Own AGL shares? Here's what to know about the company's latest green hydrogen push  

The energy giant is looking into building a South Australian hydrogen hub.

| More on:
a man stands at a green blackboard where a scientific equation is written in chalk. He looks over his shoulder and holds two fingers of each hand in the air as he smiles, trying to illustrate the formation of hydrogen atoms.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • AGL has embarked on a path that could see it building a green hydrogen hub near Adelaide 
  • The company is leading a feasibility study to consider creating a hydrogen facility at the site of its Torrens Island gas-fired power station
  • The study will also consider input from a consortium of industry partners including Brickworks and Adbri

Owners of AGL Energy Limited (ASX: AGL) shares, rejoice. The company's taking another step towards a green hydrogen-focused future.

It's launching a study to consider transforming its Torrens Island site in South Australia into a renewable hydrogen hub.

The study – lead by the S&P/ASX 200 Index (ASX: XJO) energy giant – will consider input from a consortium of industry participants.

It's just the latest potential green hydrogen hub to be flagged by the company. AGL is also considering producing the renewable commodity in the Hunter Valley.

At the time of writing, the AGL share price is $8.41, unchanged from Friday's close. For context, the ASX 200 is slightly higher in early trading, gaining 0.18%.

AGL ramps up South Australian green hydrogen plan

AGL has flagged more green hydrogen plans, this time in South Australia. The company is looking into the feasibility of creating a renewable hydrogen hub and producing hydrogen-derived products at the site of its Torrens Island gas-fired power station.

The feasibility study will consider producing the energy commodity to serve both domestic and export markets. It will also map the project's key operational and commercial plans and outline the development of a production timeline.  

AGL chief operating officer Markus Brokhof commented:

Whether it's the early potential for co-firing hydrogen with our existing gas engines at Barker Inlet Power Station, the creation of 100% green gas networks for industry, or the development of low-carbon chemicals and future fuels right through to the production of green hydrogen for export, this feasibility study will explore it all.

The study will also benefit from input from key industry members across multiple sectors. They include the ASX 200's Brickworks Limited (ASX: BKW) and Adbri Ltd (ASX: ABC). Port operator Flinders Ports and other energy and renewables powerhouses such as Osaka Gas Australia and Spark Renewables will also be involved.

"With the strong support of large industry partners, AGL's vision is to establish a clean hydrogen industry in Adelaide, and support the creation of an energy efficient, low-carbon ecosystem and circular economy," Brokhof said.

"Torrens Island is perfectly positioned as a future energy hub with strong grid connectivity, access to South Australia's growing renewable energy portfolio and firming technology, nearby industry and potential large green hydrogen users, a highly skilled local workforce, and connections to Port Adelaide with avenues for export."

AGL share price snapshot

The AGL share price has outperformed the ASX 200 through 2022 so far.

The stock has gained 37% since the start of this year. Meanwhile, the index has slumped around 13%.

The AGL share price is also 9% lower than it was this time last year. In that time, the ASX 200 has dropped 12%.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Brickworks. The Motley Fool Australia has positions in and has recommended Brickworks. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Energy Shares

A bearded man holds both arms up diagonally and points with his index fingers to the sky with a thrilled look on his face over these rising Tassal share price
Energy Shares

Why is the Beach Energy share price racing higher on Thursday?

This energy producer delivered some big news this afternoon.

Read more »

A person is weighed down by a huge stack of coins, they have received a big dividend payout.
Energy Shares

Own Ampol shares? Get ready for your monster dividend payment

Ampol investors are about to enjoy their largest-ever dividend.

Read more »

A man sees some good news on his phone and gives a little cheer.
Energy Shares

Buy Woodside shares for a 20% gain and 4.5% dividend yield

Morgans thinks investors could get big returns from this energy giant.

Read more »

Woman holding $50 notes and smiling.
Dividend Investing

A 36% yield from this ASX dividend share? Here's how these forward-looking investors made it happen

Some savvy passive income investors are earning a 36% yield from this ASX dividend star.

Read more »

A Paladin Energy miner wearing a hard hat and protective gear stands in front of a large mining truck and smiles to the camera.
Energy Shares

Uranium is set to boom, and this is the 'premium' ASX stock to buy

Shaw and Partners' Jed Richards reckons these are the shares to buy for the nuclear energy theme.

Read more »

Happy coal miner.
Energy Shares

How these ASX 200 energy shares could unexpectedly burn brighter

ASX 200 energy shares are facing rising global demand for their products.

Read more »

Worker inspecting oil and gas pipeline.
Energy Shares

ASX energy shares losing charge amid fresh warnings of gas supply shortfalls

Many energy commodity prices fell overnight and this is hitting ASX energy shares today.

Read more »

A miner stands in front oh an excavator at a mine site
Energy Shares

'We have reached a bottom': 5 ASX uranium shares leaping higher this week

ASX uranium stocks have enjoyed explosive share price growth over the past year.

Read more »