NSW Hydrogen Strategy welcomed by industry

By Lauren Davis
Friday, 15 October, 2021

NSW Hydrogen Strategy welcomed by industry

NSW Premier Dominic Perrottet has announced the launch of the NSW Hydrogen Strategy, claiming it will help the state attract more than $80 billion of investment, drive deep decarbonisation and establish itself as an energy and economic superpower.

“NSW will lead the country with this hydrogen strategy,” the Premier said.

“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.”

Treasurer and Energy Minister Matt Kean said the strategy, which will provide up to $3 billion in incentives, will set the state up as a global hydrogen leader and is forecast to increase the size of the NSW 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,” Kean said.

“This strategy is forecast to more than halve the cost of green hydrogen production in NSW and will make NSW the best place to invest in hydrogen in the world.”

In addition to delivering an already committed $70 million to develop the state’s hydrogen hubs in the Illawarra and the Hunter, the strategy includes:

  • exemptions for green hydrogen production from government charges;
  • a 90% exemption from electricity network charges for green hydrogen producers who connect to parts of the network with spare capacity;
  • incentives for green hydrogen production;
  • a hydrogen refuelling station network to be rolled out across the state.

Business will be invited to submit an expression of interest to participate in the hydrogen hubs by the end of October.

The strategy has been broadly welcomed by industry, with Fortescue Future Industries Chairman and founder Dr Andrew Forrest saying he is “delighted with NSW’s historic hydrogen strategy and ambition to set itself up as an energy and economic superpower”.

“At FFI we are doing everything we can as a business to lead the world effort to lower emissions,” Dr Forrest said. “We are planning to deliver 15 million tonnes of renewable green hydrogen to the world by 2030, increasing to 50 million tonnes per year thereafter.

“We are committed to working with the NSW Government to support their ambitions and develop green hydrogen hubs together.”

The CEO of the Australian Hydrogen Council, Dr Fiona Simon, has meanwhile called the $3 billion strategy “a leap in the right direction [and] a clear demonstration to us that the NSW Government is serious about meeting its net zero commitments and the role of hydrogen to get there”.

“The strategy contains precisely the type of policy commitments, targets and funding that we have called for in our recent white paper ‘Unlocking Australia’s hydrogen opportunity’, and we are delighted to see the NSW Government taking this next evolutionary step,” Dr Simon said.

“In line with our white paper, the NSW 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.

“We are glad the NSW Government has stepped up to the level at which our trading partners are competing. 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.”

Central Coast-based hydrogen R&D company Star Scientific said the green hydrogen strategy entrenches NSW as one of the key players in the global hydrogen map, with Group Global Chairman Andrew Horvath predicting the government’s commitment will attract major investment from the private sector.

“Coming off the back of earlier announcements such as the gazettal of the Hunter and Central Coast as a Renewable Energy Zone, and programs that encourage heavy industry to use green hydrogen to decarbonise, I can say from direct experience that the eyes of the world are on the region,” Horvath said.

Horvath said the Hunter–Central Coast region has advantages that make it attractive on a global scale, including a highly educated workforce complemented by an outstanding research institution in the University of Newcastle; much heavy industry that will require green hydrogen to decarbonise; energy transmission infrastructure and pipelines already in place; deep supply chain infrastructure including roads, rail and the Port of Newcastle; and relative proximity to the new Western Sydney Airport, which will play a key role in global supply chains.

Energy infrastructure company Jemena, which is currently investing in Australia’s most comprehensive hydrogen project (the Western Sydney Green Gas Project), has also praised the government’s commitment to hydrogen — both as part of the state’s future energy mix and as a key step towards unlocking Australia’s potential to provide renewable gas to the rest of the world.

“The strategy places Australia well on the path towards becoming a hydrogen superpower,” said the company’s Executive General Manager of Networks, Shaun Reardon.

“We know green hydrogen has a central role to play in the decarbonisation of the NSW gas distribution network, and that it will prove crucial in powering those industries that can't be easily electrified, such as manufacturing.

“Projections also show that if Australia repurposes its existing gas infrastructure to decarbonise the economy, it will be about half the cost of building and maintaining huge amounts of additional electricity infrastructure.”

Finally, The Australian Workers’ Union (AWU) has welcomed the momentum towards hydrogen by the NSW and Queensland governments — the latter having given its blessing to the world’s largest hydrogen manufacturing facility in Central Queensland — but warned that the massive jobs potential of the zero-carbon fuel source will be squandered if governments don’t learn from the lessons of natural gas.

“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,” said AWU National Secretary Daniel Walton.

“There is potential for the mistake to be repeated with hydrogen if we don’t get our policy settings right. For example, if we’re investing in hydrogen infrastructure, why not build the electrolysers here? We could be investing massively in Australian manufacturing capacity.

“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.”

Walton also claimed that the technology to produce pure green hydrogen at a commercially competitive price “simply does not currently exist”, and that the industry must therefore get a foothold by producing “a mix of blue and green hydrogen” until the technology permits otherwise.

“If we allow purists to insist that governments and industry focus solely on green hydrogen, the sector will remain in stasis for many years,” Walton said.

Image credit: ©stcok.adobe.com/au/Corona Borealis

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