Labor says it will spend as much as an additional $700m on a contentious new Snowy Hydro energy plant within the Hunter Valley to equip it to run on inexperienced hydrogen made with renewable vitality as an alternative of a fossil gas.
Talking within the NSW city of Kurri Kurri on Tuesday, Anthony Albanese mentioned if Labor received the upcoming federal election it will make sure the publicly funded gas-fired plant introduced by the Morrison authorities final Might might run with 30% inexperienced hydrogen blended in as soon as it began operation subsequent yr.
The opposition chief mentioned the Kurri Kurri plant would run totally on hydrogen “as quickly as doable”, with a purpose of 2030, below a plan that may take the Coalition’s “flawed strategy and make it work”.
Labor’s local weather change and vitality spokesperson, Chris Bowen, mentioned the get together would allocate as much as $700m in further fairness funding to Snowy Hydro, lifting the potential whole price from $600m to $1.3bn.
He mentioned Snowy Hydro paperwork indicated the 660MW plant might run 30% on hydrogen instantly, however this was not within the authorities’s plans. “We’ll guarantee, working positively with Snowy Hydro, that would be the case,” Bowen mentioned.
Angus Taylor, the vitality and emissions discount minister, mentioned the opposition’s plan was “economically incoherent”, and accused it of a “humiliating backflip” on the undertaking aimed toward shoring up help within the Hunter Valley, notably within the Labor-held seats of Paterson and Hunter.
Taylor mentioned it will not but be technically possible to run the plant on hydrogen by 2030, and that the federal government’s purpose was to first assist convey down the price of the gas. He wouldn't touch upon when the plant would run on hydrogen below the Coalition. “There’s technical feasibility – and getting some hydrogen into the generator is technically possible – (and) there’s financial feasibility, which is: who’s going to pay for it?”
Albanese mentioned Labor’s pledge would guarantee a safe electrical energy provide whereas making the plant according to a shift to web zero emissions by 2050. “I see the Hunter as probably a inexperienced hydrogen powerhouse for Australia and the world. Not simply producing it right here, however exporting it internationally,” he mentioned.
The Kurri Kurri plant was introduced as a part of what the Morrison authorities has referred to as a “gas-fired restoration” from the pandemic. It will be a “peaking” plant, turned on solely often when wanted at instances of excessive demand and to fill gaps available in the market. Snowy Hydro expects it's going to run at 2% of its full capability yearly, and to make use of about 10 individuals as soon as operational.
Taylor has argued the Kurri Kurri plant is wanted to keep away from a major enhance in wholesale electrical energy costs when the Liddell coal-fired plant shuts in 2023, however analysts have mentioned it's not wanted to take care of electrical energy provide. Kerry Schott, the previous head of the Vitality Safety Board, final yr mentioned a gasoline plant within the Hunter Valley didn't “stack up” commercially given there have been cheaper and cleaner alternate options in growth.
Labor argues operating the plant on hydrogen will make it economically viable as will probably be in use longer than gasoline, which releases important emissions. It factors to the billionaire Andrew Forrest’s proposal to construct a 660MW gas-hydrogen generator at Port Kembla at an estimated price of $1.3bn, together with $30m in federal funding to assist make it hydrogen appropriate. Forrest’s firm, Squadron Vitality, has mentioned the plant will probably be able to operating on 50% inexperienced hydrogen when first turned on, with a purpose of accelerating that to 100% by 2030.
Debate over hydrogen in energy technology
However analysts have questioned whether or not hydrogen will ever be economically aggressive as a gas to generate electrical energy. Michael Liebreich, the founding father of Bloomberg New Vitality Finance, ranked it as among the many least viable seemingly makes use of of hydrogen.
Tony Wooden, vitality program director with the Grattan Institute, mentioned the Kurri Kurri plant was by no means crucial to make sure the electrical energy provide as soon as the Liddell coal plant closed as claimed, and was prone to deter personal funding, however Labor’s pledge was pragmatic given contracts have been prone to be signed earlier than the federal election, anticipated in Might.
He mentioned shifting the plant from gasoline to hydrogen wouldn't scale back emissions by a lot given the plant would solely run when wanted and, relying on how hydrogen prices developed, it could possibly be tough for a authorities to get a return on extra funding of as much as $700m. “I believe whether or not this can be a good use of public funding is one thing they would want to consider in authorities,” Wooden mentioned.
The Greens chief Adam Bandt mentioned even with a non-binding pledge to make use of hydrogen the undertaking remained a “horrible concept”. “Gasoline is as soiled as coal. This energy plant is Scott Morrison’s Malicious program for extra methane gasoline, and now Labor is backing it too,” he mentioned.
‘Cynical political choice’
Bruce Robertson, a gasoline market analyst on the Institute for Vitality Economics and Monetary Evaluation, mentioned Labor had made a “cynical political choice that isn't based mostly on economics or the supply of electrical energy to the Australian individuals on the most cost-effective doable price”.
“This undertaking is poorly positioned on a gasoline line that can't even provide it with enough gasoline and is now proposed to be powered by hydrogen, a know-how that’s unproven and whose prices are unknown,” he mentioned. “Make no mistake this can be a choice based mostly purely on politics and isn't in the most effective pursuits of the Australian individuals.”
Fiona Lee, from the Gasoline Free Hunter Alliance, mentioned “not a single cent of public cash” must be spent on a undertaking utilizing fossil fuels. “Any energy station that burns extra fossil fuels like gasoline is simply worsening local weather change,” she mentioned.
The backdrop to Labor’s announcement is the Nationwide get together focusing on Labor-held seats within the Hunter Valley, hoping to recruit voters disaffected by Labor’s extra formidable local weather change commitments.
Retiring Labor veteran Joel Fitzgibbon, who suffered a major voter backlash in his Hunter citizens within the 2019 election, has spent a lot of this time period warning Labor will lose one other election if it pursues formidable local weather commitments on the expense of regional jobs in conventional industries.
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