A new analysis by Hydro Tasmania has shown the state is in a unique position to lead Australia in the production of green hydrogen from clean energy sources.
Hydro Tasmania chief executive Steve Davy said a large-scale, cost-competitive green hydrogen production industry could be developed in the state over the coming decade.
"Our analysis indicates that green hydrogen can be produced in Tasmania for approximately 10 to 15 per cent less than other Australian power grids needing to offset emissions and 20 to 30 per cent less than from dedicated off-grid renewables, due to their high plant utilisation that can be supported by Tasmania's hydropower," Mr Davy said.
A draft Tasmanian Renewable Hydrogen Action Plan launched on Tuesday outlines the government's vision for the state to become a world leader in large-scale renewable hydrogen production by 2030.
Energy Minister Guy Barnett said a 1000 megawatt hydrogen facility, equivalent to supplying energy to 1 million homes, would create 1200 regional jobs and would support a further 2000 megawatts of renewable energy investment in Tasmania.
"Tasmania's natural advantages and existing renewable resources mean we are perfectly placed to benefit from the emerging global hydrogen industry," Mr Barnett said.
"With emerging industries in Japan, South Korea and China, Tasmania has received significant interest from a range of proponents seeking emissions-free hydrogen at competitive rates."
Mr Davy said Hydro Tasmania was ready to support the development of a green hydrogen industry in the state.
"This includes taking a lead role in establishing a program to explore the integration of green hydrogen production with renewable energy systems, such as the ability to use excess solar and wind generation to produce hydrogen by electrolysis," Mr Davy said.
"This could make use of existing facilities including the King Island and Flinders Island renewable energy integration hubs.
"The program will also provide resources and expertise to assess the feasibility of redeveloping the Bell Bay power station site and facilities for hydrogen production and export."
Mr Barnett said the Bell Bay manufacturing zone was an ideal site for developing hydrogen.
"There are three key ingredients to the manufacturing of hydrogen: low-cost electricity, water and infrastructure. There are a number of suitable areas for a production facility here in the Bell Bay zone," he said.
George Town mayor Greg Kieser said Bell Bay was a unique opportunity for investment because of its combination of sea and road access, transport links and abundant clean energy.
"As much as we welcome the announcement from the minister, there are many manufacturers who are looking at Bell Bay as a primary production opportunity," Mr Kieser said.
"Having additional industries in our area will further the growth that we are experiencing."
Tasmanian Minerals, Manufacturing and Energy Council chief executive Ray Mostogl said a Tasmanian hydrogen industry was a potential game changer.
"While creating a new industry from scratch will involve numerous issues to be solved, having a comprehensive plan together with milestones as was launched Tuesday is an incredibly positive start," Mr Mostogl said.
Labor energy spokesman David O'Byrne said the draft plan was a rehash of information already known.
"We know other states are already well advanced in terms of implementation of [hydrogen] strategies. This work should have been done months ago," Mr O'Byrne said.
"We are worried it's too little, too late and we want the government to do more to realise the opportunity that hydrogen presents for Tasmania."
The draft action plan will be open for comment until January 10, 2020 with the final plan to be released in 2020.