Estimates Vote

Department for Energy and Mining, $68,285,000

Minister:

Hon. A. Koutsantonis, Minister for Infrastructure and Transport, Minister for Energy and Mining.

Departmental Advisers:

Mr P. Martyn, Chief Executive, Department for Energy and Mining.

Mr V. Duffy, Deputy Chief Executive, Department for Energy and Mining.

Mr S. Crafter, State Lead, Whyalla Steelworks Industrial Transformation Unit, Department for Energy and Mining.

Ms R. Knights, Executive Director, Strategic Policy and Delivery, Department for Energy and Mining.

Mr N. Panagopoulos, Executive Director, Corporate and Commercial, Department for Energy and Mining.

Mr B. Zammit, Executive Director, Regulation and Compliance, Department for Energy and Mining.

Mr W. Pasten, Director, Commercial, Department for Energy and Mining.

Ms A. Butler, Director, Whyalla Steelworks Industrial Transformation Unit, Department for Energy and Mining.

Mr G. Dunseath-Hamilton, Director, Northern Water Commercial Team, Department for Energy and Mining.

The CHAIR: Welcome to today's hearing of Estimates Committee A. I respectfully acknowledge Aboriginal and Torres Strait Islander peoples as the traditional owners of this country throughout Australia and their connection to land and community. We pay our respects to them and their cultures and to elders both past and present.

The estimates committees are a relatively informal procedure and, as such, there is no need to stand to ask or answer questions. I understand that the minister and the lead speaker for the opposition have agreed on an approximate time for the consideration of proposed payments, which will facilitate a change of departmental advisers. Can the minister and lead speaker confirm that?

The Hon. A. KOUTSANTONIS: Yes.

Mr PATTERSON: Yes.

The CHAIR: Changes to committee membership will be notified as they occur. Members should ensure the Chair is provided with a completed request to be discharged form. If the minister undertakes to supply information at a later date, it must be submitted to the Clerk Assistant via the Answers to Questions mailbox no later than Friday 5 September 2025.

I propose to allow both the minister and the lead speaker for the opposition to make opening statements for about 10 minutes, should they wish to do so. There will be a flexible approach to giving the call for asking questions. A member who is not on the committee may ask a question at the discretion of the Chair.

All questions are to be directed to the minister and not the minister's advisers. The minister may refer questions to advisers for a response. Questions must be based on lines of expenditure in the budget papers and must be identifiable or referenced. Members who are unable to complete their questions during the proceedings may submit them as questions on notice for inclusion in the assembly Notice Paper.

I remind members that the rules of debate in the house apply in the committee. Consistent with the rules of the house, photography by members from the chamber floor is not permitted while the committee is sitting. The minister and members may not table documents before the committee; however, documents can be supplied to the Chair for distribution.

The incorporation of material in Hansard is permitted on the same basis as applies in the house; that is, it is purely statistical and limited to one page in length. The committee's examination will be broadcast in the same manner as the sittings of the house, through the IPTV system within Parliament House and online via the parliament's website.

I now proceed to open the following line for examination: the portfolio of the Department for Energy and Mining. The minister appearing is the Minister for Energy and Mining. I declare the proposed payment open for examination. Minister, do you wish to make an opening statement?

The Hon. A. KOUTSANTONIS: No, I will just introduce my staff to the committee, if that is appropriate, sir.

The CHAIR: Yes, go ahead.

The Hon. A. KOUTSANTONIS: To my left is my Chief Executive, Mr Paul Martyn, to my right is Mr Sam Crafter and to my far left is Mr Vince Duffy. Sitting behind me is Mr Will Pasten, Ms Rebecca Knights, Ms Amy Butler, Mr Ben Zammit, Mr Nick Panagopoulos and Mr Giles Dunseath-Hamilton.

The CHAIR: There is no statement, so the floor is yours, the member for Morphett.

Mr PATTERSON: Thank you, Chair. I just want to say thank you to the staff for the work they have done in preparing the budget.

If I go to Budget Paper 4, Volume 2, page 105, the investing expenditure summary, it details moneys invested in the Hydrogen Jobs Plan. We were expecting to see $388 million spent, instead we have $132.497 million as the estimated result and then overall we are seeing a total project cost of $195.9 million, down from $593 million.

In previous budget estimates, we have talked through this a few times and we have expected to see all being revealed and now we come here and we find out there is a big drop. Can the minister confirm, if there was $132.5 million, if we can call it that with rounding out a million spent in 2024-25, that the spending in the 2023-24 financial year was the difference between the $195.9 million and that $132.5 million, so making it $63.4 million spent in the 2023-24 financial year?

The Hon. A. KOUTSANTONIS: Yes, we have said that before in the Budget and Finance Committee.

Mr PATTERSON: In terms of the spending of that $63.4 million, just to break it down, at the last budget estimates you were able to say that money spent in 2023-24 year included $25 million on the deposit for the turbines. Was any more money spent in the 2023-24 financial year for those turbines.

The Hon. A. KOUTSANTONIS: I do not want the committee to feel as though I am attempting to be difficult, but we are currently in the market to dispose of the turbines in a commercial transaction and, as much as possible, I would like to maintain a level of commercial integrity during that process. I am very confident we can recover if not all our costs but more, given the international waiting list for gas-fired turbines and the ability of the government to get in early given our election commitment. These turbines are in high demand.

