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The New South Wales Government has announced a hydrogen strategy that offers $3 billion in incentives and aims to establish the state as a clean energy superpower.

The incentives are set to halve the cost of green hydrogen production in the state, and include a 90 per cent exemption to network charges for electrolysers that connect to parts of the electricity network with spare capacity.

The strategy also aims to attract $80 million in investment from overseas markets, which have shown a significant increase in hydrogen demand.

New South Wales Premier, Dominic Perrottet, said hydrogen was an opportunity to drive new investment and secure jobs.

“Our major trading partners see hydrogen as part of their energy future. This state has the skills, infrastructure and renewable energy resources to compete globally in this new industry,” Mr Perrottet said.

Hydrogen to boost economy

New South Wales Treasurer and Energy Minister, Matt Kean, said the strategy is forecast to increase the size of the state’s economy by more than $600 million by 2030.

“Hydrogen will not only help the state halve our emissions by 2030 and get to net zero by 2050, it will create new opportunities for our heavy industry, and an economic bonanza of investment and jobs,” Mr Kean said.

The strategy details plans to invest $70 million in hydrogen hubs in the Illawarra and Hunter regions, and outlines plans for a hydrogen refuelling network across key strategic freight routes.

New South Wales Deputy Premier and Minister for Regional New South Wales, Paul Toole, said hydrogen was a huge opportunity for the state’s regional areas.

“Places like Parkes, the Illawarra, and the Upper Hunter are uniquely placed to take advantage of these opportunities, with existing supply lines, access to transport links and a skilled workforce ready to make regional New South Wales a leader in hydrogen technology,” Mr Toole said.

A further $78 million will fund the creation of a foundational hydrogen offtake at the new Tallawara B power station.

The strategy also sets out New South Wales’ goal of producing 110,000 tonnes of green hydrogen per annum from 700MW of electrolyser capacity for under $2.80 per kg (a cost reduction of $5.80 per kg) by 2030.

Industry backs strategy

Managing Director of APA, Rob Wheals, said the energy infrastructure provider looks forward to unlocking New South Wales’ hydrogen potential. 

“It is absolutely clear that Australia and New South Wales have a natural competitive advantage in hydrogen,” Mr Wheals said.

“And with billions of dollars already invested in gas infrastructure across the country, it makes sense to look at ways to use our existing energy infrastructure to support the state’s transition to a low carbon future.”

Jemena’s Executive General Manager of Networks, Shaun Reardon, said, “We know green hydrogen has a central role to play in the decarbonisation of the New South Wales gas distribution network, and that it will prove crucial in powering those industries that can’t be easily electrified, such as manufacturing.”

CEO of the Australian Hydrogen Council, Dr Fiona Simon also welcomed the announcement of support for the industry. 

“The New South Wales Government has committed to prioritising heavy transport, trucks and refuelling infrastructure; heavy transport is a key sector that needs hydrogen to decarbonise, replacing petrol and diesel with hydrogen,” Dr Simon said.

“Plans and funding like this will mean Australia should not miss the boat on international opportunities and instead, will be well positioned to be a leading producer and user of hydrogen in Australia and globally.

“This kind of strategy will draw through huge amounts of investment needed to secure local jobs of the future, from now.”

Policy settings key

The Australian Workers’ Union (AWU) National Secretary, Daniel Walton, said that the immediate jobs potential of hydrogen was obvious, but Australia’s natural gas industry offered a salient warning to the government and voters.

“Australia is one of the most gas-rich nations in the world, but instead of using that wealth to provide affordable energy to our manufacturers, we’ve given multinationals a no-strings-attached license to pump it offshore to power jobs overseas,” Mr Walton said.

“There is potential for the mistake to be repeated with hydrogen if we don’t get our policy settings right. 

“We also need a hydrogen reservation policy so a portion of the hydrogen we produce in this country is set aside to sell to Australian factories providing Australian jobs. 

“We can become a renewable energy superpower, but we should be using that strength to help Australian jobs and Australian communities first and foremost.”

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1 Comment
  1. David Sheehan 2 days ago

    interesting that Mr Kean hopes to produce hydrogen at $2.80/kg yet the Australian government quotes an aim at under$2.00/kg as priority stretch goal. You may be interested to know that Jack Haldane in a paper called Daedelus,or,science of the future projected that hydrogen production along with Solar and wind production were very probable replacements for oil and coal . This was Feb 4.1923 ! Should you wish to look quickly at this it is I think his 4th proposition after the section on a stable industrial society.

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