Snowy plays down diesel allowance for Kurri Kurri, but gas pipeline problems persist

Federal government-owned gentailer Snowy Hydro says its controversial Hunter Power Project will run just one of its generators on diesel fuel – and just during the testing and commissioning phase – despite seeking permission to run the plant entirely on diesel in 2025.

The 750MW Kurri Kurri hybrid gas Hunter Power Project, which won $700 million in federal Labor government funding on the promise it would be built “hydrogen ready,” has been getting less and less green by the day.

After clarifying that the plant would start out using fossil gas only, with no clear timeline on when renewable fuel might come into the mix, Snowy has since revealed that diesel will be a major part of the power plant’s early generation equation while gas supply and storage infrastructure catch up with the rest of the development.

The delay comes down to the project’s heavily criticised location beyond the end of the Sydney-Newcastle gas trunkline, which has meant building a 21km lateral gas pipeline connection as well as an on-site storage pipeline to the new power plant.

Last month, Snowy applied to the New South Wales planning department seeking to allow the Hunter Power Project’s (HPP) two gas turbines to operate for up to 1,100 hours on diesel fuel in 2025, more than six times the currently approved limit for diesel and equal to the annual limit for energy generation using fossil gas.

As Renew Economy reported at the time, Snowy said the modification – which could send the plant’s year-one emissions soaring by up to 80% – is needed because the pipeline being built to deliver gas to the plant will not be ready for another year after the generator is commissioned.

But in a statement published on Thursday, Snowy said it expects the gas pipeline, being delivered by APA Group, to be completed in March of next year, and “does not currently expect HPP to operate entirely on diesel” in its first year.

“Hunter Power Project (HPP) is set to begin operations in December 2024 with one generator running on diesel during the testing and commissioning phase,” the statement says.

“The second unit and gas introduction will follow shortly, with full operations expected within a few months. 

“The purpose of the modification is to provide for the current anticipated completion of the gas pipeline to March 2025 plus appropriate program contingency to ensure the power station can still generate energy in the event of any further delays to the gas pipeline or to the project’s commissioning program.”

The statement also stresses that the gas pipeline is being delivered “independent of Snowy Hydro’s delivery of the power station,” and said the planning amendment submitted last month was mostly about “contingency planning” should there be more delays.

“Once fully operational, HPP will primarily run on gas, using diesel as backup. Gas remains crucial for meeting peak demand and supporting Australia’s renewable energy transition,” the update says.