The Australian renewable energy agency (ARENA) has committed a $7.5 million to Australian energy company Jemena to build a demonstration scale 500kW electrolytic cell, known as H2GO project, at its plant in western Sydney.

The A $15 million, two-year pilot project will connect to Jemena's existing gas network, which supplies gas to 1.3 million customers across New South Wales. In a press release, ARENA noted that hydrogen can be safely added to natural gas mains at concentrations up to 10 percent without affecting pipelines, equipment or regulations. Much of the hydrogen generated will be injected into the local gas network for domestic use and will demonstrate the potential for renewable hydrogen storage in Australia's gas network.

"In the future, Australians will need to decide how to use excess renewable energy on windy or very sunny days. Jemena's H2GO project will demonstrate how existing gas pipeline technology can store weeks and months of excess renewable energy, making it more efficient than batteries that can store minutes or hours of excess renewable energy."

"Hydrogen storage will play an important role as Australia transitions to renewable energy and can also decarbonise the gas network through 'green' gas," the CEO said. "The power-gas value chain has great potential, including the ability to stabilize the grid and pair renewable energy with electrolyzers to absorb and store excess power."

In the longer term, hydrogen could also become a major export opportunity for Australia. Earlier this month, ARENA announced a A $22 million R&D funding to export hydrogen, supporting 16 research projects at nine Australian universities and research institutions, as hydrogen is seen as a potential major export opportunity.