South Australia’s Liberal government unveiled the key partners in its proposed $13 billion hydrogen hub at Port Bonython, as the state prepares for an election this Saturday that pollsters predict will be too close to call.
The Marshall government’s partners include Fortescue Future Industries, Origin Energy, Santos, and H2U, as well as foreign firms such as Eneos, Chiyoda, Mitsubishi, and AMP Energy.
“The exceptional position of Port Bonython, South Australia’s world-class renewable energy resources, and the Marshall Government’s $67 million strategic investment will attract billions of dollars in private investment,” Premier Steven Marshall said in a statement.
“Global investor interest in the Port Bonython Hydrogen Hub has the potential to transform South Australia into a world leader in renewable energy exports over the next decade.”
The announcement comes only one day before the state election, which political observers believe is still up in the air, despite the fact that betting firms such as Sportsbet are offering odds of $1.45 for a Labor majority, $2.60 for the Liberals to keep power, and $4.75 for a Liberal majority.
The Liberal government – which came to power in 2018 following 16 years of Labor rule – is already in minority, having lost several former party members to the crossbench.
The timing of the hydrogen announcement is significant because it appears to be the primary source of disagreement between the two major parties on energy concerns during an election campaign that has been virtually solely focused on health and covid-19 issues.
Labor boasted last week about its plan to develop a $592 million government-funded hydrogen hub in Whyalla, which would include a 250MW electrolyser and a 200MW hydrogen-fueled power station. According to the company, this will serve as a catalyst for $20 billion in future hydrogen investment.
Labor’s energy spokesman Tom Koutsantonis told RenewEconomy that it was critical for governments to jump-start innovative technology in order to demonstrate what is possible and to encourage private investment.
“The only way to increase renewable energy exports is through the development of hydrogen. It reduces carbon emissions, promotes electrification, has the ability to store fuels, and has industrial applications such as green steel and glass manufacture.
“We were caned for supporting the Hornsdale battery, but it established the technology’s viability on a large scale. That is my thesis on hydrogen; the only way to accomplish this is by the establishment of a large-scale government generator and the construction of large electrolysers.”
The Liberals believe Labor’s plan is inefficient, will likely cost twice as much, and that it is more prudent to give large-scale facilities like Port Bonython to entice private investment with the assistance of modest government money.
The list of partners indicated for Port Bonython should come as no surprise, considering Santos’ strong position in the local industry, FFI’s goal to be everywhere, and AMP Energy’s previously announced aspirations to be substantially involved. Perhaps one surprise is the absence of Neoen.
South Australia has established itself as a global pioneer in the shift of a gigawatt-scale grid away from fossil fuels and toward wind, solar, and storage.
It has obtained 64% of its local needs from wind and solar in the last year, and the Liberals have proclaimed their intention to reach “net 100 percent renewables” by 2030, and to export renewable energy beyond that.
The 100% aim is expected to be met within a few years, especially with the addition of the new transmission link to NSW.
Koutsantonis told RenewEconomy this week that he was dissatisfied by the low number of new wind farms linked to the grid in the four years since Labor lost power.
And, while he maintained his support for the new transmission link to NSW, he expressed reservations about the amount of extra capacity it would enable in light of the volume of projects proposed on the NSW side of the border.
“You are not going to get a $10 billion investment in wind and solar in South Australia when (NSW energy minister) Matt Kean is putting others to disgrace. Why would you select South Australia to establish a wind farm or a solar array?”
Meanwhile, the Liberals claim that the $13 billion investment in hydrogen, which is also tied to a potential deal with the Port of Rotterdam, is massive, with the goal of producing up to 1.8 million tonnes of hydrogen per year by 2030.
“By 2030, the projects may support up to three gigawatts of electrolysis, which would be sufficient to meet South Australia’s present peak demand, and over six gigawatts of new renewable energy,” Marshall said in a statement Friday.
“This is nearly twice the amount of renewable energy installed in South Australia. Additionally, all projects have considered future expansions beyond 2030.”