OFFICE OF HYDROGEN POWER SOUTH AUSTRALIA

91 King William Street, Adelaide. GPO Box 320, Adelaide 5001

www.ohpsa.sa.gov.au

Contact phone number: (08) 7085 1750
Contact email: ohpsa.enquiries@sa.gov.au

ISSN: 2653-5432

Date presented to Minister: 30 September 2024

To: Honourable Tom Koutsantonis MP

Minister for Infrastructure and Transport
Minister for Energy and Mining
Leader of Government Business

This annual report will be presented to Parliament to meet the statutory reporting requirements of (Public Sector Act 2009 (Part 3, s 12) and the Public Sector Regulations 2010 (Part 2, reg 7) and the requirements of Premier and Cabinet Circular PC013 Annual Reporting.

This report is verified to be accurate for the purposes of annual reporting to the Parliament of South Australia.

Submitted on behalf of the OFFICE OF HYDROGEN POWER SOUTH AUSTRALIA by:

Sam Crafter
Chief Executive

Date 30/09/2024

From the Chief Executive

In February 2024, the South Australian government launched its State Prosperity Project. This project provides the pathway for our State to seize a once-in-a-generation economic opportunity centred around renewable energy, copper production and green iron and steel. Hydrogen is at the forefront of this opportunity and the Office of Hydrogen Power South Australia (OHPSA) has been focused on delivering a suite of activities to advance these objectives in the Upper Spencer Gulf.

Over 2023-24, OHPSA achieved several significant milestones for the Hydrogen Jobs Plan project.

Following our global procurement process in 2022-23, the focus in early 2023-24 shifted to completing a detailed evaluation of the submissions received. This led to the award of Early Contractor Involvement (ECI) contracts in October 2023 to our preferred project delivery partners. The selected partners are highly experienced in energy sector design and construction, both nationally and globally, with valuable operational expertise.

An ECI contracting approach was selected as it allows us to work with our preferred partners to refine detailed project design and establish firm cost estimates. The design and engineering work carried out during the ECI phase is integral to project success and the value-adding activities that occur during this phase have been integrated into OHPSA's project plans, resourcing, schedules and budgets.

The ECI phase also allows us to work with our partners to procure key pieces of equipment, and in February 2024 we were able to confirm our preferred power generation equipment supplier. In a world-first, the project will use General Electric turbines capable of running on 100% hydrogen.

We are also working closely with key stakeholders to ensure the necessary infrastructure is in place to support project delivery. This includes collaboration with ElectraNet on electricity infrastructure and connections, and SA Water for water infrastructure and supply.

Beyond the Hydrogen Jobs Plan project, there has been continued interest from the private sector in leveraging South Australia’s abundant renewable energy resources to advance hydrogen production projects. OHPSA’s Industry Development team provides a ‘front door’ to state government for these projects, helping accelerate the full range of hydrogen sector development opportunities for South Australia.

The Port Bonython Hydrogen Hub is another key priority for OHPSA, and we achieved a significant milestone in October 2023 with the signing of a matched funding grant agreement with the Australian Government. This investment will support the development of common user infrastructure at the hub, accelerating its progress.

We have prioritised engineering and commercial assessments, alongside critical environmental studies, to better understand the marine and terrestrial ecosystems around Port Bonython. These efforts aim to minimise community impact and safeguard local marine life, including the Giant Australian cuttlefish.

OHPSA remains committed to engaging with the community and creating business and employment opportunities in Whyalla and the broader Upper Spencer Gulf. Through our regional office in Whyalla and participation in community and industry events like the Whyalla Show, the Yorke Peninsula Field Days, Nyrstar Port Pirie Smelters Picnic and the Tactic Conference and Trade Expo, we provide locals with the latest updates on South Australian government hydrogen projects and initiatives and the broader State Prosperity Project.

In addition, we maintain regular consultations with local suppliers and employment service providers, working closely with our ECI partners, the Industry Capability Network SA, City of Whyalla Council, Regional Development Australia, Workforce Australia providers, and local chambers of commerce. Interest in the project has been strong, with over 700 general registrations of interest on the Industry Capability Network (ICN) Gateway and nearly 500 people attending two early industry briefings in Whyalla.

Maintaining strong relationships with the Barngarla people, the Traditional Owners of land in and around the City of Whyalla, remains a central priority, and we continue to work closely with the Barngarla Determination Aboriginal Corporation (BDAC), Barngarla community and broader Aboriginal community in Whyalla. We are committed to ensuring that Barngarla people are involved early in project discussions and share in the benefits these projects will deliver, with an overarching aim of creating long-term, sustainable benefits for the Aboriginal community in Whyalla.