I think it is appropriate that you have the whole numbers, but when you are asking me for a breakdown on the turbines, I am going to politely decline to give you more details for the very purpose of the commercial integrity of the sale process to make sure that we maximise the most we can for the taxpayer. I think it is very important for me to reiterate to the committee the importance the turbines have for South Australia. The process that we are going into to dispose of the turbines is vitally important.

Since the privatisation of ETSA, the state has been subjected to monopoly rent behaviour by gentailers in the state. We lost our ability to recover any money from our fixed assets transmission and distribution because they were privatised by the then Olsen Liberal government, and that meant that the state was put at the mercy of gentailers. That also means that they can dispose of these generators or curtail them, which means that the firming response that we need from gas-fired turbines is vitally important for system security.

The sale process is not just about recouping our money, which is a priority, but probably more importantly about maintaining system security and ensuring that the state has a viable competitive process in the market, where there are other people offering these types of services. The difficulty I have in answering that question for the member is, if I give him the breakdown, the people who are currently in a tender process with us will be able to calculate exactly what we paid and it would remove some of that competitive tension. So I politely decline to answer that question in the interests of the taxpayer in the state.

Mr PATTERSON: How much of the $63.4 million was spent on the hydrogen storage plant and equipment?

The Hon. A. KOUTSANTONIS: We did not build the hydrogen storage plant. Again, I think I need to do a bit of revision. The state government deferred the Hydrogen Jobs Plan for a number of reasons. The first reason, obviously, was the integrity of the steelworks at Whyalla, for which the Hydrogen Jobs Plan was quite clearly designed.

We decided to build an electrolyser in Whyalla alongside the steelworks for a reason. We were not building a generator where you would normally build it because we wanted to have the ability to provide hydrogen to an offtaker in direct iron reduction facilities at Whyalla to beneficiate our magnetite to green iron to meet export demands into Europe and North Asia because of carbon pricing in those jurisdictions on the import of beneficiated iron using coking coal.

Mr Gupta decided to start using the people of Whyalla and his creditors as a bank and was not repaying his debts. The blast furnace was in a long and prolonged shutdown, which I think he did deliberately to try to minimise cost while he was expanding his empire everywhere else at the expense of Whyalla. The member knows full well that I, to this day, maintain we could have met the timeframes in 2025; however, what we have done is deferred our plans and reallocated that money to Whyalla. What we have been able to achieve I think has been overwhelmingly positive for the people of Whyalla and for this country.

Prime Minister Albanese and the federal Labor government intervened with a $1.9 billion package. Now that $1.9 billion package is a game changer for the people of Whyalla because, as opposed to the last administration in Whyalla where the four Australian banks conducted the administration and sold to Mr Gupta, there is no recapitalisation money. What Mr Gupta was able to do was take nearly $11 billion of revenue from the mines and the steelworks from 2018, and we saw a massive expansion of his empire in Europe, taking hundreds of millions of dollars out of the country each and every year. This is different this time. So when the member asks me how much was spent on a hydrogen storage facility, or how much was spent on anything else, the truth is all that was stopped. We are going to recover all of our money from the turbines, if not more. I am satisfied with the work that we have done to protect the taxpayer and reinvest in Whyalla.

Mr PATTERSON: To follow on from that, you are just saying there is no order made to do with hydrogen storage. None of the $132.5 million in this financial year 2024-25—there will be none spent on hydrogen storage equipment because you have not made an order for it. Is that what you are saying?

The Hon. A. KOUTSANTONIS: No, I am saying that we deferred the Hydrogen Jobs Plan to invest in Whyalla.

Mr PATTERSON: So how much of the $132.5 million in 2024-25 was spent on a hydrogen storage plant and equipment?

The Hon. A. KOUTSANTONIS: I have answered that now twice.

Mr PATTERSON: Have you placed an order for hydrogen for the storage equipment?

The Hon. A. KOUTSANTONIS: The hydrogen storage solution is now a hypothetical because we have deferred the Hydrogen Jobs Plan. Our investment in the Hydrogen Jobs Plan ultimately one day will occur, and the reason it will occur is because this is not a matter of ideology. It is a matter of chemistry. If you want to beneficiate magnetite to green iron, you can use gas methane and it does have a marked production of carbon emissions. But the only way you can actually remove all carbon emissions from beneficiation of magnetite to remove the oxides is by adding hydrogen.

What I think is occurring here—and I do not want to have a quarrel with the member because I think he is quite a good person—is the member is attempting to say the Hydrogen Jobs Plan was deferred because it was not real. I reject that completely. The work that the team had done was world class. The engineering that they had done was world class. Orders were being placed to facilitate the construction of the Hydrogen Jobs Plan. The reason it was deferred was because we wanted to invest into Whyalla.

I am not going to have a debate with the member about: was this component ordered for the Hydrogen Jobs Plan? If the member then says, 'Aha, gotcha, that component wasn't ordered, therefore the Hydrogen Jobs Plan is not real and was never real and could never have been delivered,' to meet some sort of ideological argument out of estimates, the truth is we had a fundamental crisis on our hands. We had a city on its knees and Whyalla's strategic importance to the country cannot be overstated because it is the last sovereign steelmaking capacity this country has. It is the last place in the country we make long products like rail line and structural steel. So I am not going to enter this debate with the member about, 'Was component 4X5Y ordered, and if it wasn't ordered therefore the whole thing collapses.' It is just ridiculous.

