SA Premier Peter Malinauskas pulls plug on $600m hydrogen plant as Anthony Albanese still dreams green
Anthony Albanese insists there is still a future for green hydrogen energy despite Peter Malinauskas axing his flagship plant, with the $593m now set aside to address emerging issues with the Whyalla steelworks.
Anthony Albanese insists there is still a future for green hydrogen energy despite South Australian Premier Peter Malinauskas axing his flagship $593m hydrogen plant amid the financial chaos surrounding the Whyalla steelworks.
As predicted by The Australian two weeks ago, Mr Malinauskas confirmed on Thursday his hydrogen plant had been “deferred” indefinitely, with the $593m now set aside to address emerging issues with the Whyalla steelworks ahead of its hopeful sale to a new operator.
It is the fifth major hydrogen project to fall over in barely a year, following decisions by mining and energy giants Fortescue, Woodside and Origin to abandon hydrogen as experimental and expensive.
The newly elected Queensland LNP government last month scrapped the Central Queensland Hydrogen Project by rejecting a $1bn funding request from state-owned generator Stanwell Corporation to continue with the plan.
With Mr Albanese in Whyalla with Mr Malinauskas to outline a $2bn federal rescue package now that embattled steel giant GFG has been placed in administration, the Prime Minister insisted the shelving of the SA hydrogen plant did not spell the end of hydrogen nationally.
He said the plant had only been shelved in Whyalla because “the circumstances there aren’t what Premier Malinauskas or I are for looking for”.
“What the South Australian government has done is to reallocate some funding, but that doesn’t mean that green hydrogen doesn’t have a future in this country,” Mr Albanese said.
“I believe it clearly does. The whole world is looking at this. We see first mover advantage across a whole range of industries.
“There are a range of companies are certainly looking at doing that investment.”
Asked if it was increasingly obvious that green hydrogen was a “frolic”, Mr Albanese focused instead on Peter Dutton’s nuclear plans.
“The only frolic I can see in Australia is the nuclear frolic, sometime in the 2040s, which will cost $600bn,” he said.
The announcement by Mr Malinauskas is a major breach of one of his biggest campaign promises from his 2022 election win – to build a hydrogen plant with the promise it would drive down prices.
His other major promise, to fix ambulance ramping, also remains unfulfilled.
But despite abandoning the hydrogen project Mr Malinauskas is winning plaudits in SA for ousting GFG after the company and its chairman Sanjeev Gupta racked up debts of more than $300m to unpaid creditors.
Mr Malinauskas is using GFG and its financial woes as his defence for scrapping the hydrogen plant, on which $23m has already been spent for nought to fund the State Office of Hydrogen Power.
Mr Malinauskas said he would continue to run that office in a wound back form in the event that hydrogen could be pursued in the future.
But he said that the hydrogen plant itself had been “deferred” and gave no timeline as to when it might be pursued again, saying its operation would have been dependent on having a viable steelworks.
He put the cause for the failure on GFG and Mr Gupta for failing to deliver promised infrastructure.
“Gupta’s vision was to do was to build an electric arc furnace and a direct reduction iron facility to make green steel,” he said. “To be able to do that you need hydrogen.” “And of course, he hasn’t delivered on that, so I’m not going to build a hydrogen plant with no one to sell the hydrogen to.
“All the money that has been allocated in the budget is being reallocated to be spent here on the ground in Whyalla to set the steelworks up for the future.”
The defence was rubbished by the state opposition, which accused the Premier of using GFG as a smokescreen to mask the fact that hydrogen made no scientific sense in the first place.
Opposition Energy Spokesman and professional engineer Stephen Patterson said the Premier had promised the hydrogen plant would have reduced electricity prices for every business in SA.
He also disputed how the $593m build figure had not changed despite the rate of inflation over the past three years, predicting the real cost of building the plant would have exceeded $1bn and that Labor was looking for an excuse to kill it.
“We have the government using a very major crisis in Whyalla to back away from their hydrogen promise,” Mr Patterson said.
“Let’s be clear – the government’s hydrogen plan was a government initiative to generate electricity using hydrogen. “There was no mention of GFG in their policy document and there was only one mention of green steel in the 20-page document.
“We now have a state government desperately trying to create a scapegoat to blame for their own pre-election promise.”
More Coverage
‘Albanese’s jelly-back spinelessness’: China’s loud and clear message
Xi wants submission from Australia, not stability. Why make it easy for the Chinese navy? Let’s at least show them that our navy can match it with them in skilful manoeuvres. Let’s raise the cost to Beijing, not give it a free ride to demean us.
Chinese navy’s live weapons exercise out of the blue
The Albanese government has lodged a diplomatic protest with Beijing after commercial flights were forced to change course at short notice to avoid a live weapons drill by Chinese warships between Australia and New Zealand.