WATER-based energy will forge a new future for Warrnambool following a federal government investment.
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Federal Education Minister Dan Tehan announced $2 million for a hydrogen energy precinct at the Deakin University Warrnambool campus on Monday.
The money will kick-start plans for Warrnambool to lead the way in having Australia's first hydrogen research and industry testing site, on 4.5 hectares at the campus.
That site, which requires additional funding, could include a refuelling station for buses and trucks accessible from the Princes Highway, support for fuel-cell manufacturing, gas-pipeline testing and safety and standards protocol development.
"It will be a state-of-the-art hydrogen precinct, which will be focused on heavy vehicles in particular and include research into cells and a station here where vehicles can come and refuel," Mr Tehan said.
He said south-west Victoria was selected for the project because of its links with haulage routes and transport businesses.
"We will be able to lead the way in regional Australia," Mr Tehan said.
The money will cover the establishment costs for the new project, but will not see the new site built, which will ultimately need a further $18 million from government or private-sector sources.
Mr Tehan said the federal government had committed that once the project was up and running it would "look to make a further contribution as well".
"We are looking to get $10 million to start it going and we will see where we need to go from there, but the more we can bring industry partners in the more that lessens the load on government," he said.
Monday's announcement will lead to 12 new jobs based in Warrnambool, while the fully-established precinct will create up to 200 jobs.
South West TAFE has also expressed interest in offering training to meet the site's future workforce needs.
Mr Tehan said he hoped the TAFE's involvement would also attract state government funding.
He said the hydrogen energy would not be made using brown coal.
"My understanding is what will be going on here, is we will be looking at using renewable energy here as part of this precinct," Mr Tehan said.
National truck manufacturer Kenworth and Warrnambool Bus Lines have already expressed interest in fuelling vehicles at the precinct.
Warrnambool Bus Lines managing director Stephen Lucas said the company would look to gain state government assistance to buy about 10 buses that could be fuelled with hydrogen.
"It will be changing our existing vehicles for hydrogen vehicles," Mr Lucas said.
He said he wanted to see the project up and running next year.
"The technology we are using at the moment is diesel, the next technology people have been going towards is battery, we believe philosophically that battery is the wrong move.
"Hydrogen has absolutely no emissions, whereas batteries have all kinds of problems with range."
Deakin University energy director Adrian Panow said Warrnambool was an "enabler" for change in the transport industry.
"It is on a transport corridor between Melbourne, Portland and South Australia," Mr Panow said.
"It is a location that already has a substantial university, it a university on natural gas, it has Warrnambool bus lines."
But Mr Panow said the development of the site was still a way off.
"In projects of this scale you certainly won't see shovels being turned in February, that would be the wrong thing to do, you don't want to start to early, you want to actually plan," he said.
The federal government revealed a national hydrogen strategy in November, aiming to make Australia's hydrogen industry a major player in clean energy by 2030.
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