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South Australia's transition to a cleaner energy future has today taken another major step forward with the official start of construction at Australian Gas Networks' (AGN) pioneering hydrogen production facility at the Tonsley Innovation District, south of Adelaide.

AGN's Chief Executive Officer, Mr Ben Wilson, joined South Australian Premier, the Hon Steven Marshall, and the Minister for Energy and Mining, the Hon Dan van Holst Pellekaan, today for a ground-breaking ceremony at the Hydrogen Park SA (HyP SA) site to formally mark the construction start-up.

Adelaide-based AGN - part of Australian Gas Infrastructure Group (AGIG) – expects the $11.4 million HyP SA facility to start renewable hydrogen production around mid-2020.

Today's production go-ahead follows the SA Government's approval last month of the Development Application for AGN to construct and operate the Company's innovative HyP SA facility.

"This is a significant milestone in South Australia and for hydrogen in Australia," Mr Wilson said today.

"At HyP SA we will be building a 1.25MW electrolyser as the first Australian demonstration project of its scale and size, with small quantities of renewable hydrogen produced and blended into the local gas distribution network next year," Mr Wilson said.

"This will enable residents in parts of the Adelaide suburb of Mitchell Park, to become SA’s first natural gas customers to receive a blended 5% renewable gas – a combination of natural gas and renewable hydrogen," he said.

AGN received a A$4.9 million grant from the South Australian Government’s Renewable Technology Fund to build and operate the project. Using a 1.25 MW proton exchange membrane (PEM) electrolyser, renewable electricity will be used to split water into oxygen and hydrogen gas.[1]

The renewable hydrogen will then be blended with natural gas and supplied to 710 customers in southern areas of Mitchell Park via the existing natural gas network.

Mr Wilson said AGN's HyP SA project represents the first step towards decarbonising South Australia’s gas networks.

"The decarbonisation challenge is huge and many solutions are needed for Australia to meet its emission reduction targets, and that includes gas stepping up to play its part," he said.

"Developing the hydrogen economy will also play a key role and the momentum around hydrogen is building with burgeoning research and development underway.

"Commercial hydrogen production is achievable and can decarbonise Australia's energy mix while at the same time accessing export markets."

"When burnt, hydrogen does not release any carbon emissions, only water and heat so it is essentially just another gas we can use in place of, or blended with, natural gas to provide energy and heat. Customers receiving the blended 5% renewable gas will not notice any difference in their gas supply," he said.

"There is no additional cost to customers receiving the blended 5% renewable gas and the change will not impact any arrangements these customers have with their existing natural gas retailer."

Whilst natural gas is already a low-carbon option for homes and businesses, the blending of renewable hydrogen provides an opportunity to reduce carbon emissions even further.

The new blended 5% renewable gas is not the first time hydrogen has been used in Adelaide homes. Before natural gas pipelines were laid in the 1960s, Adelaide properties ran on ‘town gas’ which was manufactured from coal and typically comprised 50-60% hydrogen.

Hydrogen is already in use in parts of Europe as a blended residential gas for cooking, hot water and heating, varying between 10% and 20% of total gas content.

This project is a first step in AGN's vision to deliver 100% renewable gas. AGN is actively pursuing additional hydrogen projects with a view to blending more hydrogen into its South Australian and other Australian networks. We will also explore other opportunities for the green hydrogen including use for industrial customers and transport.

For information on HyP SA:

For information on the blended gas project:

About AGIG
Australian Gas Infrastructure Group (AGIG) owns and operates one of Australia’s largest gas infrastructure businesses with operations across every mainland state and the Northern Territory supplying approximately 2 million customers. Operations include 40,000km of distribution and transmission gas pipelines, 57 petajoules of gas storage capacity, gas processing facilities and remote power generation.

AGIG’s vision is to be the leading gas infrastructure business in Australia - by delivering for customers, being a good employer, and being sustainably cost efficient.

AGIG has a strong record of performance, delivering over $2 billion worth of projects on time, on budget and with safety a priority. A recent example of major project success is the new Tanami natural gas pipeline, built on budget in the Northern Territory for Newmont Goldcorp and commissioned earlier this year ahead of schedule.

For further information please contact:

Andrew Staniford, Chief Customer Officer, AGIG, T (08) 8418 1125 M (0438) 897 174
John Field, Field Public Relations T (08) 8234 9555 M (0418) 819 527