Mr PATTERSON: Actually, what we are doing is going through the fact we have spent $195.9 million of taxpayer money and we want to know what we have to show for it. So we do not have an order for the hydrogen storage. In terms of electrolyser plant and equipment, was there any money expended in the $132.5 million on the purchase of electrolyser, plant or equipment?

The Hon. A. KOUTSANTONIS: As I said in my first answer, I am convinced that we can recoup that and more through the sale of the generators.

Mr PATTERSON: But that does not answer the question. The question is: is there any money of the $132.5 million on hydrogen plant and equipment in that money?

The Hon. A. KOUTSANTONIS: I think it does answer your question, because—

Mr PATTERSON: No, it does not, because you are saying you are going to sell the turbine and make all the money from the turbine and pay off the electrolyser, the storage, but then you do not have storage, so that is fine. You do not have to pay that. I am just asking about the electrolyser.

The Hon. A. KOUTSANTONIS: As I said, we have deferred the project. I am quite confident we will recoup this money, if not more.

Mr PATTERSON: That does not answer the question, though, minister.

The Hon. A. KOUTSANTONIS: I think it does. I think what your question is trying to show and what you are trying to pose to the people of South Australia is that somehow this money was wasted, or that somehow that money will not be recouped, or that there was money forgone. What I am saying to you is: I am confident we will recoup this money.

Mr PATTERSON: You are saying we are having to sell the turbines, but there is no mention that we are having to sell electrolysers. You could just say, 'We don't have to sell electrolysers because we didn't have any electrolysers purchased,' which is what your CE gave evidence to the Budget and Finance Committee about.

The Hon. A. KOUTSANTONIS: What you might have also seen were press releases we put out that we had gone out to tender and we were engaged in detailed engineering and design works. I am confident we will recoup all that money.

Mr PATTERSON: How much of the $132.5 million was invoiced by ATCO Australia?

The Hon. A. KOUTSANTONIS: As I said, this is my overarching answer to that question: I am supremely confident we will recover all those moneys. There are a number of commercial arrangements that the government has entered into which remain confidential and those confidentiality requirements need to be maintained and honoured, and they were honoured by the previous government as well when they were in office.

As a former industry and trade minister you would know the importance, when governments sign contracts with companies, of having certain provisions in them. The ability to maintain those provisions is very important for the government, for any government of the day, to maintain a level of sovereignty and minimise risk for investment in the state. When people do business with South Australia they need to know that when they sign a contract, the conditions in that contract will be honoured. One of those contract conditions is commercial confidentiality and I am going to honour it.

What we will give you is holistic numbers, and you have those holistic numbers here. They are laid out by the Treasurer in the budget. They are accurate. There is an annual statement that comes out in September/October which you can match them against, there will be a Mid-Year Budget Review and then there will be another budget next year. After the election, if you are successful, you will have access to all those documents and you will also be under the same obligation that I am to maintain that confidentiality.

My hands are tied here: if I tell you the answer you are looking for, I am breaching this contract. ATCO are a company that operate the Osborne power station, and they are a trusted partner in South Australia and I want them to continue operating in South Australia, but if they start seeing that every time they sign a contract with the South Australian government I am in here blurting out the confidential details in parliament to meet the needs of an opposition, they are going to think, 'Why are we doing business in South Australia?' So you know the answer to the question you have asked me. You know I cannot answer it. I would much rather talk more in depth about the department's future plans, but if you want to focus on the past, I am here.

Mr PATTERSON: I am focusing on the $195.9 million. So that $132.5 million would include invoicing from those contractors: ATCO Australia, BOC Linde, Epic Energy?

The Hon. A. KOUTSANTONIS: I have answered that, Mr Chairman.

Mr PATTERSON: Does that include invoicing from BOC Linde? Are there amounts in there—you do not have to say what they are, just yes or no?

The Hon. A. KOUTSANTONIS: I think that amount would involve people who were involved with the Hydrogen Jobs Plan, and we have put out press releases saying that some of the contractors that were successful in tender processes were BOC Linde, ATCO, General Electric and other contractors.

Mr PATTERSON: There is invoicing in that $132.5 million for the services they provide and ergo in the $63.5 million. Did you have to pay break costs for contracts? You talk about entering into contracts with these companies. You do not have to say the amount.

The Hon. A. KOUTSANTONIS: No.

Mr PATTERSON: Does that $132.5 million include any funds for the virtual gas pipeline that was going to involve trucking in gas to Whyalla?

The Hon. A. KOUTSANTONIS: The gas pipeline work continues. That work is vitally important. This is where the opposition and the government diverge. This government is a strong supporter of natural gas in this state. We believe natural gas is a critical commodity. We mine it in South Australia, we explore for it in South Australia, and we release tenements for exploration in South Australia.

There was a very sad occasion in this parliament when the former government banned unconventional fracture stimulation in the oldest basin this country, the Otway Basin, which I think personally had a devastating impact on investment and confidence in the state. That 10-year moratorium that they placed on that type of behaviour had a significant impact on investment in gas in this state and led to contagion. We saw activists attempting to stop gas exploration. The state believes that gas is a commodity that can be used for good.

