Slow White Elephant – experts pan Labor’s hydrogen plan

21 Dec 2021

In a fatal blow to the credibility of Peter Malinauskas’ signature policy, the Australian Energy Market Operator (AEMO) has panned his proposed hydrogen generator as too slow, exposing it as an expensive taxpayer-funded folly.

Deputy Premier Dan van Holst Pellekaan labelling Peter Malinauskas’ billion-dollar hydrogen plan the biggest waste of taxpayers’ money since the collapse of the State Bank.

“Peter Malinauskas’ plan to waste a billion dollars of taxpayer money on a hydrogen plan that won’t be able to compete in the market proves you can’t trust Labor with your electricity bills,” said Deputy Premier Dan van Holst Pellekaan.

“The Labor Party responsible for the highest electricity prices in the world, the state-wide blackout and the $612 million dirty diesel generators now wants to waste a billion dollars of taxpayers’ money on another disastrous energy plan.”

Peter Malinauskas has chosen a “combined cycle gas turbine” (CCGT) which is outdated technology and can’t turn on or off fast enough to support South Australia’s power grid.

New advice from the Australian Energy Market Operator (AEMO) on the future of generation in South Australia forecasts no more CCGTs being built in South Australia:

“CCGTs have… limited flexibility and can’t effectively operate in a system where wind and solar are producing energy at very low cost at times.”

The last CCGT was commissioned in South Australian 20 years ago. Because they can’t turn on or off in minutes like modern “peaking plants”, which have been built South Australia since, CCGTs are forced to run at a loss in periods of high and cheap wind and solar supply.

“The grid operator says Labor’s proposed generator is too slow – it’s a dinosaur technology that’s going extinct. When you need it, it may not turn up in time to keep the lights on and when you don’t need it, it can’t turn off in time to avoid losing huge amounts of money,” said Deputy Premier Dan van Holst Pellekaan.

“Tom Koutsantonis and Peter Malinauskas’ hydrogen plan is an amateur effort, wasting a billion dollars on old technology that is too slow, and can’t compete against big batteries being constructed by the private sector.”

AEMO’s advice was echoed by renewables expert Simon Holmes à Court, Director of the Smart Energy Council, who has said in relation to Labor’s plan that “a CCGT makes no sense in SA”.

The Hydrogen Strategy Group chaired by Dr Alan Finkel outlines that hydrogen generators are inefficient compared to big batteries, which only lose 10 per cent of the power they consume to charge.

Labor’s energy hungry liquefied hydrogen plant, by contrast, could use three or four units of power to create hydrogen, liquify it, store it, and then burn it for every one unit of power it produces for the grid.

Kane Thornton, CEO of the Clean Energy Council has also argued that batteries are the best investment for the grid’s peaking needs, arguing "batteries can ramp up quickly, have near zero start-up time and provide a better frequency response.”

“It’s little wonder Peter Malinauskas refuses to release the modelling and costings for this outrageous waste of taxpayers’ money,” Minister van Holst Pellekaan said.

SA Labor’s unreleased modelling tries to hide these deep ongoing losses, by assuming a slower transition to renewable energy when compared to the plans of all Australian states.

These deep ongoing losses are in addition to the $500 million black hole that Labor has still not addressed, based upon world’s best cost information from the CSIRO and the US Department of Energy.

“Peter Malinauskas and Tom Koutsantonis have still not explained how they will turn hydrogen from a gas to a liquid to make their plan work – which alone accounts for at least $300 million of the $500 million black hole. They’re just hoping these questions are not asked before the election,” said Minister van Holst Pellekaan.

“Experts are lining up against this plan. The market operator and renewables experts say it’s too slow, and the CSIRO and the US Department of Energy costings show that it’s not credible.

“Labor has form when it comes to hiding the real cost of their energy plans. And their refusal to release the dodgy modelling for their dodgy plan is more proof of that.

“Every dollar wasted on this plan will need to be met with cuts to programs and frontline services.

“Peter Malinauskas oversaw the closure of the Repat hospital and was proud of Transforming Health, and he has to level with the public about where his cuts will be to pay for his hydrogen folly.

“Before the last election Labor claimed the nine dirty diesel generators would cost taxpayers $300 million – the eventual cost was an outrageous $612 million.

“They have a track record of ignoring expert advice, wasting taxpayer dollars, driving up prices and overseeing blackouts – and they’re proposing to do it all again.”