(Kembla, Australia) – The government of the Australian state of New South Wales (NSW) has granted "CSSI" status to Squadron Energy Pty Ltd's planned power plant in Port Kembla. This designation identifies it as a Critical State Significant Infrastructure project. The project, being developed by Australian Industrial Power (AIP), part of the Squadron Group, is a dual-fuel plant that will operate on both natural gas and green hydrogen. The investment amounts to 1,3 billion Australian dollars (0,8 billion euros).
The power plant has an expected output of 635 megawatts (MW) and will be fueled with up to 50 percent hydrogen from day one, according to Squadron. By 2030 it will be powered by 100 percent renewable energy. It supplies households and small businesses and is expected to meet around five per cent of NSW's peak electricity demand. Subject to all project, environmental and grid connection approvals, the power station could be operational in the Australian summer of 2024/2025.
The project will promote the decarbonization of the country, explains Squadron, and is being created not least in the wake of the decommissioning of the coal-fired Liddell Power Station (output: two gigawatts) in 2023. “We believe that this project is a catalyst for future development of green hydrogen projects in the Illawarra region,” says John Hartman, Chief Investment Officer of Tattarang Pty Ltd, owner of Squadron.
In October 2020, Squadron Energy took over from its previous project partners Jera Co. Inc. and Marubeni Corp. (both Japan) all shares in Australian Industrial Energy Pty Ltd (AIE) in order to accelerate the development of the “Port Kembla Energy Terminal” project, valued at $250 million. Squadron has signed a 25-year lease with NSW Port and the new power station will be located close to the terminal. According to media reports, the Floating Storage Regasification Unit will be completed by the end of 2022, which will then cover more than 70 percent of NSW's gas needs.
Andrew Forrest gets involved
The Kembla project is another milestone on Australia's path to becoming a globally significant hydrogen hub. Tattarang is an investment company owned by mining magnate Andrew Forrest, founder of the Fortescue Metals Group, who is planning solar and wind farms worldwide with capacities in the hundreds of gigawatts . With his power plant plans, Andrew Forrest is opposing the continent's conservative federal government under Prime Minister Scott Morrison (Liberal Party of Australia). The plant was originally designed for 850 to 1.000 megawatts. However, the semi-governmental grid operator AEMO (Australian Energy Market Operator) advised Forrest to limit the capacity to 635 megawatts in order to achieve greater diversification in the state's energy supply.
The Morrisson administration is currently trying to revive the country's coal industry. To this end, key positions in state and semi-state organizations are filled or supplemented with new staff; including the Renewable Energy Agency (ARENA), to whose board the Minister for Energy and Emissions Reduction, Angus Taylor, a former executive of the British-Australian mining company Rio Tinto, has appointed.
At an event organized by the Australian industry organization Clean Energy Council in mid-August, Forrest emphasized that the young Australian hydrogen industry must focus on the development of green hydrogen. Don't be fooled by other color codes. “Hydrogen, which is made from fossil fuels and whose carbon emissions are buried in the ground,” is not “the new green.” Regardless of the success of carbon sequestration, which Forrest says “usually fails,” the process would release “enormous carbon emissions.” Any hydrogen produced from sources other than renewable sources is “dirty hydrogen,” said Forrest, who shared his speech in a video about Fortescue Future Industries.
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Rendering of the future Port Kembla power plant site. © GHD / Squadron Energy
