Speaking this morning at the Australian Hydrogen Conference in Adelaide, where more than 700 global energy leaders have converged, Premier Peter Malinauskas said the market sounding process will be open from today until July 15.

He said the government had forecast that its hydrogen power plant would deliver an 8 per cent reduction in the wholesale price of electricity in South Australia.

It would do this by using “net negative demand electricity” during the day when the market is flooded with surplus renewable energy to produce hydrogen. The hydrogen would then be stored and later used to generate electricity when the price increased and renewables were not available.

The project, which was a major Labor pre-election promise, is set to include a 250MWe hydrogen electrolyser, a 200MW combined cycle gas turbine generator principally fuelled by hydrogen and a 3600-tonne hydrogen storage facility that will equate to one of the world’s biggest hydrogen power plants.

“The principal objective of the hydrogen generator is to provide a firming ability to other renewable generators in South Australia so they can compete on the wholesale market for the large industrial contracts for electricity,” the Premier told the Adelaide Convention Centre conference.

“It is a bold and ambitious policy, it is an expensive policy, it is South Australian taxpayers through their government taking on a degree of risk but we do that purposefully and knowingly because we believe that government leadership has a role to play to be able to encourage a partnership with private capital industry to see this industry take off.”

Premier Peter Malinauskas addresses the Australian Hydrogen Conference 2022 in Adelaide. Photo: Courtesy Department for Energy and Mining.

Malinauskas also this morning pledged his government’s commitment to the Port Bonython Hydrogen Hub, previously announced by the Marshall and Morrison governments. It is the government’s first statement of support for the hub since being elected.

The government will also develop new dedicated hydrogen legislation to license and regulate the production of hydrogen in South Australia.

The new Act will provide a single window into government for licensing and regulating hydrogen generation projects, similar to what has been afforded to the oil, gas and geothermal industries in South Australia through the Petroleum and Geothermal Energy Act 2000.

The scope of the new Act will cover the manufacturing of all forms of hydrogen, including green hydrogen manufactured from renewable energy, and blue hydrogen manufactured from methane in conjunction with carbon capture and storage to permanently sequester the associated carbon dioxide emissions.

While its Hydrogen Jobs Plan was announced in March 2021, Labor only announced Whyalla as the preferred location in March this year, just a few weeks out from the state election.

It said it would form an expert panel to report back within 90 days of the March 18 election to identify the most appropriate parcel of land either owned by the crown or Whyalla Council in the area of Whyalla and Port Bonython.

The exact location of the plant is yet to be revealed but it is likely to be near Port Bonython.

Located 16 km from Whyalla in the Upper Spencer Gulf, Port Bonython has an existing deep-water liquid hydrocarbon export terminal, 1700 hectares of developable land, and a 2.4km jetty, which is undergoing a $37 million upgrade.

The Port Bonython Hydrogen Hub has received $70 million in federal funding, $30 million from the state government and is expected to generate a further $40 million in private investment.

The state government last year short-listed seven potential projects at the hub involving the companies Santos, Fortescue Future Industries, Origin Energy, H2U, Neoen, Chiyoda, ENEOS Australia, Mitsubishi Australia, and AMP Energy.

Malinauskas said Port Bonython had the potential to generate more than 1.5 million tonnes of hydrogen by 2030.

“At Port Bonython we have a perfectly positioned opportunity to draw on the ample wind and solar resources in the region to create emissions-free green energy to power hydrogen production,” he said.

“It is the perfect location to launch our green power revolution … a thriving hydrogen industry will contribute much to the region, the state and of course the planet.”

As of early 2022, South Australia’s renewable energy sector has attracted more than $7 billion in investment, with a further $20 billion of publicly announced large scale wind, solar and storage projects in the development pipeline. This additional investment would deliver up to 14 gigawatts

The two-day conference ends tomorrow and will include addresses from major energy companies, an international delegation from Germany and the “father of the Australian hydrogen movement” and former chief scientist Dr Alan Finkel.