The State Prosperity Project highlights the unique opportunity presented to South Australia and the role that hydrogen can play in seizing this opportunity. OHPSA is proud to support the realisation of these ambitions and to deliver real benefits for the Upper Spencer Gulf and South Australia more broadly.

Sam Crafter
Chief Executive
Office of Hydrogen Power South Australia

Contents

Overview: about the agency
Our strategic focus
Our organisational structure
Changes to the agency
Our Minister
Our Executive team
Other related agencies (within the Minister’s area/s of responsibility)
The agency’s performance
Performance at a glance
Corporate performance summary
Employment opportunity programs
Agency performance management and development systems
Work health, safety and return to work programs
Executive employment in the agency
Financial performance
Financial performance at a glance
Consultants disclosure
Contractors disclosure
Risk management
Risk and audit at a glance
Fraud detected in the agency
Strategies implemented to control and prevent fraud
Public interest disclosure
Reporting required under any other act or regulation
Public complaints
Number of public complaints reported
Additional Metrics
Service Improvements
Compliance Statement
Appendix: Audited financial statements 2023-24

Overview: about the agency

Our strategic focus

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Our organisational structure

Changes to the agency

During 2023-24 there were no changes to the agency’s structure and objectives as a result of internal reviews or machinery of government changes.

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Our Minister

Honourable Tom Koutsantonis

Tom has been the Member of Parliament for the seat of West Torrens since 1997 and is currently Minister for Infrastructure and Transport, Minister for Energy and Mining and the Leader of Government Business in the House of Assembly.

Tom previously held ministerial appointments for Transport and Infrastructure between 2013 and 2014 and Mineral Resources and Energy between 2011 and 2018. He was also responsible for these portfolios in the Shadow Ministry between 2018 and 2022.

Our Executive team

As at 30 June 2024, OHPSA’s Executive Leadership team comprised:

Sam Crafter, Chief Executive
Nicola McFarlane, Chief Operating Officer
Amy Butler, Director, Strategic Policy and Corporate Services
Richard Day, Director, Industry Development
Maria Kosti, Director, Strategic Communications and Stakeholder Engagement
Sean Moules, Director, Engineering
Martin Reid, Director, Development and Approvals
David Penov, Director, Program Delivery

Legislation administered by the agency

OHPSA does not administer any legislation.

Other related agencies (within the Minister’s area/s of responsibility)

OHPSA is an attached office to the Department for Energy and Mining.

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The agency’s performance

Performance at a glance

Following a competitive global procurement and a comprehensive evaluation process, in October 2023 the South Australian government awarded Early Contractor Involvement (ECI) contracts for the delivery of the hydrogen electrolysers, generators and storage facilities associated with the Hydrogen Jobs Plan.

An ATCO Australia and BOC consortium was selected as the preferred project partner to deliver an end-to-end project solution, offering significant design and build experience in electrolysers, generators and on-site storage, as well as operational expertise. This consortium brings together ATCO Australia’s extensive experience in natural gas infrastructure and BOC’s specialisation in gas processing, backed by its position as a subsidiary of the global Linde Group.

An ECI agreement was also signed with Epic Energy, a leading South Australian energy infrastructure company, to develop an alternative integrated pipeline and hydrogen storage solution. Epic Energy has a gas pipeline network spanning over 1,200 kilometres and a renewable energy portfolio of wind, solar and microgrid assets.

The ECI contracting approach was designed to enable the South Australian government to work closely with preferred partners to develop detailed design and firm costings for the project, which will then form the basis of a final construction contract.

All ECI activities and deliverables are essential project definition, planning and contracting artefacts that need to be developed to be able to enter into a delivery phase contract. Therefore, this value adding work has been integrated into OHPSA's Hydrogen Jobs Plan resourcing, plans, schedules and budgets. It also allows the South Australian government to order critical pieces of equipment that might impact the overall project schedule if delayed.

In February 2024, a significant milestone was achieved for the project with the nomination of General Electric (GE) Vernova as the preferred supplier of the fast-start up turbines for the power generator which in a world-first will be 100% hydrogen-capable.

Concurrently, progress has been made on essential infrastructure to support project delivery. OHPSA continues to work with ElectraNet to enhance electricity infrastructure and connections, supporting not only the Hydrogen Jobs Plan, but also to strategically support the delivery of other major developments in the region.

