South Australia Planning Hydrogen Export Strategy

The state of South Australia earlier this month issued a tender for professional services under the title “Hydrogen Export Study, Modelling Tool and Prospectus.” The tender is a further step in the state’s campaign to become a major exporter of renewable energy in the form of green and/or blue hydrogen. The results of the study are expected to “inform key considerations such as locations for hydrogen production and export, volume of supply potential, the interdependencies of hydrogen supply chain infrastructure, and the landed cost of clean hydrogen exported from South Australia.”

According to the tender, “the South Australian Government has identified that South Australia is well placed to develop a green hydrogen export industry using its renewable energy resources to assist in meeting anticipated future global hydrogen demand.”

South Australia currently produces more than 50% of its electricity from renewable sources. Based on Australian Energy Market Operator modelling the Australia Institute of Climate and Energy has forecast that this percentage may rise to 90% by 2025. The current development pipeline for renewable generation projects substantially exceeds domestic electricity demand requirements … South Australia is also a producer of natural gas and has locations under investigation for their carbon capture and underground storage potential, which could offer a pathway to blue hydrogen production.

Government of South Australia, Hydrogen Export Study, Modelling Tool and Prospectus, Part B- Specification, March 14, 2020

Officials believe the key to realizing the state’s potential as a renewable energy exporter is to engage with “international partners” whose involvement can “lead to the execution of investment agreements with one or more hydrogen consortia and secure investment in hydrogen supply chain infrastructure.” To this end, the tender calls for three deliverables. The first is a “pre-feasibility study” that will examine “the requirements, costs and benefits of supporting the development of large-scale clean hydrogen production in South Australia for international export.” Circulation of this deliverable will be limited to government officials, who will use it to map out the case to international stakeholders.

The second deliverable is a prospectus that will “present the key information required by international hydrogen consumers, infrastructure developers and investors in order to make further investment decisions about developing clean hydrogen export projects in South Australia.” In keeping with the orientation to Asian markets articulated throughout the tender, the prospectus will be translated into “Japanese, Korean, and Chinese.”

The third deliverable is a modeling tool that will “combine spatial mapping, technical specifications and commercial modelling to create a secure, web-based interface that allows users to determine an FOB cost per kilogram for hydrogen from a South Australian port.” Among the parameters users will be able to explore is choice of hydrogen carrier. Options will consist of liquid hydrogen, methylcyclohexane, and ammonia. While a “basic” version of the tool will be made available to the public, access to “the majority of functionalities” will be granted only “to certain parties as determined by [the lead agency] and informed by the engagement process.”

The South Australian Government has budgeted AUD $1,100,000 (USD $660,000) for the study. Responses to the tender are due no later than April 14.  The government would like to have all deliverables in hand in advance of the annual Australia Japan Business Co-operation Committee meeting which is scheduled for October 18-20, 2020. The meeting will be held in Adelaide, South Australia’s capital city.

Copies of the tender may be obtained after registering on the SA Tenders and Contracts Web site.