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.

The South Australian Government subsequently signed Development Agreements with proposed developers of the Port Bonython Hydrogen Hub. These 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. The Commonwealth’s funding is currently matched by AUD$30 million from the Government of South Australia with AUD$40 million to be leveraged from 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

The Hydrogen and Renewable Energy Act 2023, which came into operation on 11 July 2024, regulates and licences large-scale hydrogen and renewable energy projects across South Australia. The Hydrogen and Renewable Energy Act is a regulatory framework that:

  • Licences and regulates the entire lifecycle of renewable energy and hydrogen projects
  • Expedites the development of the state’s hydrogen sector and supports the delivery of the Hydrogen Jobs Plan
  • Recognises that Aboriginal participation in decision-making is central to South Australia’s clean energy future
  • Maintains the government’s commitment to multiple land use. It recognises all other overlapping legal rights over the same land such as pastoral leases, mining tenements and licences.
  • Ensures proponents effectively address environmental, economic, public safety and social and cultural impacts in line with environment, social and governance requirements and
  • Delivers investment certainty and security.

The South Australian Government is working to identify areas of the state that would be suitable for large scale renewable energy developments, in consultation with all relevant stakeholders and community.  These areas will be released through a competitive tender process to attract early investment into South Australia’s renewable energy transition.

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. In November 2024, it was announced that the South Australian Government had secured an agreement with ATCO Australia to contract GE Vernova to supply its aeroderivative gas turbine solution, capable of running on 100% renewable hydrogen, for the project.

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 objectives. In February 2024, the South Australian Government announced that it had reached agreement with the GFG Alliance to explore opportunities for hydrogen offtake from the Hydrogen Jobs Plan facility to support the decarbonisation of the Whyalla steelworks.

In August 2024, it was announced that the project had received development approval under the state’s Planning, Development and Infrastructure Act 2016.

In October 2024, the project received a notification of approval decision (subject to conditions) from the Australian Government under the Environment and Protection and Biodiversity Conservation Act 1999 (EPBC Act).

The South Australian Government has launched two resources to map and promote the capability of local businesses to service the state’s renewable 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 launched an Expression of Interest (EOI) to seek involvement from businesses to jointly investigate and invest in building a green supply chain in South Australia. The EOI closed on 1 October 2024.

Submissions were received from diverse industry sectors including iron and steel makers, green iron technology providers, a magnetite iron ore supplier, project developers, large-scale renewable energy and hydrogen project developers, as well as infrastructure owners and investors. A summary report detailing key findings is expected to be released soon (as of November 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 in 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 March 2024, the South Australian Government signed a Memorandum of Understanding with Zero Petroleum, a producer of synthetic fuels, to explore investment opportunities in South Australia. In November 2024, the South Australian Government signed a Letter of Intent with Zero Petroleum to support a feasibility study it is undertaking in collaboration with Adelaide Airport and Qantas Airways, aimed at assessing the viability of a low-carbon sustainable aviation fuel production facility in Whyalla.

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.

 

Reviewed: November 2024