On Thursday 25 February 2021, the Victorian Government released its Renewable Hydrogen Industry Development Plan (Plan). The Plan sets out the blueprint for how the State Government will support an emerging Victorian renewable hydrogen industry, connect the economy to renewable hydrogen opportunities and drive the clean energy transition.
- Renewable hydrogen is a rapidly advancing technology with huge projected future market demand, both domestically and as an export product.
- To establish and accelerate the development of the renewable hydrogen sector in Victoria, the Plan maps out a path forward across 3 focus areas:
- creating clear foundations and direction for the sector;
- leveraging Victoria’s natural advantages to scale and link the sector to the State’s economy; and
- setting appropriate Government policies and support programs to ensure Victoria leads the way in attracting investment in renewable hydrogen projects.
What is renewable hydrogen?
Renewable or ‘green’ hydrogen is most commonly produced by a process called electrolysis, where electricity is used to split water into hydrogen and oxygen molecules. When renewable energy is used for electrolysis, the hydrogen produced is known as renewable hydrogen.
As a zero greenhouse gas emitting and multipurpose energy carrier, renewable hydrogen can be used as an alternative fuel source across a wide range of sectors from industrial applications to transport, as well as in households and businesses.
Interest in renewable hydrogen as an export commodity has also rapidly increased, with countries like Japan and South Korea demonstrating substantial appetite for large-scale imports.
Key features of the Plan
For those interested in entering the green hydrogen sector in Victoria, key features of the Plan include:
- A demonstration of the Victorian Government’s long term commitment to the sector, as the Plan sets out a number of considered action plans to grow opportunities at various stages of the hydrogen value chain, including production, distribution, use and export.
- Two major grants programs expected to open in mid-2021 as part of a broader $10m funding allocation to accelerate the development of the hydrogen sector, being:
- $6.2m for the Expanded Victorian Hydrogen Program to enable renewable hydrogen pilots, trials and demonstrations; and
- $1m for the Hydrogen for Industrial Users Program to support businesses to take the first steps to switch to using renewable hydrogen through business cases and feasibility studies.
- A push to drive investment primarily through the development of hydrogen hubs, particularly around the State’s Murray River, Western, South West, Central North, Ovens Murray and Gippsland renewable energy zones (REZs).
What are the targeted outcomes of the Plan?
The Victorian Government has identified 18 desired outcomes across 3 focus areas, each of which has been designed to indicate where the State needs to be in order to build a successful renewable hydrogen economy. These are summarised in the table below.
|No.||Desired outcome||Activities being undertaken to reach outcome|
|Setting the foundation for renewable hydrogen
How Victoria can lay foundations and activate early enablers for a renewable hydrogen economy.
|1.||Accelerate innovation through research and development.||
|2.||Create clear and fit for purpose safety standards and regulations.||
|3.||Ensure workforce skills and capabilities can pivot to an emerging hydrogen industry.||
|4.||Position Victoria as a leader in the hydrogen higher education space.||
|5.||Keep State-wide planning for hydrogen clear and consistent in order to optimise land use and infrastructure developments.||
|6.||Ensure water is used sustainably in renewable hydrogen production.||
|Connecting the economy
Connect Victoria’s advantages by building scale and linking emerging hydrogen hubs and clusters to converge into a coordinated industry.
|7.||Allow gas networks to have a pathway to renewable hydrogen.||
|8.||Enable the export of renewable hydrogen.||
|9.||Advance the integration of renewably hydrogen with the transport sector.||
|10.||Use hydrogen to support a secure, reliable and resilient electricity system.||
|11.||Prime the industrial sector for renewable hydrogen.||
|12.||Capitalise on Victoria’s advanced manufacturing capabilities.||
|Leading the way
Support the development of the industry, from direct investment to supporting community awareness, aiming to position Victoria as a domestic and global renewable hydrogen leader.
|13.||Enable pilots, projects and demonstrations.||
|14.||Ensure the community understands and trusts hydrogen.||
|15.||Use the Victorian Government’s purchasing power to strengthen the sector.||
|16.||Victorian Government to play a central role in coordinating across government and industry.||
|17.||See Victoria become a renewable hydrogen leader as part of Australia’s hydrogen powerhouse ambitions.||
|18.||Promote Victoria globally as an attractive trade and investment destination.||
By Alison Dodd (Partner), Nick Baker (Partner), Heidi Asten (Partner) and Frank Li (Solicitor).