Hydrogen and water offices dissolved as SA government shifts duties to department

Australia Broadcast Center

01-05-2025

The South Australian government has denied a decision to dissolve a standalone office for hydrogen signals a lack of commitment to the fuel source over the long term — but the opposition says it shows the plan now lies "in tatters".
The Office of Hydrogen Power South Australia was created to carry out the state government's pre-election promise to build a hydrogen power station and electrolyser near Whyalla.
Photo shows
A green sign for Hydrogen Power SA erected on a vacant arid site in Whyalla
The SA government's plan to build a major hydrogen electrolyser and power plant near Whyalla has been scrapped, with the premier blaming the lack of progress on a plan for green steel at the local steelworks for the decision.
But in a statement to parliament, Energy Minister Tom Koutsantonis said the office would "cease to function" and that its responsibilities would be transferred to the Department for Energy and Mining.
The Office of Northern Water Delivery, which has overseen plans for a 260-megalitre desalination plant on Eyre Peninsula, will similarly be discontinued and will also have its functions absorbed by the department.
The Whyalla hydrogen plant was
But the proposed hydrogen
An artist's impression of the now shelved hydrogen proposal.
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YouTube: Energy and Mining SA
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But Mr Koutsantonis said the long-term need for a hydrogen production facility had not changed.
"Ultimately, one day you will need to have a hydrogen facility to decarbonise steel,"
he said.
"That'll depend entirely on who purchases the steelworks, what their time frames are for investment in direct iron reduction and [an] electric arc furnace."
Photo shows
An artist's impression of an overhead view of the proposed Whyalla hydrogen project.
Four years after the South Australian government's bold and ambitious — but very much hypothetical — hydrogen power plant was first announced, there have been inauspicious developments concerning its future.
The government previously came under fire for keeping the hydrogen office open, and retaining its head Sam Crafter on a salary of more than half a million dollars, even after it shelved plans for the hydrogen plant.
Mr Koutsantonis told parliament Mr Crafter had now been moved to a new role.
"Sam Crafter, who has led the Office of Hydrogen Power SA, has been appointed to this new role of State Lead, Whyalla Steelworks Industrial Transformation, operating within the Department for Energy and Mining," he said.
Opposition Leader Vincent Tarzia said the developments were proof that the government's hydrogen plan had "failed".
"Today's scrapping of the Office of Hydrogen Power and the Office of Northern Water Delivery confirms what is a complete failure of the government's much hyped state prosperity plan and the breaking of a key election," he said.
"The two major projects of the plan now, quite frankly, lie in tatters.
"There's been an eye-watering amount of money, taxpayer dollars, wasted on this hydrogen hoax and also mismanagement of the Northern Water Project. This is now raising serious concerns."
Desal plant 'relies on' BHP
In February last year, the
Mr Koutsantonis was adamant the decision to discontinue the Office of Northern Water Delivery indicated not a move away from that project, but an "acceleration" of it.
Mr Koutsantonis says the government is pushing ahead with its desalination plant plan.
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ABC News: Che Chorley
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He said the government was now putting its mind to whether Mullaquana or Cape Hardy was the more suitable site.
"The Office of Northern Water Delivery now has completed its task and that is now being put into the Department of Energy and Mining. We're moving onto the next stage, which are the negotiations with BHP," he said.
"We've not reached final investment decision yet because it entirely relies on an agreement with BHP to purchase the water.
"We're not going to build a desal plant and hope they buy it — we need a written agreement in place that they would purchase the water."