The reason we want to get gas to Whyalla and increase the capacity of the lateral and/or explore for other options—and this is the basic formula that I want to go through the committee—as a rough guide, when you use metallurgical coal to beneficiate iron ore, for every tonne of iron ore you beneficiate you release two tonnes of carbon dioxide. When you use natural gas to remove the oxides from iron ore to beneficiate it to iron, the release is about 0.6 tonne, 600 kilograms of carbon dioxide. There is a big step down from 2,000 kilograms down to 600 kilograms, a big step down in carbon dioxide emissions.

If you are building a direct iron reduction facility in Whyalla to beneficiate the magnetite and remove the oxides and create iron, adding methane is a big step down in the amount of carbon dioxide. It is a good stepping stone to hydrogen. The constraints in Whyalla are water and gas, so the government is still actively looking at that and that is a process that is ongoing.

Mr PATTERSON: Sure. There are a few points there, obviously. We were talking about delivering gas to your power station.

The Hon. A. KOUTSANTONIS: What power station?

Mr PATTERSON: You were saying that was what the tender was about, delivering gas to the power station, the hydrogen power station. In terms of gas, I have said also that gas is a good way to reduce carbon emissions for steel.

The Hon. A. KOUTSANTONIS: Why did you vote to ban fracture stimulation in the South-East?

Mr PATTERSON: That is the issue that you are trying to distract. So if we can look at—

The Hon. A. KOUTSANTONIS: You are the alternative mining minister in this state—

Mr PATTERSON: —page 118, Chair.

The Hon. A. KOUTSANTONIS: You are the alternative mining minister in this state and you still defend the ban on fracture stimulation. Why not condemn it now? Condemn it now. Say it was a mistake.

The CHAIR: Minister.

The Hon. A. KOUTSANTONIS: You cannot do it, can you?

Mr PATTERSON: We are still on that page, page 105. At that point, when you put out that tender, that would have been on the understanding there were not going to be electrolysers to be able to produce the hydrogen at the time, so why did you not tell the people of South Australia that you had not ordered the electrolysers and that was the reason you were having to truck in the gas?

The Hon. A. KOUTSANTONIS: What does gas have to do with electrolysers?

Mr PATTERSON: Because you put out a tender because the government said they needed to truck in four terajoules of gas per day to run your turbine.

The Hon. A. KOUTSANTONIS: That is not the question you asked me. The question you asked me—

Mr PATTERSON: And then the question is: if that was the case—

The Hon. A. KOUTSANTONIS: No, Mr Chairman. Just to be clear about this—

Mr PATTERSON: —to run it on hydrogen, why did you not—

The Hon. A. KOUTSANTONIS: —the question you asked me was: why did I go out to tender for the electrolysers without sufficient gas? And I am asking you: why would I need gas for the electrolysers?

Mr PATTERSON: I think you have misinterpreted the question or I did not say the question correctly, so I will say it again.

The Hon. A. KOUTSANTONIS: Can you say it correctly now?

Mr PATTERSON: I will ask it again. If you were having to truck in the gas, and the gas was there to run the turbines, that was because hydrogen was not going to be produced by electrolysers to power it.

The Hon. A. KOUTSANTONIS: No.

Mr PATTERSON: The question is: why did you not tell the South Australian people at the time? We now know there has been no order for electrolysers, so why in September did you not tell South Australians that there was no order for the electrolysers?

The Hon. A. KOUTSANTONIS: The conspiracy theories might be fun on YouTube but this is the real world, so can we please be serious. The reason you might want to truck in gas is you might want to have starting options for the turbines. It is not unusual for turbines to run on different fuel sources. The thing about the turbines that we have ordered is that they can operate entirely on hydrogen and entirely on gas, or a mix, so it is well within the realms of possibility that you produce hydrogen.

But depending on when you need the fast-start generators, you might want to start in a period when the conditions were not suited for the production of hydrogen, given the cost of power from the grid, so you would have the ability to start them with gas. The conspiracy theory that somehow this meant we were never going to run them on hydrogen—I mean, mate, if you want to talk about conspiracy theories go on Tucker Carlson. Do not come in here and give me the conspiracy theories. Can we just be serious?

Mr PATTERSON: It is not a conspiracy theory, it is just an obvious statement of fact.

The Hon. A. KOUTSANTONIS: Yes, sure it is.

Mr PATTERSON: There was not going to be any hydrogen to power your power station when the turbines arrived. Moving on, but still on that same line, there is no money to be spent in the budget for 2025-26. If there are going to be sale proceeds, does that $195.9 million take into account sale proceeds of the turbines?

The Hon. A. KOUTSANTONIS: Sale proceeds will be accounted for when they come into the budget.

Mr PATTERSON: So they are not in the budget at the moment?

The Hon. A. KOUTSANTONIS: We have not sold them yet.

Mr PATTERSON: Sure, but there is no estimate of what you would be budgeting for?

The Hon. A. KOUTSANTONIS: Treasury estimates were yesterday—you could have asked that of the Treasurer—but from my understanding we have not sold the turbines yet, so how can we account for the money?

