The federally funded Australian Renewable Energy Agency (ARENA) has chipped in $1.25 million of a $5 million feasibility study for a hydrogen energy test plant at the Stanwell power station in central Queensland.

The State Government has forecast that hydrogen could be worth about $1.7 billion in exports, primarily to South Korea and Japan. Both countries are keen to find a clean energy source and Japan will use its Olympics this year to showcase their plans.

Queensland is basing its strategy on using water, rather than coal, as the source of the hydrogen. Renewable electricity, like wind farms or solar power, will be used as the energy input.

The study at Stanwell will determine the optimal design as well as define the highest value end-use for the renewable hydrogen produced.

ARENA believes the hydrogen electrolyser at Stanwell could be used as a complementary energy market load that can ramp up in times of excess energy supply, such as peak solar output during the day.

ARENA’s Darren Miller said if feasible, the study and development of the test plant could help underpin future commercial-scale deployments and leverage existing network infrastructure at other power stations.

By using an existing power station, there are also benefits in being able to use pre-existing land approval, network connection and access to demineralised water which is required for hydrogen production.

“Through Stanwell’s feasibility study we’re showing a new option for producing and using renewable hydrogen. This will create opportunities across the domestic economy and help to position Australia to become a major renewable energy exporter,’’ he said.

ARENA has committed approximately $50 million towards hydrogen initiatives so far, including over $22 million to R&D projects, and almost $28 million to demonstration, feasibility and pilot projects.

Stanwell will procure energy and green certificates from renewable energy projects in the region to offset 100 per cent of the emissions associated with running the electrolyser.

State Development Minister Cameron Dick said Gladstone, Redlands and Townsville showed great potential for hydrogen, with significant investment already in place in those regions.

Gladstone and Townsville have already been identified by the private sector as prime locations for renewable hydrogen production and export opportunities, and the Queensland Government’s Redlands Research Facility will host the QUT-led hydrogen pilot plant.

“Queensland has the land and renewable energy capacity, existing gas pipeline infrastructure and export facilities that make us an ideal location for renewable hydrogen production.”