Snowy confirms controversial and costly NSW gas plant will start operations fuelled by diesel

Snowy Hydro has confirmed that its new “fast-start, on demand” hybrid hydrogen and gas plant being developed in the New South Wales Hunter region will start its operational life running on costly and polluting diesel fuel.

Snowy Hydro’s controversial 660MW Kurri Kurri Hunter Power Project, which got its start under the Morrison Coalition government, was kept alive by federal Labor, with the promise of $700 million more in public funding on the condition it was built “hydrogen ready.”

It was soon revealed, however, that the plant will start out using fossil gas only, and that moving to just 15 per cent green hydrogen will be subject to construction delays and lack of availability of the zero emissions fuel.

The project has also come under fire for its costly gas supply and storage challenges, due to its location beyond the end of the Sydney-Newcastle gas trunkline, requiring a 21 kilometre lateral pipeline connection as well as an on-site storage pipeline. 

By the end of 2023, the project’s cost had blown out from $600 million to $930 million – although, according to some estimates, it is likely to soar past $1.5 billion when the full costs of the gas pipeline connection and gas storage are factored in.

It has also become clear that diesel will be a major part of the power plant’s early generation equation – quite a long way from green hydrogen – until gas supply and storage infrastructure can catch up with the rest of the development.

In an update published on Wednesday, the federal government-owned gen-tailer said the Hunter Power Project (HPP), was on track to come online in December, with the start of testing and commissioning phase of one of its two generators on diesel fuel.

“When operating on diesel each unit is capable of generating 283MW,” the project update says. “This is the quickest path to ensuring HPP is available to provide power to the electricity network, which will occur as soon as possible after testing is complete.

“We will sequence the commissioning of the second unit and the introduction of gas. We expect HPP to be fully operational, with both generators able to operate on both fuels, in the few months following the start of testing.

“Snowy Hydro’s investment in the Hunter Power Project (HPP) will play an important role as coal plants close,” the statement continues. 

“With 660 MW of available dispatchable capacity, supported by 34 hours of onsite fuel storage from 70 terajoules (TJ) of gas and 3.6 million litres of diesel, HPP will be capable of enabling approximately 2 gigawatts (GW) of new renewable capacity.”

Critics of the project, however, are not convinced that the Hunter plant will be all that useful to the rapidly changing Australian grid – and whether its huge costs, both financial and environmental, can be justified.

“HPP’s storage will be massive, Australia’s largest, consisting of 24 kilometres of one-metre diameter pipe in a labyrinth arrangement, storing 70 terajoules at high pressure,” energy expert Ted Woodley wrote here last year.

.”Even so, it will only be sufficient to power the turbines for 10 hours at full output. It will then take more than a day to refill, provided of course there is gas available to purchase from the heavily committed trunkline.

“Hence, HPP is incapable of providing dispatchable energy 24/7,” Woodley argues.