‘Optimistic’: Expert on savings from the state government’s $593m hydrogen plant

Household energy savings have been described by an expert as “optimistic” following the latest update on the government’s almost $600m hydrogen project.

An energy expert has cast doubt on household electricity savings following the construction of the state government’s $593m hydrogen project at Whyalla.

On Sunday, the state government unveiled plans for the world’s biggest hydrogen production facility, which premier Peter Malinauskas said would generate over 700 jobs during the course of its development.

Based on analysis conducted when Labor was in opposition, it would allow for eight per cent savings on the wholesale price of energy in the state.

The world's biggest hydrogen production facility, power plant and storage planned for Whyalla.

But Grattan Institute director of energy and climate change Tony Wood said household energy savings would be “optimistic” and come at a cost.

“It seems very optimistic to me and I hope they’re right,” Mr Wood said.

“If the government is going to write off $600m … the cost of electricity would be lower.

“(But) you can’t claim you’re getting a real reduction in electricity prices if you haven’t costed in the $600m worth of investment.”

Mr Wood said that taxpayer funds were used on “an experiment”.

But Mr Malinauskas said he expects the project would have a “positive impact on the market”.

The world's biggest hydrogen production facility, power plant and storage planned for Whyalla

And the project is not “just about the impact” on the electricity market.

“It’s about the establishment of a hydrogen industry in our state which has so much potential to grow,” he said.

“There’s so much opportunity in and around this area as the world races to decarbonise and we know hydrogen will be a fuel of the future to help achieve that.”

Opposition leader David Speirs slammed the project as he said benefits to taxpayers lack clarity.

“There is absolutely no clarity when it comes to what it will deliver for South Australian taxpayers,” Mr Speirs said.

“I fear South Australians have been sold a $600m white elephant, that won’t lower bills and won’t help keep the lights on.”

The hydrogen production facility is set to open in early 2026.