A Wollongong-based start-up Hysata is set to begin mass producing the world’s most efficient hydrogen electrolyser technology, claiming it will be the building blocks for the decarbonisation of heavy industry.

On Monday last week, the Australian Renewable Energy Agency (ARENA) announced a $20.9 million grant for Hysata to build its first five-megawatt demonstration plant with a further $3 million from the Queensland government owned Stanwell Corp.

The company will initially build and test the 5MW electrolyser at the Port Kembla facility before shipping it to Queensland where it will operate next to the Stanwell power station.

The Hysata technology has emerged from the ARENA-funded research at the University of Wollongong and claims an “efficiency rate” of 95 per cent – far beyond that of any other electrolyser technology.

Hysata CEO Paul Barrett said this was a significant milestone in Hysata’s plans to rapidly scale its groundbreaking technology needed to accelerate the world’s transition to net zero emissions.

“Hysata has developed a way to do that in a really energy efficient matter, in fact we use 20 per cent less energy than any incumbent electrolyser today,” chief executive Paul Barrett said.

“We look forward to creating more local jobs and strengthening Australia’s sovereign manufacturing capabilities through this project, which will pave the way for Hysata’s scaling to fulfil a multi-billion-dollar pipeline of orders from around the world.”

Hydrogen is seen as the fuel source most viable to become a substitute for the fossil fuels used in hard-to-abate industries such as steelmaking and transport.

An electrolyser produces hydrogen by using electricity to split water, or H2O, into its component parts.

Once the Port Kembla facility is fully operational, the commercial plant will supply about 20 electrolysers per year, or roughly 100 megawatts worth of generation capacity.

In an interview with ABC Illawara, Energy Minister Chris Bowen said it was a “big deal” for Australia’s decarbonisation goals.

“This means driving down the cost of renewable hydrogen, vital to reducing emissions in steelmaking and so much more,” he said.

“This is the biggest economic transformation our country or the world has ever undertaken.”

Hysata leads the way for Australia innovation in renewable energy and is encouraging the Australian government to make further plans in developing and funding green hydrogen projects.

Initial development of the system is currently underway, with the field pilot at Stanwell due to commence in 2025.