South Australia plans world's largest electrolyzer and H2 power plant
The state that built the world's first grid-level "big battery" is striking out on an even more ambitious green energy project: the world's biggest hydrogen power station, fed by an electrolysis facility 10 times larger than anything running today.
South Australia has made impressive strides in decarbonization, on the back of its huge solar and wind potential – to the point where nearly 70% of all its electricity is renewably generated. It's expected to cross the 100% threshold well before the scheduled date of 2030, and back in 2021, this state, with its population of 1.7 million people, met 100% of its operational demand from renewables alone on 180 days of the year.
Indeed, it's also been among the first places in the world to face the issue of over-generation, when a storm late last year brought down a long-distance power line used to export excess renewable energy to the neighboring state of Victoria. The Australian Energy Market Operator had to scramble to switch off a lot of the state's remote-controllable solar resources, and even ask consumers to switch on as many high-powered electrical devices as they could, just to keep energy levels in the grid under control.
By working with Tesla and Neoen to build the world's first grid-level big battery plant back in 2017, the state established itself as a world leader in grid-level energy storage as well as renewable generation, and it's approved several other large-scale energy storage projects in the form of bigger batteries and pumped hydro projects on the back of the first battery facility's success.
But its new project takes an even bigger leap into the unknown, with a far less obvious financial payoff. In the absence of businesses willing to take the lead, the South Australian State Government is set to fully bankroll an AU$600 million (US$415 million) hydrogen power plant near Whyalla, hoping to have it up and running by 2025.
This plant will absorb excess renewable energy from the grid, and run it through an enormous 250-MW electrolysis facility – 10 times larger than any operational electrolysis facility in the world today – producing large amounts of hydrogen, which will be stored on-site. Then, when renewable energy drops off in the evenings, or through the winter, it'll run that hydrogen back through a 200-MW generator facility and put energy back in the grid – either by burning it to drive steam turbines, or by converting it back to electricity through a huge fuel cell stack.
As a pure short-term energy storage and dispatch technology, though, hydrogen frankly sucks in comparison to batteries. The round-trip efficiency is less than 50%, compared to high-90s for lithium batteries, so you're effectively throwing half your precious renewable energy away doing things this way. It's also a pain to store, unless you take an extra step to convert it into ammonia or some other more easily managed solid or liquid. It's unlikely to come close to competing with big batteries on a Levelized Cost of Storage (LCoS) basis, which is largely why nobody else is moving forward on a similar project.
So why throw this kind of money at something that looks like such a drain on state financial, energy and water resources? Well, depending on how much storage is built, it could be useful over a longer timeframe than batteries, as a key backup to a fully renewable grid in times of extended energy drought.
But it seems the state government also sees this project as a way to kickstart a broader hydrogen scene in the area, with the ability to supply excess hydrogen to a range of other companies looking to use it in transport, green steel, domestic gas supply, manufacturing or export projects. With such short timelines – proposals are due next month, so the plant is expected to go from greenlight to operational in about two years – the government is setting a challenge that could ramp up a broad hydrogen-based supply chain, and for better or worse, it'll prove the benefits and drawbacks of hydrogen as a grid-level storage solution.