The Lachlan shire is set to take steps towards a greener future thanks to a low-cost green hydrogen project being set up in Lake Cargelligo.

The project to develop low-cost green hydrogen is part of a partnership between Graphite Energy - which has an energy storage centre in Lake Cargelligo - Toshiba International Corporation and MGA Thermal.

Graphite Energy CEO Peter Lemmich said the project would see the development of a hydrogen production system, co-developed with Toshiba International Corporation, with integrated thermal energy storage at the Lake Cargelligo facility.

“This project is the first stage of our redevelopment of the Lake Cargelligo facility, where we will be developing a Low Emissions Technology Precinct that will support the sustainable energy transition for agriculture, mining and industry, providing positive impacts and opportunities for Lake Cargelligo and other regional communities,” Mr Lemmich said.

According to Graphite Energy Chief Operating Officer Byron Ross, this thermal energy, taken from renewable sources, like wind and solar farms, is decarbonised and converted into reliable process heat.

"The power for the pilot will be generated by an on-site PV (solar) plant co-located with our existing facility," Mr Ross said.

This is not the first time Graphite Energy has been involved in renewables - the previous custodians of the company were involved with developing a concentrated solar power demonstration plant - but thermal energy storage has been the primary focus over the last four to five years.

Mr Lemmich and Mr Ross were also pleased to have financial backing from the federal government which recently announced $9.8 million in funding for the project.

Federal Member for Parkes Mark Coulton said this funding, which was awarded to Toshiba International Corporation, would provide a huge economic boost to both Graphite Energy as well as the Lake Cargelligo community as a whole.

“It’s fantastic to see great local manufacturers like Graphite Energy here in Lake Cargelligo growing, creating jobs, and taking more of their outstanding product to the world,” Mr Coulton said.

“This grant shores up Graphite Energy’s operations at Lake Cargelligo, enabling it to expand its production capability and employ more staff in order to participate in the emerging green hydrogen market.”

Mr Ross said the funding was not make or break for the hydrogen project or the expansion of their manufacturing capabilities in Lake Cargelligo but it did fast-track their development.

"The government has low-cost green hydrogen targets and this technology, combined with our storage is how they can be achieved," Mr Ross said.

The hydrogen project will also help enable other projects they have planned for the site, such as the feasibility for an integrated greenhouse at the facility to provide a potential model for the diversification of agriculture in the region.

Mr Ross said he thought Graphite Energy already had pretty solid support and engagement with the local Lake Cargelligo community and was looking forward to seeing this develop further.

"The importance of this project cannot be overstated - it will provide local employment opportunities as well as opportunities for capital works and expenditure in the region," he said.

"It involves the building of a fabrication and assembly hall at the site to produce these energy storage systems.

"With the announcement of the grant, we're looking to start preliminary works in January of next year which will probably take two and a half to three years overall to complete."

The Lachlan Shire Council has also expressed excitement about seeing the site redeveloped and utilised again.

While council General Manager Greg Tory said he had received little information about the project up until this point, a project of this scale would undoubtedly deliver local employment opportunities and bring specialists into the area.

"We're very excited about the project - it sits with council's ethos and aspirations of improving our sustainability," Mr Tory said.

"We are looking forward to receiving more information and would welcome the opportunity to be a part of the development."

According to Mr Ross, local employment is a high priority for the company, for both the contract in building the site as well as staff to help run it, as was engaging with the local council.