Mr PATTERSON: I am just making sure—that is fine. I refer to the Budget Measures Statement, page 32. It talks about the Whyalla turbine divestment. As part of the sale price, it is going to cost $3.8 million to oversee the divestment of the four hydrogen-capable gas turbines. Will the government take physical delivery of these turbines prior to sale?

The Hon. A. KOUTSANTONIS: It depends if we sell them beforehand or not.

Mr PATTERSON: Are the turbines still in the US at the moment?

The Hon. A. KOUTSANTONIS: I do not have a GPS tracker on them, but they are being manufactured and their delivery will begin this year.

Mr PATTERSON: Can the minister explain the sale process and what the $3.8 million will be used for?

The Hon. A. KOUTSANTONIS: The $3.8 million will be used to manage a tender process for the sale of the turbines.

Mr PATTERSON: Why does it cost $3.8 million to manage a tender process for the sale? What is involved in selling them then for that much?

The Hon. A. KOUTSANTONIS: I think it is normal practice that you would have a percentage of money being spent. For example, let's say, hypothetically, the sale process of the turbines takes a bit longer. There are storage facilities that we would need to house the turbines. There are costs associated with that. My instincts are that the sale process will conclude well before this, because they are highly sought after, and there has been lots and lots of interest. So whether that $3.8 million is spent or not, we will find out in the MYBR or the next budget, but it is prudent to have some money in place to make sure you can conduct an appropriate sale process.

Mr PATTERSON: Has the sale process commenced?

The Hon. A. KOUTSANTONIS: Yes.

Mr PATTERSON: Have you put out expressions of interest for that?

The Hon. A. KOUTSANTONIS: The sale process is a matter being conducted by the agency. There are early processes that I have been going through. Cabinet has set out a process for the department to follow. The department is following it. I am not sure when the public call occurs, but I can get back to you with that.

Mr PATTERSON: You are not prepared to say where the turbines are, whether they are here in Australia, whether they are on the way, enroute, but at some stage the turbines will be delivered. You are putting them out to sale and theoretically you could sell them beforehand or after. Will the state government pay the full contracted amount for the turbines prior to the sale?

The Hon. A. KOUTSANTONIS: It depends on when we sell the turbines.

Mr PATTERSON: Conceivably what could happen is you could ask the potential purchaser to pay the balance of the sale and so the moneys—

The Hon. A. KOUTSANTONIS: In effect, they are buying our slot potentially, depending on when the purchase occurs. These are four units. Those four units will be operational and ready to go relatively soon, depending on how quickly the sale process goes, depending on how quick the tender process is, depending on how large the offers are.

Mr PATTERSON: From that information, does that mean there are still moneys to be paid for the turbines? You do not have to say how much there is but, in terms of the state government, I am trying to get an understanding of the sale process. If a company can come in and say, 'Well, we are going to take ownership of these turbines and we will pay the balance,' does that mean there is still a balance outstanding?

The Hon. A. KOUTSANTONIS: We have paid the milestones required by General Electric to have our 200 megawatts available by this year.

Mr PATTERSON: When you say 'paid the milestones', that is fine. Have you paid the final milestone, which would be taking ownership of them?

The Hon. A. KOUTSANTONIS: I am not going to say anything that would in any way hurt, hinder or inhibit the sale process to maximise value for the taxpayer. I do not want anyone who is listening to this to be able to assume, to know, how much we have paid, what we have paid, because escalation occurs quarterly. These things, to be bought on the market after they are delivered is a bit like some items when they come out of a showroom; they are more expensive rather than depreciating, given their availability.

I am not letting any potential tenderer know exactly what the state is owed or what it is going to pay, other than to say we have 200 megawatts for sale of fast-start turbines that are aeroderivative made by General Electric. They are being delivered this year, and I am confident we can sell them at a premium. I am not going to do anything that would damage that sale process, and you would not want me to.

Mr PATTERSON: No. That is fair. I understand the issues, and thank you for answering the questions. I understand where you are coming from, but there is a significant expenditure there. When you talk about it being delayed—we have delayed the hydrogen power plant—when will this hydrogen power plant be restarted, if it is just delayed?

The Hon. A. KOUTSANTONIS: That is an excellent question. I am glad you have asked that, because that depends entirely on the sale process in Whyalla. KordaMentha and 333 Capital are operating the data room for the sale of the assets in Whyalla. You will want to settle in for this.

Obviously, there are some very prestigious and reputable international players and Australian players looking at Whyalla holistically, that is, pit to port. Depending on the consortium that buys it, their final investment decision on direct iron reduction and the electric arc furnace is going to be vital to this. Let's focus on the direct iron reduction facility. If you started today to build a direct iron reduction facility, you would probably need a good two years of detailed design.

You would have to assess the life of the blast furnace, because you do not want to have a time when the blast furnace is closed and a direct iron reduction facility is not built. That would mean job losses in Whyalla, so you have to stage those. As you are staging those, you would want the direct iron reduction facility to operate on gas for a period of time, because there is another opportunity for us, which is direct capture carbon storage in Moomba. There is an ability for us to use gas and capture the carbon and store it efficiently in Moomba, which is also being looked at.

