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SA's hydrogen ambitions dealt a blow

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South Australia’s race to become the nation’s number one state for hydrogen production and export just got a lot tougher.

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The federal Labor Party has chosen Queensland as the state it wants to see the centre for a new hydrogen strategy worth $1 billion.

The federal shadow energy minister, Mark Butler, said in a statement released this week: “While benefiting the nation as whole, regional Queensland will be the big winner from Labor’s plan.”

Labor’s National Hydrogen Plan will include $3 million to establish a National Hydrogen Innovation Hub in Gladstone, in Queensland.

The announcement, clearly aimed at boosting Labor’s election chances in Queensland and Northern NSW, comes at a time when South Australia is working hard to lead the nation on hydrogen.

The South Australian Government has already invested more than $17 million in four hydrogen projects: a “Hydrogen Super Hub” at Crystal Brook in the mid North; the Hydrogen Utility at Port Lincoln, on the Eyre Peninsula; a hydrogen demonstration and training project at the University of South Australia, and Hydrogen Park in Adelaide which is building Australia’s largest electrolyser to produce hydrogen for feeding into the gas network.

Detailed designs for the $7.7 million hydrogen demonstration project at the University of South Australia’s Mawson campus have been completed, and construction is about to go out to tender.  It is expected to be fully operational before the end of the year.

The project’s coordinator, Dr Stephen Berry, says “SA is at the forefront of the hydrogen economy”.

“I can understand the political announcement in Queensland, where there are lots of marginal seats,” he said. ” There is also great infrastructure there already for the gas industry…

”South Australia is extremely well placed to take a large share in the hydrogen economy, but it will need continued investment from state and federal sources.”

Ben Wilson, CEO of the pipeline company AGIG, which runs Hydrogen Park, welcomed the federal announcement.

AGIG intends to use its hydrogen to blend with the methane it supplies to domestic users.  He said the Labor announcement was more focused on boosting hydrogen exports.

Exporting hydrogen, however,  is one of the key aims of the Port Lincoln proposal, and it is understood that discussions are already underway about the possibility of using the proposed iron ore/grain deep water export port planned for Cape Hardy, just north of Tumby Bay.

Planning and feasibility studies are still underway for the Hydrogen Utility on the outskirts of Port Lincoln. The aim is to produce hydrogen cheaply by using surplus electricity from a nearby wind farm. The gas would then be used as power storage, generating electricity when the wind was insufficient.  Surplus hydrogen would also be used to make ammonia, the feedstock for fertiliser, or for export to Japan and other hydrogen-hungry countries.

“The minister ( for energy, Dan van Holst Pellekaan) is dead keen to get something up and running,” according to Peter Scott, Economic Development Manager with Regional Development Australia in Whyalla.

Scott, who has been actively facilitating the Port Lincoln proposal at both state and local level, says the State Government “is doing a huge amount behind the scenes”.

The proposed $600 million Hydrogen Super Hub at Crystal Brook is part of French energy giant Neoen’s plans for the world’s largest co-located wind, solar, battery and hydrogen facility. It would include 110MW of wind generation, 100MW of solar, 100MW lithium-ion battery, and produce up to 50MW or 9000 tonnes of hydrogen a year.

A feasibility study is expected to be completed and a final investment decision made before the end of the year.

It is not yet decided whether the hydrogen part of this will be at Crystal Brook or Port Pirie. Designs for the rest of the super hub near Crystal Brook are already well advanced through the state planning approvals process.

van Holst Pellekaan told InDaily that Butler – the member for Port Adelaide – appeared to have “forgotten” his home state in this week’s announcement.

“The State Government is supporting Australia’s first renewable-hydrogen electrolyser plant at Port Lincoln, with a $4.7 million grant and a $7.5 million loan from the Renewable Technology Fund,” he said in a statement.

“South Australia is well regarded as a national leader in this emerging industry, which has considerable capacity to grow the economy, create jobs and deliver tangible environmental benefits by improving supply of clean power to the grid.

“Sadly, Labor’s Mark Butler seems to have forgotten his home state in a blind rush to spruik Queensland as the major focus of his party’s hydrogen plan, before taking to social media to talk up the so-called benefits to Western Australia.”

However, Butler insisted the plan would be good for South Australia’s hydrogen ambitions.

“South Australia’s position as a renewable energy powerhouse puts it in prime position for the production of clean hydrogen, and Labor’s plan will help transform this potential into real projects, businesses and jobs,” he said in a statement.

“Under the vision of Jay Weatherill, the last state Labor Government developed a Hydrogen roadmap for SA – an effort that hasn’t been built on by the current SA government.”

The Labor State Government produced the “roadmap” in 2017, which then minister Tom Koutsantonis said was ultimately designed to attract international investment in hydrogen production in South Australia, including creating an export industry to serve growing hydrogen economies in Japan, Korea and China, and making the state a “test bed” for hydrogen technology.

A version of this article was first published by The Adelaide Independent Reporter.

Correction: A previous version of this story erroneously said the Queensland hub would be valued at $300 million. InDaily apologises for the error.

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