Labor urged to consider nuclear as it pumps $100m into hydrogen hub

Anthony Albanese has been urged to consider a “plan B” to Labor’s plans for hydrogen to become a key part of its energy mix.

Anthony Albanese visits the Whyalla steelworks.. Picture: NCA NewsWire / David Mariuz

Anthony Albanese has been urged to consider a “plan B” to Labor’s plans for hydrogen to become a key part of its energy mix, with a leading expert warning the cost of the alternative energy source must “come down substantially before it can be used at scale”.

The Prime Minister on ­Monday revealed that a hydrogen hub would be set up in near Whyalla in South Australia through a $100m investment from the state and federal ­governments, in hopes the site would host hydrogen projects worth up to $13bn by the end of the decade.

“You have mines so close to the town of Whyalla, you have a skilled workforce, you have a port facility, you have everything, all put together, to secure a really prosperous future,” Mr Albanese said.

“There is an opportunity that Australia has to be a renewable energy superpower and South Australia has been at the forefront of the transition.”

The funding commitment – which is part of the Regional Hydrogen Hubs program – comes despite concerns over the affordability of producing and transporting the emerging energy source.

Canadian gas giant ATCO scrapped plans for one of the first commercial scale green hydrogen projects in Australia despite funding support from the Australian government, citing transport costs among other barriers to the West Australian project.

The company also put a proposed pumped hydrogen project near Bathurst in NSW on hold earlier this year.

Grattan Institute energy program director Tony Wood said the government needed an alternative to its “plan A”, given ­hydrogen “still needs to come down in cost substantially before it can be used at scale”.

“We don’t have enough certainty about what I call plan A, which is renewables, plus transmission, plus storage, plus some other backups … like hydrogen,” he said.

“Allowing for prospects in nuclear to become a viable addition to our mix, is something we should do … just don’t rule it out.”

Mr Wood said hydrogen was “a little bit ahead of nuclear” in its development, but still urged for the ban on nuclear energy in Australia to be lifted.

“If we remove the ban tomorrow, no one is going to go out and build a nuclear power station in Australia,” he said.

“There are lots of companies in the world and countries who are doing enough work on the technology research, so we don’t need to do that. We just need to keep an eye on it.”

The funding commitment follows other cash injections into hydrogen, including a $70m funding package for a hydrogen hub in Townsville in January, which will be used to produce green hydrogen in the future.

SA Opposition Leader David Speirs said there were “big ­question marks” over the hydrogen hub near Whyalla and raised concern over the cost of the ­project.

The federal Coalition has been pushing for small modular reactors to replace coal-fired power plants and for Australia’s nuclear moratorium to be lifted, but Labor has lashed the idea for lacking economic viability.

Opposition energy spokesman Ted O’Brien said the Coalition had adopted an “all of the above” approach to its climate and energy policy.

“To decarbonise our economy without weakening it requires every option to be on the table,” he said. “All technologies should be embraced, from hydrogen to gas to zero-emissions nuclear energy, and beyond.”