EnergyAustralia gets government money for first “green hydrogen” gas generator

EnergyAustralia has committed to building a 300MW fast-start gas generator in NSW that will combine “green hydrogen” with gas and help fill the market opportunities created by the retirement of the Liddell coal generator.

The $400 million Tallawarra B project has landed funding support from both the NSW state government (up to $78 million) and the federal government (up to $5 million), which are said to be conditional on the hydrogen component being delivered.

The new gas generator will be on line by the summer of 2023/24, after the closure earlier that year of the last of the Liddell coal units, and raises questions about whether the federal government’s Snowy Hydro utility will continue with its own plans for a gas generator at Kurri Kurri, or whether it will opt for a smaller facility.

But the proposal has been swiftly criticised by the Clean Energy Council, which said taxpayer dollars would be better spent on large-scale battery storage, pumped hydro and accelerating transmission upgrades to provide cost-effective, reliable, flexible and low-emissions power.

“The costs of energy storage have declined rapidly in recent years, and it’s now clear that it provides a lower-cost solution for firming low-cost solar and wind energy resources,” said CEO Kane Thornton.

“If private investors are willing to bet on gas over energy storage, that’s a decision for them. But the general public is becoming increasingly uncomfortable seeing their taxes used to prop up more expensive fossil fuel generator.”

The Tallawarra B power station, like most so-called open cycle “peaking plants”, will be located next to the existing Tallawarra A combined cycle gas generator.

It will be deployed to meet periods of high demand, or low renewables output. Such plants are usually rarely used, often running for only 160 hours a year, and usually only operate at very high prices.

EnergyAustralia has committed to using green hydrogen – which it insists will be sourced from wind and solar – at the facility from 2025, two years after it is first opened.

It says it will “offer to buy” at least 200,000 kilos of green hydrogen a year, which will account for around 5 per cent of its output. It could raise this green hydrogen percentage to 60 per cent in later years but that will require  further investment in the turbine technology, and a bigger supply chain of green hydrogen. It says it will also look at using green hydrogen in the existing Tallawarra A generator.