EnergyAustralia commits to carbon-neutral gas plant

EnergyAustralia’s decision to build a gas-powered plant in NSW’s Illawarra region has sharpened the focus on the federal government’s proposal to build a separate gas plant in the Hunter Valley, which could render Andrew Forrest’s planned Port Kembla generation venture unviable.

The Tallawarra B power station to be built by EnergyAustralia has been in the pipeline for about 10 years and finally got the go-ahead after deals were signed for more than $80 million of government money. It will be the country’s first carbon-neutral power station, with green hydrogen to be part of the fuel mix, while carbon emissions from gas use will be offset.

The Tallawarra B plant will sit next to EnergyAustralia’s existing power station in NSW.

To the alarm of fossil fuel opponents, the NSW Berejiklian government is providing up to $78 million to help get the 316-megawatt project to financial close, while $5 million from the federal government will set it up to use hydrogen as well as gas.

It will come online in time for the summer after the closure of AGL Energy’s Liddell coal power generator in NSW.

Under the funding agreement with the NSW government, EnergyAustralia will from 2025 offer to buy enough green hydrogen equivalent to cover 5 per cent of the generator’s fuel use – or 200,000 kilograms of hydrogen a year – and will offset direct carbon emissions for the plant’s operational life.