Let's say a consortium buys it and their timeframe is five years for direct iron reduction and they want to use gas. That gives the government time to know that, when they get to FID, the government now must start considering hydrogen facilities, because the only way you are going to get beneficiated briquetted iron into Europe for a premium is to meet their CBAM requirements, which is that they are carbon abated. That is either through a certified carbon capture and storage process or hydrogen. There is no other way. It is not politics, it is not ideology, it is science.

Someone is going to need to build a hydrogen electrolyser to decarbonise that. We know that you will not because, despite it all being about hydrogen, hydrogen, hydrogen and the massive investment that you made in Port Bonython to build a hydrogen import facility and export facility—we will talk in a moment about how successful that has been—and how you were all rushing to cut the ribbon on the first hydrogen electrolyser down at Tonsley and how you all loved that process and you all were owning hydrogen, now you have dropped hydrogen because you think it is aligned with the Labor Party.

Rather, you should look at it in a purely scientific way of how do I remove the oxides from iron without creating carbon dioxide? There is only one way, and that is to add the H molecules and you get water as a byproduct. That is just chemistry; it is not politics. Somone is going to have to build a hydrogen electrolyser. It will either be the government, because it will not be you—it will only be a Labor government, because you will not decarbonise steelmaking—either us or a private consortium.

In terms of the Hydrogen Jobs Plan, someone is going to build it, because it has to happen. You guys are out there trying to hold back the tide, but that is not going to happen. It is not real. I have even heard Liberal MPs talking about us wanting to use hydrogen to 'burn' to make steel and iron, so there are obviously Liberal MPs out there who do not even understand the chemistry of what we are attempting to do, which is really frightening.

So someone is going to build it. It might be the government in a version of the Hydrogen Jobs Plan or it might be a private operator. One way or another—and I stake my political career on this—someone will build an electrolyser to feed steelmaking in Whyalla, because it is the only way to remove the oxides from the iron ore. It is the only way to do it carbon free.

Mr PATTERSON: Thank you for that explanation, which really tries to divert from the question. The question was: will the project, which has been delayed—so you have delayed a 250 megawatt electrolyser. You have talked about that, but then there was also 3,600 tonnes of hydrogen storage and then there was a 200 megawatt turbine. That was the package.

You are trying to conflate the fact that the Liberal opposition is pointing out and opposed to a massive amount of taxpayer money on that solution as opposed to hydrogen. I have no problem with you saying that I was saying 'hydrogen, hydrogen, hydrogen'—fine, because (a) I understood the opportunities of it but (b) I was very mindful about the time it would take to actually ramp it up and not go for something in 2025 like you have done.

When you are saying it is delayed, are you going to have the Hydrogen Jobs Plan as it was outlined to the people of South Australia before the 2022 election? Is that going to come back and when is that going to come back, the whole thing?

The Hon. A. KOUTSANTONIS: I just gave you my answer.

Mr PATTERSON: No, you did not. You mentioned electrolysers and that it might be a private consortium or the government. We need to understand. You are trying to say it is delayed—

The Hon. A. KOUTSANTONIS: Yes.

Mr PATTERSON: So where is the project that is going to bring back 200 megawatts of turbine that is going to be powered by the hydrogen gas with the 3,600 tonnes of storage? That is what the project was. You are saying it has just been delayed; now we have found out that maybe bits of it are going to come down and it might be in five years or it might be a bit later. I am trying to get an understanding because we need to understand it. We have spent $195 million in the budget here. What has been delayed?

The Hon. A. KOUTSANTONIS: You see the irony in you asking me eight months before an election what our plans are when you have not even released an energy policy. You see the irony here, right? We have an energy policy, we are out to auction for the firm, we are out to auction for our generators to get more capacity to the system, we are building an interconnector, we are seeing massive reforms in the electricity market and we are regularly bringing the legislation to the parliament to reform the National Electricity Market. There has been silence from the opposition—in fact, you have rekindled an old policy on battery storage that failed in the last term.

Rather than lecture me about our Hydrogen Jobs Plan—which the government openly and honestly said we have deferred to save Whyalla and invest that money into Whyalla—think of the counterfactual, member for Morphett. Imagine if the government had pushed on and continued to build the electrolyser and the generator and Whyalla closed and went into administration, Mr Gupta shut the blast furnace and it went cold, and there were thousands and thousands of jobs lost in Whyalla. What would this meeting be like today? You would be sitting over there screaming at me, saying, 'Why are you spending money on an electrolyser when the steelworks has closed?' When we do the right thing and defer the investment in the electrolyser and the generator to put that money into Whyalla, you turn up and complain.

Imagine if we had done the opposite and fulfilled our election commitment rather than do the prudent thing, which is deal with the crisis in front of us—which you voted for and you supported us in doing it, unanimously, in this place and the other. Now you come and say to me, 'We have a right to know about the delay.' I am telling you: we are dealing with Whyalla. Whyalla is still a live situation; Whyalla is not settled. We are still dealing with Whyalla. Once we have completed and secured Whyalla and its reinvestment and the people of Whyalla have continuity and security into the future and this country has a sovereign steelmaking capacity, then we will move on to the decarbonisation of ironmaking. The first step, which I have said, is gas. The second step is hydrogen.

