Premier backs hydrogen power, even if investors don’t

Hydrogen power scares off private infrastructure investors, but Premier Peter Malinauskas still says it’s the way to go.

The state government is determined to press ahead with its proposed $600m hydrogen plant at Whyalla, despite infrastructure investors ranking it with nuclear power as two of the least attractive renewable energy assets.

Government intervention in the energy market also made 40 per cent of private investors less likely to participate, a new report from Infrastructure Partnerships Australia revealed.

Concept art for the world's biggest hydrogen production facility, power plant and storage planned for Whyalla. Picture: Supplied

The government has partnered with ATCO Australia, part of a global group that also operates Osborne Power Station, and BOC Linde, a subsidiary of one of the world’s leading industrial gases and engineering companies, to deliver its hydrogen jobs plan.

“They are private companies who are building the hydrogen jobs plan,” Premier Peter Malinauskas said on Wednesday.

“We are now in early contractor engagement with ATCO and BOC Linde to build the hydrogen plant, so they are private-sector players and we looked at their expertise to build that facility.”

Concept artwork of the world's biggest hydrogen production facility, power plant and storage planned for Whyalla. Picture: Supplied

In the new Australian Infrastructure Investment Monitor Report, investors said battery/short-duration storage assets were the most attractive renewable energy infrastructure asset.

More than half also selected pumped hydro/long-duration storage projects as a preferred class for investment.

The government also has an agreement with SA infrastructure company EPIC Energy to develop an integrated pipeline and hydrogen storage solution.

Mr Malinauskas was also “unapologetic” about the government re-entering the electricity market with the hydrogen production, power plant and storage facility.

“In terms of the electricity it generates, it does dispatch it into the South Australian market with the view of reducing wholesale prices. We’re unapologetic about that,” he said.

“As a government we have partnered with private industry in a way that, really, state governments shouldn’t have to, considering the way that the market had been set up.

“But we’ve been very willing to engage with private industry, as we have at Torrens Island, to see gas-fired power stations continue to operate in our state, to see stability within the grid.”

Mr Malinauskas said he was keen to partner with the private sector and “indulge the role the market has to play”.

“But as a government we are not going to sit on our hands, either, where we see market failure.”

Meanwhile, Greens energy spokesman Robert Simms said Labor’s hydrogen bill provided a “pathway for dirty blue hydrogen”.

One Nation’s Sarah Game and SA-Best sided with Labor to block the Greens’ push for a parliamentary inquiry.

“I fear there is some gaslighting happening here,” Mr Simms said.

“After all, blue hydrogen is created using the extraction of fossil fuels in the form of methane gas.”