South Australian Government Hydrogen Facility (Archived)

South Australian Government Hydrogen Facility

The South Australian Government has committed AUD$593 million in capital funding for the development of a hydrogen production, generation and storage facility in the Whyalla local government area.

Main proponents: The Office of Hydrogen Power South Australia has been established to oversee initial implementation phases. A new South Australian government business enterprise will be established to own and operate the plant once built.	Main end-use classification: Power use	Status: Under development	Estimated cost: AUD$593 million – project estimate
Other involvement:	Production details: 250 MWe electrolyser capacity	Location: South Australia, Australia	Announced funding: Project funding included in the South Australian 2022-23 budget

Project description

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, hydrogen-fuelled power generation and hydrogen storage capacity in the Whyalla region.

The project targets delivery of 250 MWe of electrolyser capacity, 200 MW of hydrogen-fuelled power generation and hydrogen storage infrastructure – the optimal amount of hydrogen storage to be used for power generation at the facility and for local industry offtake has been identified as 100 tonnes of renewable hydrogen.

The generator will enhance system security by providing South Australia with a source of dispatchable renewable energy and the electrolyser will operate as a flexible load to manage excess renewable energy in the system.

The project will use excess renewable energy from the grid for hydrogen production. All water is to come from SA Water’s existing industrial water licence allocation (a connection to the Whyalla SA Water mains network is considered the best available option).

A six-week market sounding process was conducted mid-2022 to help inform the design and delivery concepts for the construction of the hydrogen facility.

In December 2022, the South Australian Government released an international Request for Proposals which invited industry participants to help deliver the hydrogen power plant, hydrogen production and storage facilities for the project.  The call for proposals focused on the supply, construction and operation of the hydrogen power plant and equipment – including electrolysers, power generation and storage infrastructure – as well as options to purchase green hydrogen produced at the facility. The Request for Proposals closed on 14 March 2023.

In March 2023, the South Australian Government announced that a total of 29 proposals to help implement the project were received through the call for proposals, to be followed by a detailed evaluation process with a view to awarding contracts early in the second half of 2023.

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. The release notes the ECI for the project would continue into the second quarter of 2024 focussing on detailed project and engineering design, procurement of critical equipment, finalising contracting arrangements, and cost estimations. 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. The release indicates that ATCO Australia secured an order with GE Vernova for four such units with commissioning expected in early 2026.

Also in February 2024, the South Australian Government announced that it had reached agreement with GFG Alliance to explore opportunities for hydrogen offtake from the facility in supporting decarbonisation of the Whyalla steelworks.

In August 2024, it was announced that the project had received development approval, as well as announcement of the release of nine Early Civil Works packages for expressions of interest (and which closed on 9 September 2024). These work packages include works such as site establishment, clearing and grubbing, bulk earthworks, site fencing and signage, stormwater infrastructure, access roads and kerb and gutter installation.

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

Construction of the new facility is currently scheduled to begin early 2025, with the commissioning scheduled in 2026.

Note: The South Australian Government, in its announcement of 20 February 2025 where it announced a package of three distinct measures in support of the Whyalla Steelworks, indicated that the South Australian Government’s share in the ‘Investing in the Steelworks’ Future – $1.9 billion’ measure would come from funding set aside for the Hydrogen Jobs Plan [this project], which will now be deferred to prioritise securing the steelworks.

 

Reviewed: February 2025