Gas project filled with promise, energy minister claims

By Melissa Coade

October 6, 2021

Minister for Energy and Emissions Reduction Angus Taylor.
Minister for Energy and Emissions Reduction Angus Taylor. Source: AAP Image/Dan Himbrechts.

Angus Taylor has touted a new gas-fired power station to be built on the NSW south coast in Port Kembla as the key to driving down electricity prices but the company in charge of building the facility says it is in fact a green hydrogen power station.

The proposed construction of a new terminal and power station by Australian Industrial Power (AIP) has progressed to the ‘final investment decision’ stage with the federal government awarding $30 million to support the early stages of works. 

The owner of AIP, Squadron Energy, welcomed Taylor’s announcement on Tuesday, clarifying that its power station was currently licensed for dual fuel and was on schedule to achieve green hydrogen within three to four years.  

The power station will be designed to take 50 per cent green hydrogen from day one and one hundred per cent green hydrogen by 2030,” Squadron Energy said.

Green hydrogen is the only form of zero carbon energy. Every other type of hydrogen is made from carbon emitting fossil fuels.

Taylor said that the government would continue to work with AIP to assess the project for underwriting support through the Underwriting New Generation Investments (UNGI) program, intended to help lower energy prices across Australia and support reliable supply.

“New gas supply and generation will help re-establish a strong economy and make energy more affordable for families and businesses, while complementing the world-leading levels of renewables in Australia,” the minister said in a statement. 

“Gas supports jobs in our important energy intensive industries that are the lifeblood of our economy and our regions.”

Experts have been widely critical of the federal government’s promise that gas is the solution to Australia’s sustainable energy needs. Chief among the reasons the policy is a dud is because it will be unlikely to pay for itself over the next three decades, energy policy expert Peter Newman said at the time the federal government began heavily spruiking its gas plan in May. 

The former Western Australian Scientist of the Year added that Australia should not regard gas as a transition solution away from fossil fuels, and that the federal government should learn from the experience of the states who had stopped pursuing gas solutions for some years now. 

Taylor on the other hand is sticking with the line that gas will be a ‘critical enabler’ of the Australian economy, arguing that since the federal government started implementing its plan, the manufacturing sector grew to employ more than 1 million people. This proved, he said, that gas delivered for ‘Australian families, businesses and manufacturers’.

“This is what the government’s gas-fired recovery is about – helping Australia bounce back strongly from the COVID-19 recession,” Taylor said.  

Chris Bowen, Labor’s shadow minister for climate change and energy, said Taylor’s mislabelling of the power station as gas-fired tore away the ‘great farce’ of the so-called gas-fired recovery which ‘had not created a single job’.

“You could not read the government and Squadron’s statements, and believe they were the same project,” Bowen said.

“Squadron immediately clarified that it is building a green hydrogen power station.”

The shadow minister went on to say that Scott Morrison’s government was responsible for the loss of 2,700 clean energy jobs — in a sector that was booming in other parts of the world.

Labor will continue to support investment in green hydrogen and other new technologies, and will not move to disallow the $30m that is going to Forrest’s green hydrogen plant,” Bowen said. 

“If Angus Taylor was planning some sort of cunning wedge by pretending a hydrogen plant was actually a gas plant, it has backfired spectacularly. Fantastic, well done Angus.”

Taylor said the new project would provide an import terminal that would become a ‘key source for imported gas to increase supply. He added that the construction project itself would create 850 direct jobs and many more indirect. 

The minister also suggested that the project would address the market volatility risks in NSW because it would support reliable electricity supply. With the Australian Energy Market Operator forecasting that the national electricity market will require 19,000 megawatts of dispatchable capacity, he said gas was crucial to support ‘record growth of renewables’. 

“If the government had spent the last eight years doing their job instead of playing petty politics, perhaps they’d have a climate or energy policy, not a civil war over a net zero policy that doesn’t exist,” Bowen said.

Australian industry and households are focused on seizing the jobs opportunities of the new energy economy, and the government is as usual, only focused on spin and perpetuating climate wars,” Bowen added.


Government opens consultation on gas-fired recovery measures

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