South Australia

South Australia – Hydrogen Industry Policy Initiatives

In August / September 2017, the South Australian Government released two hydrogen-related reports: the South Australian Green Hydrogen Study and A Hydrogen Roadmap for South Australia.

The Green Hydrogen study was commissioned by the State Government to examine the role of hydrogen in decarbonising the South Australian economy and the cost and feasibility of producing renewable hydrogen in South Australia.

The Hydrogen Roadmap considers various options for developing a hydrogen economy and was intended to help guide the strategic development of a hydrogen industry in South Australia.

SA hydrogen reportBuilding on these releases, 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 five action themes are:

  1. Facilitate investments in hydrogen infrastructure.
  2. Establish a world-class regulatory framework.
  3. Deepen trade relationships and supply capabilities.
  4. Foster innovation and workforce skills development.
  5. Integrate hydrogen into our energy system.

In September 2019, the South Australia Government also announced the development of a South Australian Hydrogen Export Modelling tool and a pre-feasibility study into large-scale clean hydrogen production in South Australia for export to prospective markets in Asia. The outcomes of the study will be used to produce an online modelling tool and prospectus for use by international hydrogen customers, infrastructure developers and investors, to support the development of clean hydrogen export projects in South Australia.

The South Australian Hydrogen Export Modelling Tool and the South Australian Hydrogen Export Prospectus were launched at the end of October 2020. The Tool provides an indicative view of hydrogen supply chain configurations that are possible by leveraging regional resources. The Prospectus identifies three hydrogen hub possibilities for South Australia – at Port Bonython, Port Adelaide and Cape Hardy/Port Spencer.

In November 2020, the Premier of South Australia announced the allocation of AUD$37 million from the (then upcoming) 2020/21 State Budget to upgrade the existing Port Bonython jetty, to support the export potential of South Australia and the State’s ambition to become a significant exporter of green energy.

In February 2021, the Governor of South Australia proclaimed a regulatory amendment declaring hydrogen to be a regulated substance under the South Australian Petroleum and Geothermal Energy (PGE) Act 2000 and was published in the Government Gazette.

Also in February 2021, the South Australian Department for Energy and Mining published an Issues Paper on proposed amendments to the PGE Act 2000. While the review primarily focuses on enhancing existing provisions, the amendments would also expand the scope of the Act to cover pipeline transportation of future fuels such as hydrogen.

In March 2021, the Government of South Australia announced the signing of a Memorandum of Understanding 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 April 2021, the Australian and South Australian Governments jointly announced a AUD$1.08 billion State Energy and Emissions Reduction Deal, to which the Commonwealth would contribute AUD$660 million and South Australia AUD$422 million. A key component of the deal includes AUD$400 million in Commonwealth funding for investment in priority areas, with hydrogen included among a range of emissions reduction technologies.

In June 2021, in response to submissions received to the above noted Issues Paper on proposed amendments to the PGE Act 2000, a draft Bill to amend the PGE Act 2020 was released for public comment (with submissions closing on 25 June 2020). The Minister for Energy and Mining intends to table the Bill during July 2021. Details of proposed Hydrogen Energy Licencing provisions included as part of the proposed amendments are found in an accompanying Explanation Paper.

In May 2022, the South Australia government announced plans to progress dedicated hydrogen legislation that would license and regulate the production of hydrogen in South Australia, providing a single window into government for licensing and regulating hydrogen generation projects. The scope of the new law will cover manufacturing of all forms of hydrogen, including green hydrogen made from renewable energy, and blue hydrogen manufactured from methane in conjunction with carbon capture and storage to permanently sequester the associated carbon dioxide emissions

In June 2022, in the 2022-23 State Budget, a ‘Hydrogen Jobs Plan’ was announced with AUD$593 million allocated over four years for the establishment of a new hydrogen facility including electrolysers, a combined cycle turbine plant and hydrogen storage capacity in the Whyalla region.  A six-week market sounding process calling for design and delivery concepts for the construction of the hydrogen facility closed in July 2022.

Also included in the 2022-23 State Budget is AUD$30 million allocated towards a Clean Hydrogen Industrial Hub at Port Bonython.

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

The October 2022-2023 federal budget released on 25 October 2022 confirmed funding awards to South Australian based projects via the Commonwealth Government’s Regional Hydrogen Hubs Program:

Hub Implementation Grants

  • South Australian Government’s Port Bonython Hydrogen Hub – up to AUD$70 million

Hub Development and Design Grants

  • Santos Moomba Clean Hydrogen FEED – up to AUD$3 million

Around AUD$15 million in grants and more than AUD$25 million in loans have been awarded to three (megawatt-scale) hydrogen-related projects through South Australia’s AUD$150 million Renewable Technology Fund following its launch in 2017 (with conditions precedent for those yet to enter construction).

  • Hydrogen Park South Australia
  • Eyre Peninsula Gateway Project
  • Neoen Australia Hydrogen Superhub (Crystal Brook Energy Park) (Note: the hydrogen-related component of this solar development is not progressing at this site.)

A fourth project, the Port Pirie Green Hydrogen Project, received a 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.

 

Updated: October 2022