Plans to swap gas for ‘renewable hydrogen’ in supplies to millions of Australian homes will be developed under a new initiative backed by the country’s government, along with global wind and solar players Engie and Neoen.

The newly-created Australian Hydrogen Centre (AHC) will by the end of 2022 draw up studies for injecting up to 10% renewable hydrogen into the gas distribution networks of selected towns in the states of South Australia and Victoria.

The AHC will then look at ways to widen the 10% mix into their wider gas infrastructure “and develop a pathway to make the transition to 100% hydrogen networks” in the states, which include the major cities of Melbourne and Adelaide.

Australian Gas Networks received A$1.28m ($845,000) from the Australian Renewable Energy Agency (ARENA) to fund the work at AHC, which is backed by Engie and Neoen, both significant players in the country’s renewables sector.

South Australia, which will host the AHC, said: “Considering South Australia’s enormous wind and solar resources, we have significant natural advantages that can be leveraged to produce, consume and export 100% green hydrogen.” The state in 2019 announced ambitious plans to become an exporter of green hydrogen to other nations in the Asia-Pacific region.

The use of ‘blended’ hydrogen produced via renewable generation and natural gas, and an eventual direct replacement of the fossil fuel in the existing gas network, is seen as one of the big potential wins of the energy transition as a way to decarbonise heating, although major challenges remain in terms of technology and cost reduction.

Efforts underway in Europe by players including Engie have seen mixes of up to 20% green hydrogen used in pilot projects.

The AHC’s work will build on a test programme already underway at the Hydrogen Park South Australia (HyP SA), which will inject a 5% renewable hydrogen blend into pipes serving 710 homes. The electricity used in hydrogen production there will be deemed renewable via carbon offsetting.