The South Australian government has introduced a new Hydrogen and Renewable Energy Act that aims to overhaul the approvals process for green and blue hydrogen projects.

The state sees significant potential for hydrogen exports to Northeast Asia and has made simplifying investment in hydrogen infrastructure a key pillar of its hydrogen action plan.

“We have a fundamental competitive advantage in that we have a combination of solar and wind resources that allows us to produce green hydrogen in a cost competitive way,” says Richard Day, director of industry development at the South Australian government’s Office of Hydrogen Power, speaking on a webcast organised by the office.

A$2bn – Amount allocated to hydrogen projects

“Whilst the fundamental competitive advantage is there, we need the fit-for-purpose regulatory framework to allow us to responsibly unlock resources.”

The act—on which the state government is consulting—will overhaul the planning and approval process in four key areas: renewable energy licences, renewable energy infrastructure licences, research and demonstration licences, and hydrogen generation licences. It aims to achieve an orderly transition to gigawatt-scale renewables on crown land over the next ten years.

A hydrogen generation licence will grant the right to store hydrogen on the surface and to process it into any form necessary, including derivatives.

Permitting and approvals are frequently highlighted by hydrogen project developers as a key barrier to the development of projects.

Specific measures

The act will streamline the approvals process in a number of ways. It will aim to pre-identify government-owned land or seabed areas where projects can be located. Aboriginal people’s rights and interests will be considered at this early stage in the regulatory process and all licences and activities where there is a determination of native title or a registered native title claim will require an indigenous land-use agreement.

“The current frameworks do not maximise benefits for aboriginal people or South Australia at the moment and we are really keen to deliver a framework that will deliver ESG outcomes,” says Alisha Green, manager of strategic policy at the South Australian government’s Department for Energy and Mining, speaking on the same webcast.

The act will provide clear guidance on compensation and formal dispute resolution processes for landowners.

Once they have a land licence granted, project applicants will deal with one industry body for the whole approval process, including scoping reports and environmental permits, public consultations, operations and decommissioning.

This ‘one window to government’ approach aims to simplify processes for firms and prevents them from having to deal with multiple different departments at once.

The Hydrogen and Renewable Energy Act will introduce amendments to existing legislation to facilitate this approach—including the Gas Act, the Infrastructure Act, the Harbours and Navigations Act, and the Electricity Act.

But the new act will not cover the storage, piping or maritime transport of hydrogen, which are already legislated for by the Petroleum and Geothermal Energy Act 2000.

Growing industry

South Australia’s hydrogen strategy is largely export-focused. The state has opened trade and investment offices in China, Northeast Asia, Southeast Asia, the Middle East, and the US to increase its overseas presence and find offtakers.

The region has a number of hydrogen projects moving forward, although no commercial-scale projects have yet taken FID.

Marubeni’s A$12.5mn ($8.3mn) pilot project in Bolivar to the north of Adelaide, part-funded by Japanese government, will begin operations this August.

And renewables developer Amp Energy has signed an agreement with mining firm Iron Road to develop a 5GW green hydrogen and ammonia project at the Cape Hardy port and Central Eyre Iron Project industrial hub.

The state government has committed A$593mn towards a 250MW electrolyser project near Whyalla, to be built by the end of 2025, as part of its Hydrogen Jobs Plan as well as a A$4.9mn grant toward an Australia Gas Networks demonstrator project.

Australia recently allocated A$2bn to its ‘Hydrogen Headstart’ programme of renewable hydrogen incentives in its federal budget.

The scheme is expected to support 2–3 large scale projects with up to 1GW of combined capacity.

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Author: Tom Young