OHPSA has continued to work with SA Water to develop the water infrastructure and supply solution for the Hydrogen Jobs Plan. The water requirements for the project have been minimised through design decisions and are relatively modest. OHPSA is also investigating the opportunity for an additional or alternative water supply solution from the Northern Water project once it is operational.

Planning and regulatory approvals for the Hydrogen Jobs Plan are now well progressed, with the project’s development application under the state’s Planning, Development and Infrastructure Act 2016 submitted in April 2024.

The project was also referred under the Environment Protection and Biodiversity Conservation Act 1999 in December 2023 and has since been declared a controlled action due to the potential impact on two listed bird species. The facilities have been situated and designed to minimise the clearance of highly suitable habitat for both species, and OHPSA continues to work collaboratively with the Australian Government to ensure the project is delivered in a way that avoids or limits environmental impacts.

Workforce accommodation is also a key focus, and the South Australian government is committed to ensuring the project workforce does not create additional accommodation shortages in an already constrained region. Work has continued with project partners as well as the City of Whyalla Council and other Government of South Australia agencies to identify solutions that increase Whyalla’s accommodation capacity and deliver enduring benefits for the region.

OHPSA has partnered with Discovery Holiday Parks to deliver 32 high-quality cabins and new recreational facilities at the existing Discovery Parks Whyalla Foreshore Caravan and Holiday Park to accommodate the earliest Hydrogen Jobs Plan workforce.

Cabins that are not booked for use by the Hydrogen Jobs Plan workforce will be available to visitors to book and enjoy.

In a further boost to regional accommodation capacity, a Heads of Agreement has been signed with Bentley’s Cabin Parks to progress plans to build 50 cabins at Kloeden Reserve in Whyalla, with the potential for future expansion.

As well as pursuing permanent accommodation solutions, plans for a temporary accommodation village are also underway. ‘Yoorla Garngoo’ Village (a Barngarla phrase translating to ‘a resting place; camp; at home’) will feature quality residential and recreational amenities and is likely to have an initial capacity of 368 beds, with options to scale up capacity if required.

The proposed location, adjacent to Jubilee Park in Whyalla, is conveniently located on the city fringe, striking a balance between creating a self-contained village, and ensuring workers are close enough to the city centre to deliver an economic boost to local businesses.

Steady progress is also continuing in the Port Bonython Hydrogen Hub project, where OHPSA continues to work with project partners to develop South Australia’s first large-scale clean hydrogen production and export precinct.

Development Agreements are in place with five Port Bonython Hydrogen Hub developers, providing a clear pathway for project partners to secure a long-term lease on land at Port Bonython.

The Australian Government and Government of South Australia signed a grant agreement in October 2023 to invest in developing common user infrastructure at the proposed Port Bonython Hydrogen Hub. Through the agreement, the Australian Government has committed $70 million in matched funding, with $30 million from the South Australian government and $40 million expected to be contributed by project partner developers to enable the export of hydrogen from the Port Bonython jetty and early investigations into other potential common user infrastructure.

An Activity Implementation Plan was submitted to the Australian Government in March 2024, meeting the first milestone under the grant agreement.

A master planning process with project partners is underway and is designed to support the development of common user infrastructure solutions, such as pipelines, tank storage, marine export infrastructure and precinct enabling infrastructure. Engineering and commercial investigations have been prioritised, as these will help to determine the future use of the Port Bonython jetty in enabling hydrogen export.

Part of this process includes a comprehensive suite of crucial environmental studies to develop a deeper understanding of the marine and terrestrial environment at Port Bonython. These efforts aim to minimise community impact and safeguard local marine life, including the Giant Australian cuttlefish.

In addition to demonstrating OHPSA’s commitment to protecting the environment in the Upper Spencer Gulf, these studies are intended to help project partners understand the risks and opportunities associated with the hub.

This work is being led through a development committee which was established in 2023 to support the state’s development and delivery of common user infrastructure through the delivery of joint studies and investigations between the state and its participating project partner members.

Since its establishment, OHPSA’s Industry Development team has proactively engaged with industry across the hydrogen ecosystem and has built a knowledge bank of industry intelligence which is being drawn upon to generate advice and inform policy, strategy, and communications. The team has also facilitated industry growth opportunities by brokering industry and state government connections and accelerating the development of private sector led renewable energy and hydrogen projects.

The Australian Government estimates that the national hydrogen industry could contribute $50 billion to the economy and create over 16,000 jobs by 2050, many of which will be in regional Australia. Work is underway to develop a hydrogen strategy that outlines South Australia’s next actions to capitalise on this opportunity.

