South Australia is set to host its second hydrogen production and distribution facility, with the construction of a 1.25MW Siemens electrolyser that will produce hydrogen using electricity from the grid and potentially on-site solar.

The $11.4 million project, announced on Wednesday by the Australian Gas Infrastructure Group (AGIG), will be built at the Tonsely Innovation Disctrict in Adelaide – the industrial suburb built around the former Mitsubishi car manufacturing plant.

It is not the only example of power to gas technology being developed in Australia, or in South Australia, for that matter.

Earlier this month, the SA government announced funding for a 15MW renewable-hydrogen electrolyser plant to be built near the end of the grid at Port Lincoln on the Eyre Peninsula,

The Port Lincoln facility – to be built by Hydrogen Utility (H2U), working with Germany’s thyssenkrupp – will include a 10MW hydrogen-fired gas turbine, fuelled by local wind and solar power, and a 5MW hydrogen fuel cell. It remains to be seen which SA project will be completed first.

And in the ACT back in 2016, Neoen and Megawatt Capital announced plans invest $55 million in partnership with Siemens and Hyundai to establish a 1.25MW hydrogen electrolyser, including a a hydrogen refuelling station and service centre and an initial fleet of 20 hydrogen fuelled cars, including a technical support and research program.

The news of the SA Tonsley project coincides with a separate announcement from Carnegie Clean Energy, of its own plans to transform the former Adelaide General Motors Holden factory into a solar and battery storage microgrid, with backing from the SA government.

And of course the South Australian government had a fairly major announcement of its own on Wednesday, revealing pre-election policy plans to boost its renewable energy target to 75 per cent by 2025, and to introduce the nation’s first “energy storage target” of 750MW by the same date.

The hydrogen produced by the Tonsley-based power-to-gas demonstration plant – to be known as Hydrogen Park SA (HyP SA) – will be injected into AGIG’s local gas network. intially to power the Tonsley Innovation District – but with the ability to supply a proposed residential development in the area and other remote customers through tube and trailer facilities.

As one of the first major demonstration of the technology, the facility is also expected to play a crucial role in showing how electrolysers can be integrated into electricity networks around the country, to support energy stability as more renewable energy generation capacity comes onto the grid.

Like the newly announced microgrid at the former Holden plant, the Hydrogen Park project has been awarded grant funding from the South Australian government – in this case, $4.9 million from the $150 million Renewable Technology Fund.

“We are delighted that South Australia will lead the way with this pioneering technology,” AGIG’s Andrew Staniford said on Wednesday.

“The project is expected to be the first in Australia where renewable electricity is stored and distributed in the gas network as hydrogen, providing an additional market for fluctuating renewable electricity and thereby also improving the economics of renewable electricity.

“And importantly, it propels South Australia’s status as a leader in renewable technology and a first mover in hydrogen,” Staniford said.

Jeff Connolly, CEO and chair of Siemens Australia said his company was excited to be a part of delivering “proven and world leading hydrogen technology” to Australia.

“It’s pleasing to see hydrogen become reality since we began driving this conversation in Australia only a few short years ago,” he said from the CEDA: Economic and Political Overview in Adelaide event in Adelaide on Wednesday.

“Reticulating hydrogen into the gas network supports de-carbonisation of the state.

“It also supports the development of a domestic market for hydrogen which I believe can lead to Australia becoming a renewable energy export superpower if we harness the untapped renewable assets of the country.”

Siemens’ electrolyser technology will use proton exchange membrane (PEM), which are designed to operate in highly variable conditions such as those created by renewable energy generation.

According to Siemens, PEM Electrolysers have a very fast start-up time and can quickly absorb excess renewable energy from a power system, converting water into hydrogen and oxygen.

“These utility scale electrolysers can, with surgical precision, be energized and de-energized in less than 10 seconds, capturing excess energy from the grid when energised,” Siemens said.

Essentially, it added, they play a demand side management role within the energy system, and may be used as a tool to keep the grid in balance.

“This is about using inexpensive or free energy, which would otherwise be spilled to produce a clean form of stored energy that has many value streams – 100 per cent pure hydrogen, with the only by-product being 100 per cent pure oxygen.”

As Giles Parkinson noted earlier this month, hydrogen has often been dismissed as a viable technology because of the recent gains of electric vehicles and battery storage, but its proponents believe that it can create export industries to rival that of natural gas, and its added value chain can make it extremely valuable in the domestic market.