South Australia backs $250m green hydrogen project to kick start exports

The South Australian government has backed a massive $250 million project to kick-start Australian green hydrogen exports, with Australia’s largest electrolyser project set to supply new green ammonia production.

The first ‘demonstrator’ stage of the H2U Eyre Peninsula Gateway Hydrogen Project will see the construction of a 75MW electrolyser plant in Whyalla, set to be Australia’s largest green electrolyser built to date, which will supply hydrogen for the production of an estimated 40,000 tonnes ammonia annually, and will target export markets.

The company said the 75MW electrolyser would be part of the first stage of the company’s planned investments, and the project will be later expanded to boost output by as much as 20-fold, with the aim of further boosting the supply of green ammonia into the Asian region.

The project has been supported by a $4.7 million grant and a $7.5 million loan from the South Australian government, under its Renewable Technology Fund. The project had originally been slated for construction near Port Lincoln, but the project opted to shift the project closer to Whyalla, to be closer to a key industrial and export hub.

South Australian energy minister Dan van Holst Pellekaan said the project would be able to take advantage of South Australia’s growing supplies of renewable electricity, which will ensure the facility will be able to produce emissions free hydrogen.

“Our intention of net-100% renewable energy generation by 2030 will produce some of the most cost-effective green hydrogen in the world,” van Holst Pellekaan said.

The plan was launched by South Australian premier Steven Marshall on Thursday, who said it would unlock export opportunities for the state in new green industries.

“South Australia’s ambition to create, use and export green hydrogen is getting global attention, and has great potential to create jobs and sustain long-term investment,” Marshall said.

“Maintaining this critical piece of infrastructure will unlock further export opportunities in key markets, particularly across Asia, boosting economic activity and creating jobs in our state.”

The South Australian government has also allocated $37 million to upgrade the Port Bonython jetty, just north of Whyalla to ensure the port has the necessary facilities to support the export of ammonia from South Australia.

Marshall said that the South Australian government had been working with the project developers to help line up potential international customers for the ammonia produced by the plant.

“My Government has also been working to assist Australian company H2U to establish connections with potential international customers, and their hydrogen project at Port Bonython is a very exciting one for South Australia,” Marshall added.

“The $240 million demonstrator phase of the project is of global significance, but it is just the precursor to a much larger production and export facility, that could see us also strengthen our energy ties with traditional trading partners. This comes at the perfect time, as we lead our economic recovery from the global coronavirus pandemic.”

H2U project executive director, Tristram Travers, said the development of the project would help to kick start global demand for green hydrogen projects, providing early supplies into an emerging Asian market.

“The Eyre Peninsula Gateway project, will be the first, export-oriented green hydrogen and ammonia manufacturing facility utilising 100% renewable energy and a significant step towards meeting the needs of these emerging markets,”  Travers said.

“The significance of the emerging markets for green ammonia in the power generation and shipping sectors can’t be overstated, as each of these is projected to grow to several multiples of the global ammonia trade today.

“As we bring one of the first projects globally to harness 100% renewable energy from solar and wind for the production of green ammonia, we look forward to contributing the knowledge from the Project to support development of global certification standards to support this new trade.”

Ammonia has been identified as a key early industry for green hydrogen production in Australia, as it can provide an early source of demand while the international market for hydrogen for use in energy storage and transport continues to develop. The vast bulk of hydrogen produced globally is used in chemical production like ammonia for fertilisers.