Community engagement has continued to be a priority throughout 2023-24, particularly engagement with the Barngarla community as the Traditional Owners of the land in and around Whyalla.

OHPSA has built a strong working partnership with the Barngarla Determination Aboriginal Corporation (BDAC) with engagements designed to provide an opportunity for the Barngarla community to influence the planning and delivery of projects that affect their land and culture, as well ensuring tangible community benefits flow from the delivery of those projects.

The South Australian Aboriginal Renewable Energy Forum, led by the Department for Energy and Mining, remains an important forum to facilitate a two-way conversation about how the renewable transition, including hydrogen, can be a vehicle for Aboriginal self-determination.

As we approach the construction phase of the project, it becomes increasingly important to ensure OHPSA has an accessible and prominent presence in the local community. A visible and accessible Whyalla office was established in February 2024 and is open to the public every week from Tuesday to Thursday. The regional office serves as an accessible platform to provide community and businesses with information about the Hydrogen Jobs Plan and the opportunities it presents for local economic development, as well as other hydrogen initiatives in the region.

Locals have used the office to meet with representatives from OHPSA, as well as ICN SA, Hydrogen Jobs Plan ECI partners, the Office of Northern Water Delivery, and other state government agencies.

OHPSA representatives are also regularly present at local community events, including the Whyalla Show, Yorke Peninsula Field Days, Nyrstar Port Pirie Smelters Picnic, and the Tactic Conference and Trade Expo to provide hydrogen education and project information.

OHPSA continues to regularly engage with the City of Whyalla Council as a critical stakeholder, as well as the councils of Port Augusta and Port Pirie, the Spencer Gulf Cities group and Regional Development Australia (RDA) Far North and RDA Eyre Peninsula.

Local employment is major priority and OHPSA has engaged with multiple employment service providers, including labour hire firms, group training organisations, general recruiters, and Workforce Australia providers to establish a pipeline of potential employees for construction of the Hydrogen Jobs Plan facility. The main avenue to local employment is through the sub-contracting of local businesses, and OHPSA has held two substantial industry events at Whyalla in December 2023 and February 2024. These events were held in partnership with ECI partners, the City of Whyalla, and local chambers of commerce. It is anticipated that these consultations will continue over 2024-25.

OHPSA has also procured a Social Impact Planning report to ensure that it is partnering with social service and other providers to underpin a just transition into renewable energy. Key issues being monitored are housing, employment, business development, emergency services, and transport.

During 2023-24 OHPSA has continued to represent South Australia at several significant global hydrogen events in Australia and abroad, including the International Mining and Resources Conference in Sydney in October 2023, International Hydrogen and Fuel Cell Expo in Tokyo in March 2024 and the World Hydrogen Summit in Rotterdam in May 2024.

Attendance at these events provided invaluable opportunities for direct interaction with investors and key stakeholders to promote South Australia’s leadership in building hydrogen production capability for both the domestic industry and export markets.

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Corporate performance summary

The majority of the corporate services for OHPSA are provided by the Department for Energy and Mining through a service level agreement.

Employment opportunity programs

Agency performance management and development systems

Work health, safety and return to work programs

*number of claimants assessed during the reporting period as having a whole person impairment of 30% or more under the Return to Work Act 2014 (Part 2 Division 5)

**before third party recovery

Data for previous years is available at: 2022-2023-ohpsa-annual-report-statistics.xlsx (live.com)

Executive employment in the agency

Data for previous years is available at: 2022-2023-ohpsa-annual-report-statistics.xlsx (live.com)

The Office of the Commissioner for Public Sector Employment has a workforce information page that provides further information on the breakdown of executive gender, salary and tenure by agency.

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Financial performance

Financial performance at a glance

The following is a brief summary of the overall financial position of OHPSA. Full audited financial statements for 2023-2024 are attached to this report.

The total income received by OHPSA for the 2023-24 financial year was $166 million, an increase of $153 million from the previous year due to:

• $125 million increase in appropriation transferred from DEM for OHPSA’s operating and capitalised budget for FY 2023-24, reflecting increased activity towards delivering the Hydrogen Jobs Plan,
• $23 million funding transferred from the Department of Treasury and Finance for the State’s FY 2023-24 contribution towards the Port Bonython Hydrogen Hub project, and
• $6 million Commonwealth funding transferred through the Department for Infrastructure and Transport for the Port Bonython Hydrogen Hub project.

