South Australia's renewable technology fund has backed a plan for a hydrogen plant at Port Lincoln.

Hydrogen Utility (H2U) has proposed a $117.5 million facility that would use renewable energy to power a 15-megawatt electrolyser that creates hydrogen fuel.

The plans also include a 10-megawatt hydrogen-fuelled turbine and a 5-megawatt hydrogen fuel cell to supply electricity to the grid.

The company has received a $4.7 million grant and a $7.5 million loan from the SA renewables fund.

Hydrogen Utility chief executive Attilio Pigneri said the project aimed to demonstrate the huge potential of hydrogen production.

“It will provide balancing services to the national transmission grid [and] fast frequency response support to new solar plants under development on the Eyre Peninsula,” he said.

The site would also host an ammonia production facility for fertiliser production to help the farming and aquaculture sectors.

Dr Pigneri said the plant could export hydrogen to the Asia-Pacific region.

Japanese and South Korean car makers are both preparing to release a range of hydrogen fuel cell vehicles.

By 2020, Japan plans to have 40,000 hydrogen fuel cell cars on the road and 1.4 million hydrogen fuel cells.

Energy Minister Tom Koutsantonis said domestic storage and consumption of hydrogen is being planned.