07 Sep 2021

Mr TRELOAR (Flinders) (14:16): My question is to the Minister for Energy and Mining. Can the minister update the house on projections for the cost of creating hydrogen, and are there any alternative views?

The Hon. D.C. VAN HOLST PELLEKAAN (Stuart—Minister for Energy and Mining) (14:16): Thank you to the member for Flinders for this important question.

The Hon. S.C. Mullighan interjecting:

The SPEAKER: The member for Lee is warned.

The Hon. D.C. VAN HOLST PELLEKAAN: There are a range of views out there about producing hydrogen. Hydrogen produced by electricity comes from a process called electrolysis. We use electricity to crack water into hydrogen and oxygen. One of the world's largest electrolysers is under construction in Canada. Hydro-Québec is building an 88-megawatt electrolyser at a cost of $Can200 million, which is about $A220 million.

But is there an alternative view? Well, yes, those opposite have an alternative view. The SA Labor opposition is saying that it will buy an electrolyser three times larger than Hydro-Québec's for the same price. That is not even remotely credible. According to the CSIRO, an electrolyser of the size Labor is proposing would cost at least $326 million. The best-case scenario has Labor $106 million short of the money needed to deliver its promise.

The price is coming down though, but the CSIRO says Labor's price tag is not expected to be reached until approximately 2030, so it's no wonder that Labor has not released the modelling used or the costings for scrutiny. Labor has, however, released a few paragraphs of modelling assumptions and they make for interesting reading.

Funnily enough, Labor's model claims to use the same capital costs as AEMO's Integrated System Plan, or ISP. That is interesting because the ISP uses the same CSIRO report that I'm referring to for capital costs. So, on the one hand, in their model, apparently all competing projects use verified prices from the CSIRO for electrolysers but, on the other hand, in their own costings, miraculously it's more than $100 million cheaper.

So if this report is good enough for their modelling, why isn't it good enough for their secret costings? We have been here before with the dirty diesels, which ended up costing double the price they originally suggested and ended up being independently assessed at $612 million. Those opposite have form in this area and they are simply proposing to do it all again. Labor would have us believe that they can build a brand-new hydrogen electrolyser and generator, and all the associated hydrogen management and storing facilities, for less money than they spent on their dirty diesel generators four years ago.