Hydrogen: A confirmed green strategy for NSW

This article was co-authored with Amelia Martin.

The NSW government has recently announced its strategy to promote the development of a commercial green hydrogen¹ industry. The ‘NSW Hydrogen Strategy’ can be found here.

The strategy seeks to remove barriers, create incentives and build demand for green hydrogen. It also capitalises on some existing advantages that NSW has to offer, such as the existence of sustainable water resources, fast planning pathways, an increasingly renewable energy generation fleet, early stage hydrogen projects and the existing expertise.

Over the past few years, international attention has come to focus on green hydrogen as a leading technology for the decarbonisation of hard-to-abate energy, transport and industrial sectors. At Norton Rose Fulbright, we have first-hand insight into that shifting focus and are working with clients across the hydrogen spectrum to address the opportunities and risks presented.

The strategy released by the NSW government will support its net-zero emissions goal and assist in positioning NSW businesses to share in the market and supply chains that will build the green hydrogen industry worldwide.

The NSW Hydrogen Strategy employs a three-pillar approach for rapidly increasing the scale and competitiveness of green hydrogen in NSW, which is supported by up to $3 billion of incentives for investment in production and technology development.

Specifically, these three pillars are:

1. Enable industry development through establishing hydrogen-ready regulatory frameworks, developing industry skills, supporting innovation projects and planning for the infrastructure necessary to store and transport hydrogen;
2. Lay industry foundations by investing $70 million to establish hydrogen hubs (initially in the Hunter and Illawarra regions), rolling out a hydrogen refuelling network along key freight routes and providing $78 million funding for Australia’s first green hydrogen and gas plant; and
3. Remove certain costs and barriers and drive scale through concessions to network use of systems charges for electrolysers in operation by 2030 and providing exemptions to electricity schemes (e.g. NSW Energy Savings Scheme etc.).

Our clients tell us that these commitments will increase confidence to pursue and expand hydrogen pilot programs and move towards the planning for large scale projects.

The current 2030 “stretch” targets of the strategy, include:

• 110,000 tonnes of annual green hydrogen produced from 700 MW of electrolyser capacity;
• 10,000 hydrogen vehicles on the road, which can be refuelled at 100 stations across NSW; and
• Hydrogen prices under $2.80/kg.

These pillars are consistent with the Commonwealth Government’s National Hydrogen Strategy but have given more detail on the locations and steps for the large scale hydrogen hubs, which are central to the Commonwealth’s strategy for the development of Australia’s hydrogen economy. Similarly, the push to remove regulatory and infrastructure barriers, and drive down the hydrogen price, ensures a synergy between the two strategies, which is welcomed by industry.

This significant investment is expected to present a range of innovation and growth opportunities to those in the NSW energy and transport sectors. There will also be important opportunities to engage with government and regulators to help shape the regulatory regime around hydrogen operations from an industry perspective.

Our global expertise in hydrogen and local multi-disciplinary energy and infrastructure team places us ideally to assist clients in navigating these emerging opportunities. Our ability to draw on our collective multi-jurisdictional expertise has ensured our clients are well informed of each and every possibility when it comes to identifying and pursuing the bountiful opportunities that hydrogen presents.