South Australia to award renewable hydrogen contracts in second-half 2023

South Australia has received 29 proposals for its renewable hydrogen projects and following evaluations, will be ready to award contracts in the second half of 2023, the Commonwealth Scientific and Industrial Research Organisation said April 7.

The South Australian government has committed A$593 million ($396 million) for the development of a hydrogen production, generation and storage facility in Whyalla.

"The project targets delivery of 250 MW of electrolyzer capacity, 200 MW of hydrogen-fueled power generation and hydrogen storage infrastructure," CSIRO, the government's scientific body, said.

"The generator will enhance system security by providing South Australia with a source of dispatchable renewable energy and the electrolyzer will operate as a flexible load to manage excess renewable energy in the system."

A six-week market sounding process was conducted mid-2022 to help inform the design and delivery concepts for constructing the hydrogen facility, CSIRO said.

The government released in December 2022 an international request for proposal inviting industry participants to help deliver the hydrogen power plant, hydrogen production and storage facilities. 

The RFPs, which included options to purchase renewable hydrogen produced at the facility, closed March 14.

The hydrogen facility is expected to be operational by the end of 2025, according to CSIRO.

The Office of Hydrogen Power South Australia has been established to oversee the initial implementation phases, CSIRO said. A new South Australian government business enterprise would be established to own and operate the plant once built.

Whyalla hub

The identified sites are located within a 15 km (9.3 mile) radius of the city of Whyalla, close to critical infrastructure, transport nodes and existing and planned economic development, South Australia had said earlier.

An adjacent site at the Cultana Industrial Estate provides opportunity for power generation and other infrastructure for the project.

South Australia, which generated 69% of its energy from renewable resources in 2022, offers the scope of excess renewable power being available for the production and export of hydrogen, the state's officials have said at various forums.

South Australia had said Feb. 15 it plans to export renewable hydrogen to Indonesia by end-2023 from a demonstration plant in Bolivar, a different site within the state.

Platts assessed South Australia hydrogen produced via PEM electrolysis at $4.76/kg April 5, rising significantly from 27 cents/kg assessed a month earlier, S&P Global Commodity Insights data showed.

Platts assessed Japan hydrogen produced via alkaline electrolysis at $4.25/kg April 6, up 8.97% month on month, according to S&P Global data.