A plan for a small hydrogen-fuelled power plant at Port Lincoln is getting funding from South Australia's renewable technology fund.

Key points: The project will use renewable energy and split water into hydrogen and oxygen

The project will use renewable energy and split water into hydrogen and oxygen Hydrogen can then be stored as a gas or liquid, or converted into ammonia

Hydrogen can then be stored as a gas or liquid, or converted into ammonia The project includes two new power generation facilities — a 10MW gas turbine to burn hydrogen in air and a 5MW hydrogen fuel cell

Infrastructure company Hydrogen Utility (H2U) is proposing a $117.5 million facility with a 15-megawatt electrolyser plant to convert renewable power into hydrogen and an ammonia production facility for fertiliser production.

It said there would also be a 10-megawatt hydrogen-fuelled turbine and a 5-megawatt hydrogen fuel cell, both to supply electricity to the grid, with water their only by-product.

The company is getting a $4.7 million grant and a $7.5 million loan from the state renewables fund.

Hydrogen Utility chief executive Attilio Pigneri said the project would demonstrate the possibilities from hydrogen production.

"It will provide balancing services to the national transmission grid [and] fast frequency response support to new solar plants under development on the Eyre Peninsula," he said.

He said fertiliser and chemical production would help the farming and aquaculture sectors.

Dr Pigneri also hoped hydrogen could be exported to the Asia-Pacific region.

South Korean car makers have been investing in development of hydrogen fuel cell vehicles.

By the 2020 Olympics, Japan is aiming to have 40,000 hydrogen fuel cell cars and 1.4 million hydrogen fuel cells.

The South Australian Government said it was planning to capitalise on the state's high penetration of renewable energy, and to have ports capable of exporting hydrogen either as liquid or stored as ammonia.

Energy Minister Tom Koutsantonis said domestic storage and consumption was also being planned.

"South Australia is at the global forefront of a broad range of storage technologies, from big batteries to virtual power plants to pumped hydro," he said.

"Now we will also be home to one of the largest hydrogen production facilities in the world as well."