Lochard explores underground hydrogen storage to shift energy

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Lochard Energy is undertaking a $6.3 million (USD 4.1 million) feasibility study that will investigate the commercial and technical viability of using existing naturally occurring gas reservoirs in Victoria’s Otway Basin for the storage of renewable hydrogen.

Victorian-headquartered Lochard, which owns and operates the Iona gas storage facility near Port Campbell on the state’s southwest coast, said there is potential to help provide grid stability through the provision of long-duration, seasonal energy storage in the form of green hydrogen as Australia transitions away from coal-fired generation.

The feasibility study is the second stage of Lochard’s H2Restore green hydrogen production and storage project, which aims to utilise excess energy from the National Electricity Market (NEM) to generate green hydrogen by electrolysis. This would then be stored underground to be converted back into electricity to help balance supply and demand.

“This funding will enable us to do the necessary studies to progress a pilot facility demonstrating Lochard Energy’s capability to store hydrogen underground and provide support for the development of a large-scale commercial facility,” Lochard Chief Executive Officer Tim Jessen said.

The 18-month study is examining the technical feasibility of storing hydrogen underground in porous rock and will also seek to develop a concept design for an initial pilot facility, as well as progress planning, design and techno-economics for a potential commercial underground hydrogen storage facility.

Jessen said the feasibility study and anticipated pilot facility are first-of-a-kind for underground hydrogen storage in Australia and it is hoped the study will lead to the commercialisation of underground storage of green hydrogen.

ARENA Chief Executive Officer Darren Miller said the project is tackling one of the most challenging aspects of using green 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,” he said. “Solving the storage issue will be critical to enabling renewable hydrogen to be used as a form of long duration energy storage in Australia.”

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