The reality of hydrogen production in Tasmania has a face after the state government threw its support behind a pitch to produce 4.5 tonnes of hydrogen at a facility in Northern Tasmania's own Bell Bay.
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Though that face comes in the form of Western Australian company Woodside Energy, their pilot - called H2TAS - includes a partnership with local retailer Tas Gas that would see hydrogen become part of the natural gas supply throughout the state.
The pilot first came to light last year in an application to the Australian Renewable Energy Agency to try and secure $70 million funding, and the Tasmanian state government has supported the project by signing a Memorandum of Understanding.
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A MOU is a preliminary written agreement that forms the basis of an ongoing agreement, and in this case it will form part of Woodside's pitch to ARENA to secure the funding.
State Growth Minister Michael Ferguson said the support offered to the pilot project would strengthen the chance for Woodside to be granted funding.
"We're giving Woodside their best opportunity to prove to ARENA that there is government support ... that there can be a development here that will generate jobs to decarbonise industry, to provide a new source of energy," he said.
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"We're super confident in the package bid that we've put in ... I think the [ARENA] government investment will accelerate the timelines and that's the impact if we don't get it, it'll slow things down a little," he said.
"But we're still keen to make things happen ... if it's compelling to continue we'll continue irregardless."
Mr Gregory said the first phase of the pilot would kick off in the third quarter of 2021 but would only provide a small investment of 50-100 jobs to the region.
Initially any hydrogen produced as part of the project would be channelled into the transport industry - namely buses and trucks.
The facility is proposed to be initially located at the Rio Industrial Centre and would be completed by 2023.
But the main benefits for Tasmanians would lie in hydrogen production if it were afforded longevity in the region. Mr Gregory said after phase one of Woodside's Bell Bay project they would look to grow the 10KW facility to 10-20 times the size.
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A larger facility would produce more hydrogen for Tasmanian consumption but also offer opportunities interstate and overseas.
"We could export Hydrogen to the mainland for the same transport use, we could export it as ammonia into other countries for power generation and those markets are on the precipice of real exponential growth right now," Mr Gregory said.
Further future potential from the project is that Tas Gas could offer access to hydrogen as part of their regular gas supply.
Mr Gregory said that the partnership between Woodside and Tas Gas was one the company hoped to continue to foster.
"We'll look for long term supply into Tas Gas," he said.
Tas Gas CEO Phaedra Deckart said partnering with Woodside afforded them the prospect of delivering Hydrogen to Tasmanians.
Ms Deckart said the Tas Gas network had the capacity for the company to deliver Hydrogen to customers sooner than other places due to their unique network. She said they would begin by blending 10 per cent of Hydrogen into their network but was "capable of delivering 100 per cent Hydrogen".
Energy Minister Guy Barnett said signing the MOU was a step in line with the government's Hydrogen Action Plan and would run alongside Marinus Link and Battery of the Nation.
"Renewable Hydrogen in Tasmania's super power," he said.
"It's up to 10 and 15 per cent more cost competitive here in Tasmania than other jurisdictions on the main land."
Labor Energy spokesperson David O'Byrne said it was "pleasing to see some progress being made".
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