'The race is on': Which Australian state is supporting hydrogen best and how will it end?

Just which Australian state is doing the most for the hydrogen industry?

While the ASX hydrogen space has only gone from being a single company to a sector in the last four months, private energy companies such as ATCO have been there since 2017.

Earlier this month it received $28.7 million from ARENA for its Clean Energy Innovation Park Project (CEIP).

The CEIP is intended to establish Australia’s first commercial scale green hydrogen supply chain, including a 10MW electrolyser and plant capable of producing up to 4.0 tonnes of hydrogen per day, along with storage and delivery to the gas network injection points.

Which Australian state is leading the hydrogen race?

If you look at the list of hydrogen stocks on the ASX, you might think Queensland. There are more ASX hydrogen plays in Queensland than any other state.

But speaking with Stockhead last Friday, ATCO general manager Russell James thinks WA has a significant advantage.

“I point to that two of the three [ARENA-funded] hydrogen products were in WA, our project and you have Engie’s project in the north,” he said.

“I think WA has a significant advantage with export quantities, previous policies around gas reservation, government support for this – we’ve got a minister for hydrogen, the first minister, which is fantastic.”

But James noted all states are vying for the top spot.

“The race is on for which goverment can move quickly enough to support the industry.”

Hydrogen growth has parallels with LNG

Earlier this month, Stockhead spoke with Lion Energy (ASX:LIO) boss Tom Soulsby who thought there were some parallels that could be made with LNG.

He noted Australia’s LNG took 20-30 years to reach the state where it is but noted the foundations were only now being laid.

ATCO’s Russell James agreed there were some parallels with LNG but hinted hydrogen adoption could come sooner and the work being done now wasn’t all in vain.

“When you look the LNG industry, how long it took to develop, some of the things governments do – they’re kind of being done today,” he said.

“The trick is Australia has a great advantage with wind and solar resources, large land mass to actually install infrastructure to some of that infrastructure to hydrogen for an export market – but you’ve got to develop a domestic market.

“So if you look in the west, the domestic gas reservation and some of the underwriting of LNG work that was done on the early stages helped develop the industry which helped then sent market signals to the rest of the globe which got those large scale projects going and continued to bring down cost of production for those products.

“I think that’s where the market is at today. It’s about people doing projects [and] producing [the] market. The export scale needs to get into hundreds of megawatts and gigawatt scales of projects.”

James noted ATCO’s 10Mw project would be one of the biggest in Australia.

“That focuses on building scale, building, skills, expertise, building a domestic market, continuing to leveraging into relationships with potential trading countries and building up to those scale products as they’re required in 2030s and beyond,” he said.