WA proposes renewable hydrogen target for main electricity grid

Western Australia has flagged it is looking at a renewable hydrogen target for its main grid, in a move to encourage that the gas generators that account for more than one quarter of its generation to go at least partially green.

It will be the first such target in Australia, possibly the world, and the government says it expects design work to be completed by the end of this year, and will draw on aspects of the federal government’s renewable energy target.

The target would require a percentage of electricity in the South West Interconnected System to be fuelled by renewable hydrogen. There is currently no indication of what that target would be, but most gas generators can accommodate 10 or 20 per cent. But not all.

“Western Australia’s world-class renewable energy resources provide a considerable advantage in the production of renewable hydrogen,” energy minister Bill Johnston said in a statement.

“A Renewable Hydrogen Target may also prepare Western Australia to transition from natural gas electricity turbines to hydrogen turbines to stabilise our electricity grid.”

New gas fired power stations on the east coast, such as EnergyAustralia’s Tallawarra B and Snowy Hydro’s government funded Kurri Kurri are expected to use a blend of gas and green hydrogen.

More controversially, the newly elected South Australia Labor government is proposing a $590 million hydrogen power plant near Whyalla, with critics saying that is not necessarily the most efficient way of using renewable sources.

Hydrogen Industry Minister Alannah MacTiernan said renewable hydrogen offers an “incredible opportunity” to reduce emissions while supporting local jobs and delivering long-term benefits.

“A Renewable Hydrogen Target for generators on the South West Interconnected System will help stimulate local demand and support emerging renewable hydrogen production projects,” she said in the joint statement.

She noted that the McGowan government has committed $160 million to support the development of the renewable hydrogen industry in WA to date. It has ambitions of creating up to 100GW of renewable hydrogen capacity by 2030, mostly for industrial and export purposes.

There are multiple renewable hydrogen projects of multi-gigawatt scale proposed in Western Australia, up to and including the 50GW Western Energy Hub and the 26GW Asian Renewable Energy Hub, but these are off grid projects targeting mostly export markets.

The proposal was cautiously welcomed by some of the major independent players in the market, with Alinta Energy’s head of merchant energy Ken Woolley saying it would be a good thing if it encouraged more renewables to be installed on the main grid.

WA has a relatively small amount of renewables capacity, limited by network capacity, the dominance of incumbent coal and gas generators, and the surge in rooftop solar, and complicated by the fact that it is an isolated grid.

“You would certainly want the hydrogen to be used efficiently and not displace or divert renewable energy that should be directly powering homes and businesses – or increase the costs for those homes and businesses,” Wooley said in an emailed statement.

“And it’s probably another vote in favour of the WA Government expanding the transmission capacity to the north – which is home to some of Australia’s best wind.”