Hydrogen Costs | QUESTION TIME

07 Sep 2021

Dr HARVEY (Newland) (14:22): My question is to the Minister for Energy and Mining. Can the minister please update the house on the cost of liquefying hydrogen, and are there any alternative views?

The Hon. D.C. VAN HOLST PELLEKAAN (Stuart—Minister for Energy and Mining) (14:22): I thank the member for Newland for his very important question—and, yes, I can. The government understands the cost of hydrogen products. In fact, we commissioned the Hydrogen Export Modelling Tool, which uses data from the CSIRO and the US Department of Energy, verified with industry, to price all aspects of hydrogen projects.

Hydrogen comes out of an electrolyser as a gas. It can then be compressed and chilled to negative 253° to become a liquid. That requires very expensive equipment. How expensive? Well, in South Korea SK Group recently committed to a hydrogen liquefaction plant of 30,000 tonnes per annum. That plant costs 500 billion Korean won, which is around $A580 million. Again, there is an alternative view.

Labor's plan proposes 3,600 tonnes of liquefied hydrogen storage at a cost of $31 million. Well, the export modelling tool says that actually would cost $71 million. Labor's plan says the tank holds the equivalent of two months' supply of hydrogen power generation; hence, it needs 21,600 tonnes of liquefaction capacity per annum. The export modelling tool said that would cost $310 million.

The Hon. S.S. Marshall interjecting:

The SPEAKER: Premier!

The Hon. D.C. VAN HOLST PELLEKAAN: Remember the $580 million South Korean project? That's the closest global comparison we have, and it's just 40 per cent larger than Labor's plan.

That example also verifies that the plant to liquefy Labor's hydrogen will cost around $310 million, but Labor doesn't include this in the capital costs for its plan. So Labor's plan makes hydrogen, has liquified storage but does not have the plant to turn the gas into a liquid to put it into the storage tank. If anybody doubts this, page 7 of Labor's Hydrogen Jobs Plan states that the total capital cost of their generator and associated hydrogen supply chain is $593 million. There is no budget in Labor's plan for the $310 million plant it needs to liquefy the hydrogen.

At its simplest, you cannot liquefy hydrogen without a liquefaction plant. They cost hundreds of millions of dollars and it is absent from their costings. It is like piping natural gas to Gladstone from Moomba, having the LNG export tanker ready to go but not having the liquefaction plant to get it onto the ship. We have been here before with the dirty diesel generators, which ended up costing double, at approximately $612 million, compared with what Labor originally estimated, and they want to inflict their incompetence again on the taxpayers of South Australia.