The West Australian government will investigate setting a target for the supply of energy fuelled by hydrogen.
This idea would set a target for retailers in the South West Interconnected System, WA's main electricity grid, to procure a certain percentage of electricity produced by renewable hydrogen.
The government believes this would create a local market to support emerging hydrogen projects and improve grid stability.
It will work with industry to consider options for implementing the target, including electricity consumers, hydrogen producers, related industries and the wider community.
Engaging industry and other stakeholders will be crucial to maximising the benefits to WA and supporting the long-term growth of our local renewable hydrogen industry, and maximising the integration of renewable energy in WA's main electricity grid.
"Renewable hydrogen will play an important role in our energy mix as we move to a lower carbon future in line with the Western Australian Climate Policy," Energy Minister Bill Johnston said.
"A renewable hydrogen target may also prepare Western Australia to transition from natural gas electricity turbines to hydrogen turbines to stabilise our electricity grid," he said.