Kurri Kurri: The generator on gas rations

The “Pub with no Beer” is part of Australian folk lore. Slim Dusty’s iconic song was based on a poem penned in 1943 by a farmer after he went to his pub in Ingham to discover that American soldiers had drunk dry its war-time beer ration.

Eighty years later, history is about to be repeated in Kurri Kurri. Well, sort of.

This time it’s “The Generator on Gas Rations.” Though psst… it’s a closely guarded secret.

Snowy Hydro is proposing to build a 660MW power station at Kurri Kurri with a ‘gas storage bottle’ that can fuel the turbines for just six hours at full load, and then takes a day to refill.

This gobsmacking limitation has been kept very quiet. There’s no mention on Snowy Hydro’s website, nor in announcements or parliamentary briefings.

The Environmental Impact Statement (EIS) gives the opposite impression, repeatedly extolling the virtues of gas-fuelled generators for “providing dispatchable capacity over days and weeks” and being “particularly well suited to managing prolonged periods of low wind generation, which may last for weeks or months”.

A single sentence in the latest batch of EIS documents, now totalling 1600 pages, reveals the gas-ration secret:

“Sufficient gas will be stored for the Proposal in a part of the gas lateral.  This “gas bottle” will allow the Proposal to operate at full load for six to seven hours on gas, with the gas lateral pipeline to be refilled over one day.”

Even six hours operation every day or so might be a stretch, according to information from the company constructing the lateral pipeline/storage bottle.

Why imply – as Snowy Hydro and federal energy minister Angus Taylor have done -0 that Kurri Kurri can provide dispatchable power over days, weeks and months, when in fact it will run out of gas after a few hours?

Also, setting aside whether a gas power station is a sound decision in the first place, why not select a location where there is ample gas to generate for prolonged periods?

Let’s look at a few other questionable aspects and claims.

Kurri Kurri is lauded for its “fast-start capability” of being able to reach full output within 30 minutes. But this is tortoise-pace compared to the warp speed of batteries, capable of cycling between charging and discharging multiple times a second. Taking half an hour to get up to speed will be practically useless in the recently introduced five-minute settlement market.

According to Snowy Hydro, Kurri Kurri and batteries will complement each other, “competing in different parts of the market” – batteries for short periods and Kurri Kurri for much longer durations.

But it is now evident that Kurri Kurri will be competing with batteries in the same short-term diurnal market, where batteries are dominant.  Kurri Kurri won’t get a look in against a faster, cheaper, non-polluting, zero-emissions competitor.

The latest claim is that Kurri Kurri will be “hydrogen-ready”, by being designed to run on a 10-15% hydrogen blend. But running on such a blend is fairly standard for gas turbines.

And, even if a green hydrogen blend is available in the future, Kurri Kurri will still be running on 90% fossil fuels (73% gas, 17% diesel, 10% hydrogen) – hardly ‘hydrogen-ready’ or contributing to net-zero emissions.

Kurri Kurri has no end of critics.

According to energy analysts it’s not needed – there is no supply gap when Liddell closes in 2023. Economists say it won’t lower electricity prices and can’t possibly pay for itself. Energy industry participants say the government shouldn’t intervene in the market nor play favourites with its own company.

The locals say the Hunter Valley doesn’t need another noisy, polluting fossil-fuel power station even with its ten jobs.

Climate scientists and our youth plead that the atmosphere can’t take any more greenhouse gases – Kurri Kurri’s lifetime extends well beyond the net-zero target date of 2050.

And what is the bill for Australian taxpayers?

The EIS estimate is $610 million. But it hasn’t been made clear that this is just for the main equipment, and doesn’t include the lateral pipeline/storage bottle, likely to cost well over $100 million, electrical switchyard, financing and other costs.

Even the $610 million equipment estimate appears low, when compared to the indicative cost for open cycle gas turbines of $1.4 million/MW (Australian Energy Market Operator).  The total cost looks likely to be well over $1 billion when everything is included.

The Victoria Energy Policy Centre Paper ”The Kurri Kurri Power Station: charging taxpayers for hot air”, concluded that “there is at best a tiny market for the sort of service that Kurri Kurri can offer and so it has no prospect of earning anywhere near the revenues needed to recover its outlay”.

Kurri Kurri will be a clone of Snowy Hydro’s nearby 667 MW Colongra power station (five-hour storage bottle, one day refill), purchased in 2015 for $234 million.  How can Snowy Hydro justify spending more than four times that amount on an almost identical station?

Also, won’t the two stations be ‘competitors’, consigning Kurri Kurri to a similar or lower capacity factor than Colongra’s miniscule 0.4%?

Nevertheless, Snowy Hydro is pushing ahead.

At the Senate Estimates hearing in May, Snowy Hydro committed to release the business case “within two months” (i.e. by July 2021).  However, despite the business case not being released and the NSW Government yet to complete its assessment of the EIS, in September Snowy Hydro signed Kurri Kurri’s largest contract for the turbine generators.

Australian taxpayers deserved to see the business case before financial commitments were locked in, as it is their money that is being ‘invested’ in this project.  Full transparency is essential.

Prime Minister Scott Morrison and minister Taylor need to urgently review this project.  Surely they couldn’t have known of its gas rationing and other limitations when they so eagerly forked out a $600 million down-payment.

Australians should not be inflicted with another Snowy White Elephant.

‘The Pub with no Beer’ was just a bit of fun. ‘The Generator on Gas Rations’ makes no sense.

Ted Woodley is a former managing director of GasNet, PowerNet and EnergyAustralia.