Australian Chart of the week | Hydrogen plants could profit in South Australia

The South Australian Labor party has committed to building a hydrogen production, storage and electricity generation facility if elected at the next SA State election.

Their proposal includes a $220 million 250 MWe electrolyser, $31 million for 3,600 tonnes of liquefied hydrogen storage and $342 million for a 200MW CCGT power station.

Their plan highlights the 300 construction jobs that would be created, however, excludes details on how often the plant would run, how much hydrogen it would produce and how profitable the plant could be. For this week’s ‘Chart of the week’, we have analysed these factors over summer 2021.

Amazingly if the plant had been in operation this summer it could have made a profit of ~$2.3 million (assuming 100% debt financing from SA bonds at 1.75% and no equity returns). This is based on a 20% utilisation and includes the expected quarterly repayment on the $593 million of government debt with interest, operating costs, and the net cost of energy. If the plant was available last summer it could have made ~ $47 million in profit, opposed to a ~$2.3 million loss in summer Q1 2019.

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