If we had tried to do both—the move that we made on Mr Gupta and continued with the hydrogen plant—your complaint would be about debt and spending. So in any of the three scenarios, you would have complained. I am sorry if you feel some frustration in my answers, but this opposition is not about a constructive solution. All you are looking to do is to find grievance. What we have done is we have deferred the Hydrogen Jobs Plan to invest in Whyalla. That was the right thing to do—so much so, you voted for it.

The public supported it, the people of Whyalla supported it, the commonwealth government supported it, Peter Dutton supported it—everyone supported what we did. I feel absolutely no guilt whatsoever about what we did to save Whyalla, because, as far as I am concerned, had we not, had we lost the 2022 election and Mr Marshall had been re-elected, the people of Whyalla would now be picking up the pieces of a closed steelworks, because you would not have intervened.

Mr PATTERSON: So you can confirm, though, that there is zero dollars in the budget for the Hydrogen Jobs Plan going forward? That will be a new decision of the government and it will have to be introduced back into the budget as there are no dollars sitting there to pick it up. It is because you are saying, 'We are going to sell the turbines and that's it.' No money.

The Hon. A. KOUTSANTONIS: I think I have answered the question.

Mr PATTERSON: Let's talk about Whyalla, so we will go to Budget Paper 4, Volume 2, sub-program 2.3, page 114. That is the work regarding Whyalla. In the budget it says that there was $385 million spent in the stabilisation of the steelworks. Can the minister provide a breakdown of what that money is being spent on?

The Hon. A. KOUTSANTONIS: I am on page 115, which number are you pointing to?

Mr PATTERSON: It is page 114—we could go to page 115, 'Support the sale of the Whyalla steelworks to a new owner and work with them to invest in the upgrades…'

The Hon. A. KOUTSANTONIS: So the money is being spent obviously stabilising the steelworks. I will give you a more fulsome answer in a moment. When I visited the plant, before it went into administration, I spoke to some of the employees there and I said, 'What is going on in terms of maintenance?' There were water pipelines that were leaking and not being fixed, gas pipelines that were leaking and not being fixed. There was a lot of hydraulic equipment that needed repair and maintenance. A lot of the money that you have seen go into Whyalla right now is about stabilising and doing the repair and maintenance work that Mr Gupta had banked into his own pocket, rather than spend on the plant.

So, I think what the administrator is doing, with the assistance of the state and commonwealth governments, is pouring money—we have got the recapitalisation fund and the administration fund, and the administration money is used to do a lot of the care and maintenance that had been neglected by Mr Gupta. So you are seeing roadworks, for example; fixing up basic things like traffic lights that he just let fall over; cleaning; laundering of clothes that employees are meant to wear; and basic tools and carbon monoxide monitors that were just left unattended or not renewed. Gas pipelines have been repaired. Water pipelines have been repaired. There is equipment that is needed to maintain the blast furnace, especially hydraulic equipment; there are special types of Bobcats and shovels that are used that have hydraulic equipment that can withstand molten metal.

They were running low on key components there. If they had lost any of those, they would have been out for months while they were trying to get parts. So what you have seen is the steelworks come back up to an operational level that you would expect to see at somewhere like Port Kembla or that you would expect to see at POSCO, or at Nippon, or where Whyalla was when Arrium ran it and Mr Gupta took it over.

The amount of degradation that occurred at the steelworks under his ownership is probably criminal. It is terrible. So we are pouring money in to make sure that the workers have a safe workplace, that it is fit for purpose and can produce and have longevity, doing the maintenance that was neglected for long periods of time on the rolling mill and on all the key parts of the facility that were neglected.

This is a bit of breaking news: Gupta had decided to no longer monitor carbon monoxide levels. That could have caused a death. Carbon monoxide now is regularly monitored. We know that when the levels are too high, which can happen through the steelmaking process, employees are not safe. A lot of that money is going towards that. There is money going into the mines as well to make sure that we can appropriately maintain a level of mining to feed the steelworks, because the steelworks can operate on magnetite after Project Magnet, and of course for export, and there has also been work done on the port.

What you are seeing holistically, from pit to port, is an investment in just bringing it up to standard that had been neglected by Gupta. I cannot remember how much his apartment in Sydney cost that he bought, but I suspect it was paid for out of the blood, sweat and tears of the people of Whyalla. I am pretty sure that money would have been used for maintenance in Whyalla, which is money that we have now put in. I read in the Australian Financial Review yesterday an article about Tahmoor coal. It is the same scenario: not paying royalties, not paying debtors. The New South Wales government is being referenced in there by sources saying that it is considering pushing Tahmoor coal into administration the same way we have.

This man is a bad actor. This man can redeem himself, I think, through a good negotiation, but we need to make sure that we invest heavily into Whyalla to undo the lack of maintenance. To Mr Gupta's credit, he had the right plan. He is exceptionally smart, a very intelligent individual, and he had the right plan for Whyalla. The problem is he did not invest in it, which is very frustrating—very frustrating. If he had focused on Australia, he could have been one of the greatest industrialists in this country, but he chose not to, and I do not know why.

It will surprise me to my grave why he did not focus on Whyalla. It was the golden goose: as I said, over $7 billion in revenue in iron ore sales since 2018. It is a very low-cost mine. It could have been reinvested in, it could have done MEP1, MEP2, MEP3. We have done an analysis of mining expansion 1, 2 and 3. The work that Mr Gupta's team did was first class. It was first-class work, eminently investable, but the investment was not made. I do not understand why, but I think the expansions in Europe and the personal luxury go a long way to explaining why.

