SA Government and GFG Alliance chief Sanjeev Gupta make case for developing hydrogen export hub

Hydrogen is a lucrative and sustainable resource for the future – now both the State Government and Sanjeev Gupta have got a case for why SA is the perfect place to develop an export hub.

Whyalla will be pivotal to South Australia’s pitch to become the home of a new $70m hydrogen export hub, with billionaire industrialist Sanjeev Gupta throwing his support behind the idea.

Key to the State Government’s bid will be its pledge that SA can deliver the project faster than any of the other states.

Mr Gupta has revealed his ambitions to eventually convert the Whyalla steelworks to hydrogen in a bid to produce carbon-neutral steel.

He told The Advertiser he would welcome co-location of a hydrogen hub at Whyalla or his newly acquired assets at Bell Bay in Tasmania.

GFG Alliance executive chairman Sanjeev Gupta plans to eventually produce carbon-neutral steel at the Whyalla steelworks. Picture: Bianca De Marchi

State Energy Minister Dan van Holst Pellekaan also weighed in strongly, saying SA could deliver the project “more quickly than any other state” and, with a deepwater port at Port Bonython, next to Whyalla, the state had a competitive advantage.

Prime Minister Scott Morrison on Thursday announced the hub as part of a $1.9bn energy package, triggering a rush of interest from industry and state governments looking to nab the lucrative project.

It’s expected to attract jobs and local and international investment while also helping the state where it is built to establish a hydrogen production and export industry. 

But SA will be competing against Darwin, the Latrobe Valley in Victoria, the Hunter Valley in NSW, Bell Bay in Tasmania, Gladstone in Queensland and Western Australia’s northwest for the right to host the hub.

The site will be selected through a competitive process, which will call for applications from local and international industry figures.

“We can deliver on that opportunity more quickly than any other state could,” Mr van Holst Pellekaan said. 

“The international market is actually for green hydrogen … it’s for hydrogen made out of renewable energy. Green hydrogen really means sun and wind or hydro electric, which, of course, is an opportunity for Tasmania as well. But to be able to take advantage of surplus electricity when it’s available, solar or wind is a far more regular opportunity than it is with hydro electricity.’’

Mr van Holst Pellekaan said SA had already proven it could build wind and solar farms “fairly quickly, very successfully with low-cost operations. Picture: Bernard Humphreys

Mr van Holst Pellekaan said SA had already proven it could build wind and solar farms “fairly quickly, very successfully with low-cost operations. And that’s a big advantage compared to if you need to step up your state’s renewable energy capacity”.

Mr Gupta said the combination of abundant iron ore and green energy provided a great opportunity for Australia.

“Australia is well-positioned to be a leader in green hydrogen production and our Whyalla steelworks transformation plan foresees this,’’ he said. “With hydrogen production established, the benefits go beyond steel and could see Australia become a global hub of green and clean industries. Whether Whyalla or Bell Bay, we would welcome the co-location of hydrogen infrastructure that supports Australia’s road map to being a global leader in hydrogen.’’

SA last year launched a strategy outlining its plan to develop a green hydrogen industry. Just this week, Business SA flagged a strong push into green hydrogen as a key opportunity to prosper in a post-COVID world. Australia’s largest hydrogen-producing electrolyser is already based at Tonsley’s innovation precinct, and a trial supplying hydrogen to 700 homes in Mitchell Park as part of its gas supply is scheduled to start this year as part of a five-year demonstration project.

The Prime Minister also announced $1.42bn for the Australian Renewable Energy Agency (ARENA) to invest over 10 years in new energy technology.

The Federal Government will seek legislative changes so ARENA and the Clean Energy Finance Corporation can support projects beyond renewables and clean energy, such as carbon capture and storage and green steel production.

The suite of changes will need to pass parliament, which means the government will need crossbench support if Labor opts not to back it.

“Wind and solar stands on its own two feet now,” Mr Morrison said. “We’re not going to throw money at things that have already been established. If there’s new technologies, we’re interested.”

Opposition energy spokesman Mark Butler said Labor backed more money for ARENA but would not support any being diverted from renewables to other projects.