Remarkable photos expose folly of the location of Snowy’s Hunter gas power plant 

Question: Can you figure out which energy project is photographed above and what is shown?

Answer: The photograph is of Snowy Hydro’s Hunter Gas Power Station Project (HPP) under construction at Kurri Kurri, NSW, showing the massive gas storage in the foreground and the 660 megawatt power station in the distance.

If you look closely at the two cleared paddocks, each about a kilometre in length, and ignore the destroyed flora and fauna, you will spot rows and rows of pipes laid end-to-end ready for welding together. 

In all there are 2,058 high-strength steel pipes – 12 metres long, 1.07 metres diameter, and 30 millimetres thick. Plus there are more than 50 half-circle segments to connect the ends of adjacent rows. 

When welded together and buried the pipes will form a 24 kilometre back-and-forth pipeline, capable of storing 70 terajoules of gas. 

The next photo shows the pipes stockpiled before placement and the following photo shows a closer view to better comprehend the scale of the storage.

The 24 kilometre storage labyrinth is just part of the gas supply infrastructure needed for HPP. Also, a 21 kilometre long, 360 millimetre diameter lateral is being built to transport gas to the storage and power station from near the end of the Sydney–Newcastle Gas Pipeline (SNGP). APA Group is constructing the lateral and storage under a 30-year agreement with Snowy Hydro.

Map showing the Sydney–Newcastle gas pipe line, Colongra PS and HPP (Kurri Kurri)

The photos were taken a year ago by Newcastle photographer, Les Morgan, and only recently came to my notice. 

I am unaware of any photos of the storage being published by Snowy Hydro or APA, which seems a bit odd, given the opportunity to trumpet the unique design and scale of this massive project – this will be Australia’s largest gas pipeline storage by far, unlikely to ever be exceeded.

Possibly the lack of publicity has something to do with not wishing to draw attention to the need for such massive infrastructure in the first place, which stems from the folly of building a gas power station at a location without an adequate gas supply.

So what is the cost of the gas lateral and storage?

Snowy Hydro’s initial estimate was $100 million (Senate Estimates October 2021). Five months later APA’s Environmental Impact Statement estimated the cost to be $264 million. That figure blew out to $450 million when APA made its final investment decision in November 2023. 

No doubt the cost to Snowy Hydro will be hundreds of millions more when APA includes the inevitable cost overruns, its profit margin, and operating and maintenance (O&M) costs over the 30-year service agreement. The O&M costs will be significant given the need to compress gas from the lateral (6.9 megapascal) to the storage pipeline (15.3 MPa). 

But the folly goes well beyond the enormous cost of the gas lateral and storage.

Despite such an unprecedented storage, the 70 terajoules of gas can only power HPP’s two turbines for 10 hours at full output (assuming the storage started full). 

Then, when the storage is emptied it takes more than a day to refill. Crucially this is subject to there being sufficient gas available to purchase and transport via the SNGP, which often faces supply constraints due to its small diameter (508 millimetres). 

When HPP was being mooted AEMO cautioned that the SNGP “is not considered to be a transmission pipeline, but is a distribution pipeline. Given Newcastle proposals for a new LNG import terminal, a new gas power generator [i.e. HPP] or the Queensland-Hunter Gas Pipeline, this pipeline may need expansion or even duplication”.

To add to the gas availability constraints, Snowy Hydro’s nearby Colongra Gas Power Station (667 MW) also draws its gas from the SNGP. So, when it operates in tandem with HPP it will be trying to refill at the same time. By the way, Colongra’s storage pipeline holds only 40 terajoules, runs out after just 5 hours at full output, and takes a day to refill (again, provided there is gas available)!

To add to the woes of HPP, Colongra is closer to Sydney and hence will have first call on available gas.

Why build a second gas power station beyond the end of the skinny SNGP that has been constrained almost since its completion in 1982?

HPP (and Colongra) will be able to run on diesel as a backup, but that is very expensive, highly polluting, reduces HPP’s output to 566 MW, and is limited by storage tank volumes (about a day at full output, though replenishable).

The fundamental reason for building a gas power station is to provide dispatchable, on-demand energy 24/7 from gas.

Neither of Snowy Hydro’s NSW gas power stations can do this.

Recently I estimated the all-up cost of HPP to now be well over $2 billion, with the gas lateral and storage being a significant component. The final cost could end up as much as four times the $600 million estimate provided by the Morrison government when it announced construction of HPP in May 2021 to plug a supposed supply gap when the Liddell Power Station closed. Liddell closed in April 2023, nearly two years ago.

HPP’s cost is now ten times the $234 million Snowy Hydro paid to purchase the identically sized Colongra Power Station in 2015 from the NSW Government. Either Colongra was an absolute steal (it wasn’t) or HPP is ridiculously overpriced.

Why spend more than $2 billion of taxpayer’s money on a power station that can only run on gas for 10 hours and then takes a day or more to refill, provided gas is available from the heavily constrained SNGP; can never run on hydrogen (Snowy Hydro instructed APA to not build the storage to be capable of storing hydrogen because it “would be uneconomic”); will be emitting greenhouse gases through to and potentially beyond 2050; will be soundly outcompeted by cheaper and nimbler batteries; and will never pay for itself?

There are other locations in NSW where a 660 MW gas power station could have been built for a billion dollars or so less than HPP, and run 24/7.

These remarkable photos, whilst spectacularly recording a unique and massive engineering project under construction, also reinforce the folly of the Kurri Kurri location and again prompt the question as to why it was chosen?