Hydrogen and renewables to power up jobs in SA regions

A fast economic path using hydrogen to tackle climate change will boost regional SA, especially Whyalla, the Riverland and Mid North, experts say.

A hydrogen industry will make South Australia a powerhouse in world steel production and national electricity generation, new reports forecast.

In positive signs for regions like Whyalla, the Riverland and Mid North, the irreversible global switch to cleaner, green energy plays to SA’s natural advantages.

Thousands of jobs would be created in renewable energy projects this decade under a fast economic growth scenario with hydrogen playing a key role in fighting climate change, according to an Australian Energy Market Operator report on SA.

Separately, Adelaide University-led research published on Monday positions hydrogen as a key to transforming heavy industry such as steel and cement where it is hard to reduce emissions.

“Consumer demand for green products is generating the new market premiums that are beginning to drive the investment needed to decarbonise the heavy industry sector,” Adelaide University Professor Gus Nathan said.

University of Adelaide Professor Gus Nathan.

The report from the university’s Centre for Energy Technology says so-called green steel, made using hydrogen instead of coal, was at a tipping point with a convergence between growing market demand, advanced technology and the falling price of hydrogen.

Prof Nathan stressed he was not in a position to comment on financial issues faced by Whyalla steelworks owner Sanjeev Gupta but he was confident the Eyre Peninsula town’s future would be bright.

“It has this great synergy of a high-quality iron ore resource and renewable energy, all the ingredients for a bright long-term future,” he said.

The centre’s report, HiTemp Outlook, was co-authored by researchers from universities, government and business and who were in Australia, the US, Germany and other locations.

It noted that Europe has already committed to net-zero greenhouse gas emissions by 2050 and is moving to introduce import taxes on carbon-intensive products.

“China and the UK have comparable targets and approaches,” the researchers added.

These marketplace changes would favour green steel.

Whyalla’s particular advantage would be making the hydrogen in SA using electricity generated by local wind and solar generation. This would avoid the costly process of long-distance transport of hydrogen.

Today, 99.5 per cent of Australia’s iron ore is exported unprocessed.

“Imagine the benefit of turning even a decent slice of these exports into products worth three or four times the value of the raw ore,” Prof Nathan said.

Workers inside the Whyalla steelworks.

The university report’s launch comes as the Australian Energy Market Operator publishes a forecast on SA’s electricity generation through to 2029-30.

AEMO considers three scenarios which vary by the pace of policy-driven change to decarbonisation.

For the first time, it labels the fastest pace as the “hydrogen scenario – a future with stronger economic growth that takes stronger action to address climate risks”.

In the hydrogen scenario, there would be consumer-led innovation and rapid technological progress with hydrogen replacing a fifth of the state’s natural gas use by 2040.

In its other two scenarios – “slow change” and “central” – there would be a slight decrease in the electricity generated in SA and the state would rely on imports from Victoria.

In the hydrogen scenario, generation would increase this decade from 15 terawatt hours a year to 27 terawatt hours with major wind farm projects to be built in the Mid North and South East and solar farms in the Riverland.

Because demand for electricity to produce hydrogen would be flexible – drawing power when electricity prices were low – these new generators would sell renewable energy to the eastern states when prices were high, making SA a significant electricity exporter.

“The market operator’s projections show that the faster pace of change being driven by the Marshall Government’s policies will deliver thousands of jobs in new renewable energy projects,” Energy and Mining Minister Dan van Holst Pellekaan said.

“AEMO’s report shows brisk progress towards the Marshall Government’s intention of net-100 per cent renewable energy by 2030, with the SA-NSW Interconnector allowing the share of generation to rise to over 84 per cent within a few years.

“It also shows the combined impacts of the SA-NSW Interconnector, and the acceleration of electric vehicles and hydrogen by the Electric Vehicle and Hydrogen Action Plans.

“This positions South Australia as a major exporter of clean energy, with a massive increase in renewable energy projects and associated employment.”

Energy and Mining Minister Dan Van Holst Pellekaan.

Opposition Leader Peter Malinauskas.

The State Opposition also champions hydrogen, announcing last month a $593m policy to kickstart the industry into commercial scale by government building a 250MWe electrolyser, hydrogen power station and storage.

“We need to act now if we’re going to grab the opportunity,” Opposition Leader Peter Malinauskas said.

“Otherwise, we’re going to watch other states take it off our hands, we’re going to see other parts of the world take it off of our hands.”

Meanwhile, another major energy report published on Monday by the Grattan Institute says Australia can achieve a net-zero national electricity market without threatening affordability or reliability of supply.

Moving to 70 per cent of generation from renewables supported by gas to fill in gaps – while two-thirds of coal-fired power stations retire – would not materially increase power costs.

Australia’s coal-fired power stations are due to retire, the Grattan Institute Net Zero report says.

“We can make the historic transition to a low-emissions electricity system without the lights going out and without power bills skyrocketing,” said lead author and Grattan energy program head Tony Wood.

“The scaremongers are wrong – the analysis in our report shows that Australia can achieve the trifecta of reliable, affordable, low-emissions electricity, and we can do it without coal.”

Grattan says renewables should be backed by gas until other zero-emissions alternatives – including hydrogen – become economically competitive.

The Grattan report says “those who say coal-fired power will continue to be needed are wrong” then adds that “those who say Australia should commit to a 100 per cent renewable electricity target now are also wrong”.

Rushing to 100 per cent renewables would be costly, because of the need to overbuild to ensure reliability. This would particularly be the case in the southern states in winter when solar drops off and there can be wind droughts while demand is high.

The report warns that disagreement by federal and state policy makers is leading to uncoordinated action “which is unlikely to produce the lowest-cost outcome for Australians”.

“Australlia needs clarity,” it says.