Lochard to study underground hydrogen storage in Victoria

Infographic explaining underground hydrogen storage pilot developed by Lochard Energy
Image: Lochard Energy

Lochard Energy has secured $2 million in funding from the Australian Renewable Energy Agency (ARENA) for an 18-month feasibility study into large-scale hydrogen production and storage in Victoria’s onshore Otway Basin—the first of its kind in underground hydrogen storage in Australia.

The feasibility study, costing $6.3 million in total, is the second stage of Lochard’s H2RESTORE project, which aims to help firm the National Electricity Market (NEM) through the provision of long duration, seasonal energy storage in the form of hydrogen.

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H2RESTORE is being designed to generate hydrogen by electrolysis using excess energy sourced from the NEM and storing it underground. The hydrogen can be converted back into electricity to supply the NEM when demand is high and supply is low.

Lochard owns and operates the Iona Gas Storage Facility near Port Campbell, Victoria. The H2RESTORE project will look at repurposing some of Lochard’s existing underground gas storage reservoirs in the long term to safely store hydrogen. Repurposing existing underground gas storage assets could help bring down the cost of storage and store renewable hydrogen for longer duration, seasonal storage.

The feasibility study commenced in early 2024 with objectives to confirm technical feasibility of storing hydrogen deep underground in porous rock (sandstone), develop a concept design for an initial pilot facility, and progress planning, design and techno-economics for a potential commercial underground hydrogen storage facility.

Lochard hopes the feasibility study will lead to the commercialisation of underground storage of renewable hydrogen, which could help with security of energy supply, firm power to the NEM and, if established, support further development of a hydrogen economy in Victoria, including the potential to supply reliable hydrogen to Power-to-X users.

Lochard’s feasibility study and anticipated pilot facility are first-of-a-kind work in underground hydrogen storage in Australia.

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Lochard Energy CEO Tim Jessen said, “We are thrilled to receive this support from ARENA, which recognises the potential of the H2RESTORE project to transform the way energy is stored and utilised as Australia transitions to net zero emissions.

“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.”

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