The South Australian government has announced a hydrogen agreement with GFG Alliance.

The deal with the conglomerate operating the Whyalla steelworks will see a deeper exploration of the potential market for hydrogen fuel. 

This initiative is part of a broader $593 million Hydrogen Jobs Plan aimed at enhancing the state's energy supply through the development of a 200 megawatt hydrogen power plant and storage facility near Whyalla on the Eyre Peninsula.

SA Premier Peter Malinauskas says the project could have a number of benefits. 

“We got our own customer for the hydrogen that we produce, that would be the power plant itself,” he said.

The Premier also noted the potential for a commercial offtake agreement to bolster the transition to green iron and steel production.

However, Malinauskas says deliberations over the financial aspects of the hydrogen sale to GFG Alliance, led by British billionaire Sanjeev Gupta, are ongoing. Negotiators are seeking to strike a balance between the cost of hydrogen production and the imperative to meet the state's energy demands.

GFG Alliance has also signed a memorandum of understanding with Santos for natural gas supply, aiding the transition towards green iron production.

The government has also announced the construction of 82 workers’ cabins across two sites in Whyalla, designed to house the influx of 1,000 workers expected by the project's peak in 2026.