Feasibility study and pilot facility to assess underground hydrogen storage in Australia

With a $2 million grant from ARENA for a feasibility study on large-scale hydrogen production and storage bolstering their H2RESTORE project, Lockhead Energy aim to repurpose underground gas storage reservoirs and assess the potential of hydrogen to shore up NEM reliability.

Lockhead H2 RESTORE
Image: ARENA

The Australian Renewable Energy Agency (ARENA) has announced a $2 million grant to Lochard Energy for an 18-month feasibility study into large-scale hydrogen production and storage in Victoria’s onshore Otway Basin.

This study is part of Lochard’s H2RESTORE project, aimed at providing long-duration, seasonal energy storage in the form of hydrogen to support the National Electricity Market (NEM).

The H2RESTORE project will employ electrolysis to generate hydrogen using excess energy from the NEM, which will then be stored underground. This stored hydrogen can later be converted back into electricity to supply the NEM during times of high demand and low supply.

The feasibility study, initiated in early 2024, ultimately aims to confirm the technical feasibility of storing hydrogen underground in porous rock, develop a concept design for an initial pilot facility, and advance planning, design, and techno-economics for a potential commercial underground hydrogen storage facility. This study builds upon a pre-feasibility study conducted in 2023.

Lochard Energy, utilising experience in energy security and reliability built through its Iona Gas Storage Facility in Victoria, aims to repurpose some of its existing underground gas storage reservoirs for hydrogen storage in the long term.

ARENA CEO Darren Miller said the project is tackling one of the most challenging aspects of using renewable hydrogen as a form of long duration energy storage.

“Renewable hydrogen has an important role to play in helping Australia reach net zero, but cost-effective storage is a looming challenge for the industry. Solving the storage issue will be critical to enabling renewable hydrogen to be used as a form of long duration energy storage in Australia." Mr Miller said.

ARENA will collaborate with Lochard to share insights from the project, including feasibility of large-scale renewable hydrogen storage, economic viability, social considerations, and knowledge sharing.

For more information on the H2RESTORE project, visit ARENA’s website here.

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