AGL, Brickworks plan hydrogen hub in Adelaide

Angela Macdonald-SmithSenior resources writer

Jun 17, 2022 – 4.57pm

Subscribe to gift this article

Gift 5 articles to anyone you choose each month when you subscribe.

Already a subscriber?

AGL Energy has joined with local manufacturers such as Brickworks as well as major LNG buyers such as Japan’s Inpex to examine a potential green hydrogen plant in South Australia that could serve domestic and export markets with clean fuel.

The country’s biggest cement manufacturer Adbri and Japan’s Osaka Gas are also part of the consortium that will study the project, which fits with AGL’s plans to repurpose its Torrens Island power station site in Adelaide for low-carbon energy. AGL gave no potential cost of timing for the project.

The proposed hydrogen hub would be part of the transition plan for AGL’s Torrens Island power station site in Adelaide, South Australia. Daniel Kalisz

The study is one of several early-stage proposals for large-scale green hydrogen production around Australia, tapping world-class wind and solar resources. While none has reached a final investment decision, the sector is attracting major players, including British energy giant BP, which last week finalised a deal to buy a stake in the proposed $52 billion Asian Renewable Energy Hub in Western Australia.

The involvement of major Asian partners in the AGL-led project, which also includes a subsidiary of South Korean conglomerate SK Group, points to the potential for strong customer support from countries that anticipate becoming major green hydrogen importers.

Port operator Flinders Ports and renewable developer Spark Renewables are also among the eight members of the consortium that is backing the feasibility study, to be carried out by GHD Advisory.

Embattled AGL, which last month sensationally scrapped a long-planned proposal to split in two, has plans to transform its thermal electricity generation sites including Torrens Island into clean energy manufacturing hubs as part of its decarbonisation strategy.

After abandoning the demerger, AGL kicked off a review of its future strategy and is hunting for a new chief executive and chairman, with input from its biggest shareholder, tech billionaire Mike Cannon-Brookes, who is pushing for a much faster exit from coal power for the giant electricity supplier.

The news of the study shows it is in any case continuing with plans that support its push toward lower-carbon energy. Hydrogen from the potential project could be co-fired with gas at AGL’s Barker Inlet power station nearby.

“This is another big step forward in AGL’s vision for an industrial energy hub at the site of our Torrens Island Power Station and we are coming closer to repurpose the site,” said AGL chief operating officer Markus Brokhof.

Work to transform the site includes the commitment last year to installing a 250-megawatt battery, as well as decommissioning old oil tanks and cranes.

Mr Brokhof said South Australia was emerging as a leader in the development of a hydrogen industry, led by a major investment in the sector by the state government.

South Australian Premier Peter Malinauskas controversially pushed ahead with a $593 million hydrogen project in Whyalla just after winning the state election in March.

The study, to be completed by the year-end, will examine operational and commercial plans for a project that would use renewable energy to provide green hydrogen for use in power generation, gas networks and low-carbon chemicals and fuels.

Angela Macdonald-Smith writes on the resources industry with a focus on energy, including gas, oil, electricity and renewables. Connect with Angela on Twitter. Email Angela at amacdonald-smith@afr.com