Labor accused of ‘humiliating’ gas switch

Georgie Moore and Dominic Giannini | February 1, 2022

Labor has been accused of a “humiliating backflip” after agreeing to support a new NSW Hunter Valley gas plant as long as it runs entirely on green hydrogen by 2030.

The policy change – which Labor defends as helping ensure jobs, reliable and affordable power – comes as the opposition attempts to defend its seats of Paterson, where the plant is located, and Hunter, where Joel Fitzgibbon is retiring.

Energy Minister Angus Taylor said it was a “humiliating backflip”.

Opposition Leader Anthony Albanese has agreed to back the government-owned Snowy Hydro Kurri Kurri proposal after his party earlier argued it was unnecessary.

Now, Labor wants the $600 million plant to be powered by 30 per cent green hydrogen, generated by renewables, initially.

This would transition to 100 per cent green hydrogen by the end of the decade.

“Now, the cheapest form of clean energy is through renewables,” Mr Albanese told reporters on Tuesday.

“The costs of producing green hydrogen will fall.”

Labor’s climate spokesman Chris Bowen said the 2023 timetable for Kurri Kurri, which was signed off by the NSW government in December, would remain the same.

“Snowy Hydro’s own documents say the plant could do 30 per cent hydrogen, but they’re not planning to,” Mr Bowen said.

“We’ll take up the government’s own documents which say 30 per cent hydrogen immediately is possible and we’ll ensure, working positively with Snowy Hydro, that will be the case.”

An additional equity injection of $700 million has also been flagged for the project.

Mr Taylor did not directly answer when asked when the government thought it would be viable for Kurri Kurri to run entirely on green hydrogen.

“We will take all forms of hydrogen that are clean, blue or green,” he told reporters in Canberra.

Blue hydrogen is produced using natural gas, with CO2 captured and stored underground.

Mr Taylor expected blue hydrogen would likely remain cheaper than green hydrogen for some time. 

“As we’re getting down towards those lower levels, we can feed more (green hydrogen) in and maintain the economics of the generator,” he said.

“There’s technical feasibility and getting some hydrogen into the generator is technically feasible. 

“There’s economic feasibility which is who’s going pay for it.”

The federal government has previously said Kurri Kurri would create up to 600 construction jobs and 1200 indirect jobs. 

But just 10 jobs would be required once the plant is operational.