The South Australian government and the owner of the Whyalla Steelworks will explore a deal for the latter to use hydrogen offtake from a publicly funded power station.
The government and GFG Alliance, which owns the steelworks, have signed an agreement to explore commercial supply from the Port Bonython power station near Whyalla, due to open in 2026.
The government is spending $593 million on its hydrogen plan to lead the shift to clean energy, export to the rest of the world and stimulate the state economy.
The steelworks is already on the path to phasing out coal-based steelmaking and reducing carbon dioxide emissions.
Premier Peter Malinauskas was pleased to have interest in a supply deal.
"Global demand for green steel is already rising and is forecast to surge in the coming years," he said.
"Whyalla will be perfectly positioned to capitalise on this opportunity."
Energy Minister Tom Koutsantonis said GFG's investment in a green transformation program was exactly the type of project the government wanted to make possible through its hydrogen plan.
The taxpayer-funded 200-megawatt power station will use South Australia's excess renewable energy to produce renewable hydrogen. Hydrogen will be kept in a 3600-tonne storage facility and used to fuel the power station, as well as be available to industry.
The government also on Sunday announced the preferred supplier of turbines at the power station.
US company GE Vernova will provide four turbine generators. These are expected to run on renewable hydrogen, generated on-site by 250-megawatt electrolysers.
