic and export market opportunities for hydrogen produced using renewable energy generated in South Australia.

The Action Plan outlines 20 actions across five themes, with the objective of scaling up renewable hydrogen production for export and domestic consumption and enabling South Australia to become a world-class renewable hydrogen supplier.

The South Australian government launched the South Australian Hydrogen Export Prospectus at the end of October 2020. The Prospectus identifies three hydrogen hub possibilities for South Australia – at Port Bonython, Port Adelaide and Cape Hardy/Port Spencer.

SA hydrogen report

Port Bonython Hydrogen Hub

In May 2021, the South Australian government sought Expressions of Interest (EOI) from investors to develop State held land at Port Bonython. As part of the EOI process, the government facilitated a site planning exercise to determine land parcel offerings for shortlisted respondents to support the proposed hydrogen developments. In February 2024, the South Australian Government announced that it had signed Development Agreements with five Port Bonython Hydrogen Hub partners. The Development Agreements provide a pathway to a long-term lease over land.

Master-planning commenced with project partners in April 2023.  Consultation with the community and project stakeholders is occurring as part of the planning process and will continue over the project life cycle.

The Australian Federal Government, through the Regional Hydrogen Hubs Program – Hubs Implementation funding stream, is providing up to AUD$70 million in matched funding support to the South Australian Government’s Port Bonython Hydrogen Hub initiative. This grant is matched by the South Australian Government having committed AUD$30 million towards the development of a hydrogen hub at Port Bonython, with a further AUD$40 million expected to be contributed by project partners. In September 2023, in a joint release, the Australian and South Australian Governments announced they had finalised a grant agreement to develop the Port Bonython Hydrogen Hub.

From 1 March 2023, the Port Bonython Hydrogen Hub project was incorporated into the Office for Hydrogen Power SA, along with hydrogen industry development functions.

Regulation

Energy Resources Act 2000

The Petroleum and Geothermal (Energy Resources) Amendment Act 2023, which amends the Petroleum and Geothermal Act 2000, passed South Australian Parliament in November 2023. The amended Act, now known as the Energy Resources Act 2000, commenced in April 2024 after the completion of the associated Energy Resources Regulations 2013. The bulk of the amendments were improvements to efficiency, clarity and transparency of existing regulatory processes.

The hydrogen generation licensing provisions included in the draft Bill of 2021 were removed and are now included in the separate Hydrogen and Renewable Energy Act 2023 (see below). However, pipeline transportation of hydrogen, exploration for natural hydrogen and underground storage of hydrogen remains in the Energy Resources Act 2000.

Hydrogen and Renewable Energy Act

In May 2023, the South Australian Government commenced consultation on the Hydrogen and Renewable Energy Bill, which sought to introduce a ‘one window to government’ licencing and regulatory system for the lifecycle of all large-scale hydrogen and renewable energy projects in South Australia.

In November 2023, the South Australian Government announced that the Hydrogen and Renewable Energy Act 2023 had passed both Houses of the South Australian Parliament. In March 2024, the South Australian Government announced that it has proposed a set of supporting regulations and was undertaking consultations on these regulations, with the consultation period closing 15 April 2024.  The Act is expected to commence in 2024.

Under the Act:

  • Government owned land and waters where renewable energy projects can be hosted will be identified by the South Australian Government
  • Companies will compete for licences to access government owned land and waters to deliver these projects
  • New, fit for purpose licensing arrangements will be established for projects across all land types, enabling regulation of the whole project life cycle
  • First Nations people’s rights and interests will be considered early and throughout the regulatory processes
  • A framework will ensure that developments are delivered with net environmental benefit
  • Requirements will be put in place to ensure land is rehabilitated and returned to pre-existing conditions
  • Multiple land use provisions will be sought to deliver fair outcomes for landowners, communities and other pre-existing land rights holders.

Hydrogen Jobs Plan and the Office of Hydrogen Power SA

In June 2022, in the 2022-23 State Budget, the South Australian government’s ‘Hydrogen Jobs Plan’ power plant project was announced. The commitment includes AUD$593 million to build a green hydrogen power station, electrolyser and storage facility near Whyalla. The project includes:

  • 250MWe of electrolysers
  • 200MW of power generation
  • hydrogen storage

The Office of Hydrogen Power South Australia was established to oversee the design and delivery of the Hydrogen Jobs Plan facility, including the early procurement, contracting and construction stages.

In October 2023, a consortium comprising ATCO Australia and BOC was announced as the preferred hydrogen delivery partner, with the consortium having committed to an Early Contractor Involvement (ECI) agreement with the State Government which would progress detailed project and engineering design, procurement of critical equipment, finalise contracting arrangements, and cost estimations. It was also announced that the Government has entered an ECI agreement with South Australian energy infrastructure company EPIC Energy to develop an integrated pipeline and hydrogen storage solution.

In February 2024, the South Australian Government announced the nomination of GE Vernova as the preferred supplier for the project’s (100% run) hydrogen turbines for power generation.

Up to date information on the project is published to the Office for Hydrogen Power SA website:  https://www.ohpsa.sa.gov.au/

Offtake for industrial applications also forms part of the Hydrogen Jobs Plan. In February 2024, the South Australian Government announced that it had reached agreement with GFG Alliance to explore opportunities for hydrogen offtake from the Hydrogen Jobs Plan facility in decarbonisation of the Whyalla steelworks.

In August 2023, the South Australian Government launched two publications that map and promote the capability of local businesses to service the state’s green hydrogen industry:

Green Iron Opportunity

South Australia’s Green Iron and Steel Strategy – part of the South Australian Government’s State Prosperity Project – was released in June 2024

The strategy’s stated objectives are to:

  • Enhance South Australia’s competitive advantage
  • Establish local green steel industry foundations
  • Ensure a sustainable, long-term industry and share prosperity.

As part of the strategy, the government is seeking involvement from businesses to jointly investigate and invest in building a green supply chain. A formal Expression of Interest (EOI) is now in progress, with submissions due 1 October 2024.

Northern Water Project

The Northern Water project aims to provide a new, climate independent water source for the Far North, Upper Spencer Gulf and Eastern Eyre Peninsula regions of South Australia, to enable the growth of industries crucial to achieving net-zero, including expansion of copper production and the emerging green hydrogen industry.

The final decision to proceed with construction of the desalination plant and 600-kilometre transfer pipeline is expected in late 2025 through to early 2026.

Investment in Hydrogen Projects 

The South Australian Government has awarded grants and loans of around AUD$15 million to hydrogen projects through South Australia’s AUD$150 million Renewable Technology Fund, including AGIG’s Hydrogen Park South Australia Project (HyP SA) and H2U’s Eyre Peninsula Gateway Project.

A further project, Trafigura’s Port Pirie Green Hydrogen Project, received an AUD$2.5 million grant in December 2021 from the state’s Jobs and Economic Growth Fund, to accelerate the Front-End Engineering and Design (FEED) for the project.

Other Programs and Initiatives

In March 2021, the Government of South Australia announced the signing of a Memorandum of Understanding (MOU) with the Port of Rotterdam Authority in the Netherlands to study the feasibility of exporting green hydrogen from South Australia to Rotterdam, Europe’s largest port. In December 2021 a pre-feasibility study was released showing South Australian hydrogen is expected to be competitive on the future hydrogen market in Rotterdam.

In October 2022, it was announced that several Australian and Japanese companies have signed statements of cooperation with the State Government to accelerate the development of the hydrogen industry in South Australia

In May 2024, South Australia signed a letter of cooperation with the State of California. Both states have agreed to work together to advance renewable energy and clean hydrogen technology.

 

Updated: June 2024