Actual expenses were $19.7 million below budget in FY 2023-24 due to the Port Bonython Hydrogen Hub project expenditure being deferred to FY 2024-25 once the revised revenue and expenditure schedule is approved by the Commonwealth.

Cash and cash equivalents increased by $95 million from the previous year due to appropriation funding being held for the Hydrogen Jobs Plan and Port Bonython Hydrogen Hub project that will be spent in FY 2024-25 and FY 2025-26 in line with the revised expenditure schedule submitted to the Commonwealth.

Non-current assets of $63 million relate to the commencement of capitalised work as the Hydrogen Jobs Plan project entered the Early Contractor Involvement phase, the procurement of long-lead equipment, and capitalised work in progress for hydrogen production and storage.

The increase in current liabilities is due to the level and timing of invoices received late June 2024, recognised as unpaid as of 30 June 2024 but with payment occurring early July 2024 in line with the State Government’s 15-day payment commitment.

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Consultants disclosure

The following is a summary of external consultants that have been engaged by the agency, the nature of work undertaken, and the actual payments made for the work undertaken during the financial year as per the attached FY 2023-24 Audited Financial Statements.

Consultancies with a contract value below $10,000 each

Consultancies with a contract value above $10,000 each

Data for previous years is available at: 2022-2023-ohpsa-annual-report-statistics.xlsx (live.com)

See also the Consolidated Financial Report of the Department of Treasury and Finance for total value of consultancy contracts across the South Australian Public Sector.

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Contractors disclosure

The following is a summary of external contractors that have been engaged by the agency, the nature of work undertaken, and the actual payments made for work undertaken during the financial year as per the attached FY 2023-24 Audited Financial Statements.

Contractors with a contract value below $10,000

Contractors with a contract value above $10,000 each

Data for previous years is available at: 2022-2023-ohpsa-annual-report-statistics.xlsx (live.com)

The details of South Australian government-awarded contracts for goods, services, and works are displayed on the SA Tenders and Contracts website. View the agency list of contracts.

The website also provides details of across government contracts.

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Risk management

Risk and audit at a glance

A combined Audit and Risk Committee (ARC) was established in April 2023 to focus on both the Department for Energy and Mining (DEM) and OHPSA.

The role of the ARC is to provide oversight and facilitate continuous improvement for external financial reporting, internal control systems, risk management systems and the internal and external audit functions. Membership consists of both internal and external representatives and the committee is independently chaired. It met five times during 2023-24.

During 2023-24 the ARC focused on risk management processes and systems to ensure effective management of its strategic risks. Controls and treatments have also been assigned to relevant directors and managers to implement, with oversight provided by the leadership team and the ARC.

Regular risk workshops are held to update OHPSA’s risk register and reassess identified risks and mitigations. As of 30 June 2024, there were a total of 152 open risks on the risk register. There is now a consistent use of the OHPSA risk registers across all projects and functions and as the basis for all risk reporting.

The agency’s Internal Audit Plan for 2023-24 and the preliminary plan for the forward four financial years was endorsed by the ARC and approved by the Chief Executive, DEM. The internal audit projects are designed to provide assurance that the agency’s strategic risks are effectively managed and relevant internal controls are continuously improved.

Fraud detected in the agency

NB: Fraud reported includes actual and reasonably-suspected incidents of fraud.

Strategies implemented to control and prevent fraud

The agency continued to take a risk-based approach to control and prevent instances of fraud. The control framework includes fraud, corruption, misconduct and maladministration policy and procedure. Fraud control activities during the year included prevention activities, such as approved delegations and segregation of responsibilities, and detection activities, such as financial reporting and compliance reviews. The agency is continuously reviewing and improving its fraud control activities.

Data for previous years is available at: 2022-2023-ohpsa-annual-report-statistics.xlsx (live.com)

Public interest disclosure

Number of occasions on which public interest information has been disclosed to a responsible officer of the agency under the Public Interest Disclosure Act 2018:

0

Data for previous years is available at: 2022-2023-ohpsa-annual-report-statistics.xlsx (live.com)

Note: Disclosure of public interest information was previously reported under the Whistleblowers Protection Act 1993 and repealed by the Public Interest Disclosure Act 2018 on 1/7/2019.

Reporting required under any other act or regulation

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Public complaints

Number of public complaints reported

Additional Metrics

Data for previous years is available at: 2022-2023-ohpsa-annual-report-statistics.xlsx (live.com)

Service improvements

Compliance Statement

Appendix: Audited financial statements 2023-24

Audited financial statements 2023-24 (PDF, 5.0 MB)

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