A $117-million hydrogen plant to be built near Port Lincoln will open the door for further investment in hydrogen technology on the Eyre Peninsula.
Company Hydrogen Utility (H2U) has been given a $4.7-million grant and $7.5-million loan from the state government’s Renewable Technology Fund to help get the $117.5-million project up and running with German-based electrolysis and ammonia specialist Thyssenkrupp.
The facility – which will create 30 construction and 30 ongoing jobs – will use energy from wind and solar resources to create hydrogen through electrolysis, which splits water into oxygen and hydrogen, the latter of which can be used to generate electricity via fuel cells or turbines.
The hydrogen produced on Eyre Peninsula will be used to power a 10-megawatt hydrogen-fired gas turbine and 5-megawatt hydrogen fuel cell, which will both supply power to the grid.
The plant will also produce ammonia that can be sold to agricultural industries as fertiliser.
Energy Security for South Australia Working Party member and retired electrical engineer Steve Sawyer said the announcement was the first step toward a “very huge industry”.
He said the 15-megawatt hydrogen facility represented about 0.1 per cent of the region’s potential.
“There is easily 8000 megawatts of generation on the Eyre Peninsula, the potential is huge,” Mr Sawyer said.
He said the investment by Hydrogen Utility would demonstrate what was possible with proven hydrogen technology but was on too small a scale to reduce power prices or provide reliable power supply.
Mr Sawyer said the announcement would open the door to larger scale investment on the Eyre Peninsula.
“We need to scale it up and that’s where the transmission upgrade links in,” he said.
“That’s why we’re tentatively saying ElectraNet needs to put a hold on making a decision about its transmission upgrade for the Eyre Peninsula.”
He said the current system was adequate for the 15MW proposal but to expand, a transmission line upgrade was needed.
Working party facilitator Ross Kassebaum said the Eyre Peninsula could become a renewable energy zone and a major producer and exporter of hydrogen, with the right transmission line upgrade, like the working party’s 500kV triangulated transmission plan.
Mr Sawyer said while the working party’s proposal would add about $12 a year to all South Australian residents’ power bills, it would decrease the wholesale price of electricity dramatically.
“We welcome what’s been announced, it’s a step in the right direction,” he said.