Mr PATTERSON: The condition of the furnace is a very key item. What is the condition of the furnace now, and was that where a lot of the expenditure had to go?

The Hon. A. KOUTSANTONIS: I think in speaking to KordaMentha, they were shocked at the condition of the entire plant from where they were when it was in administration previously—shocked. And you could see it on the faces of the employees. You could see that they knew. I have said this a couple of times and I want to say it again on the record in parliament: the men and women of Whyalla who worked in that steelworks were doing things they were not being paid for to keep that place going. I get pretty angry when I hear about some economic rationalist on the east coast saying we should have just shut the steelworks. When that blast furnace was down, I am not sure Mr Gupta was really fussed whether it came back up or not. Those employees in that team who ran the blast furnace, they are heroes. Those guys were carrying the entire weight of the city on their shoulders, and they did an exceptional job in bringing that blast furnace back on.

Now, what is the state of the blast furnace? Blast furnaces do not like being run hot and cold. Mr Gupta's plan, to give you some context, was that he wanted to operate the blast furnace the way you operate an electric arc furnace—hot and cold to meet demand. He was trying to hot idle it and then gear it up again. This blast furnace does not like going cold, it wants to run hard, so it caused a lot of problems. Now that it is running constantly, it is working well. A lot of the maintenance has been done around the tuyeres and making sure that all the cooling systems are working, making sure that all the ventilation systems are working, making sure the supply. of gas is working, that there are stockpiles of coking coal. Everything that needs to be done to maintain a healthy blast furnace is now being conducted.

What damage was done during the period that Mr Gupta was running it at hot idle and trying to turn it down, you cannot tell because you cannot get in there to have a look. From the outside I am advised it is healthy. Its output is consistent. It is pouring metal, it is doing well and it is running hard. It is unique, it is not off the shelf, it is bespoke, which is not good. I think it is fair to say this blast furnace will not get a reline. It might but it might get a partial reline if a new buyer buys it, depending on their timelines for direct iron reduction. It is hard to tell, but as to the advice I have received, everyone is comfortable and satisfied that this blast furnace was able to withstand everything Gupta threw at it and is now operating appropriately and properly at full capacity.

Mr PATTERSON: A lot of money has had to be spent on this upgrade and the budget talks about providing a second tranche of money. So is there still money left of the first tranche for administration, or how long until that runs out and then the second tranche that is put in the budget needs to come in?

The Hon. A. KOUTSANTONIS: I refer you to page 11 of Budget Paper 5, Budget Measures Statement.

Mr PATTERSON: Yes.

The Hon. A. KOUTSANTONIS: Because we started six minutes late, I am going to give you a free kick. The Treasurer went through this which shows all the contingencies and the expenditure on Whyalla. So it is there for you.

Mr PATTERSON: Yes.

The Hon. A. KOUTSANTONIS: I deal with the DEM expenditure. This is across government. There is a cabinet committee of which I am a member that oversees this expenditure, but it is vested in the Treasurer. This line is not open, but I am just letting you know that if you want more details on the expenditure and the breakdown of it, it is on page 11 of Budget Measures.

Mr PATTERSON: No, thank you, and I did not know that, but I appreciate you going through that. So you are saying that is more the Treasurer. Okay, fair enough in terms of that. In terms of the administration process, there is a lot of money going in to fund the administration to get it up to scratch for sale, and then there will be a buyer who comes in who will buy it. How will the money work from the stabilisation process? Will that be recovered out of the sale proceeds before all the creditors, or is that effectively money just to get up to speed and then the sale proceeds will go to pay down all the creditors?

The Hon. A. KOUTSANTONIS: We have paid the creditors—the ones in Whyalla. They have been paid for by the state government. We put the company into administration, so we had a responsibility to pay some of those creditors. The larger creditors, like Golding or NRW, are the ones that were dealing with Gupta and were not being paid, and they can look after themselves. I am not sure what the administrator will get, ultimately, for the steelworks. That is a matter for the administrator. Our recapitalisation money is not to pay down debt of ASX-listed companies based elsewhere; our money is to recapitalise Whyalla. I am not paying Golding's debt, is what I am telling you.

Mr PATTERSON: In terms of answering that question, I understand that, but that leads to a few questions. The creditors understand that the smaller South Australian companies have been paid. As part of their payments, were they paid the full amount owing, or was it a smaller amount and there is still more to come? Have they been fully paid what was owed?

The Hon. A. KOUTSANTONIS: State Development are running that program, so I would refer you to Minister Szakacs's estimates, but the brief outline of it is: there is a $50 million package to provide grants of up to $5 million to support the continued operation of eligible South Australian businesses that have been directly impacted by OneSteel. There is $7 million over two years to support local businesses in Whyalla impacted by the administration of the steelworks. This includes the provision of grants for eligible small businesses operating in Whyalla, financial advisory services and legal support services, as well as the deferral of 2024-25 state taxes and government charges for up to 12 months.

We have put money into the Whyalla surf club, $30 million has gone into the Whyalla Airport upgrade, and $100,000 has gone into the study and design of options for the Cuttlefish Cove experience, which I highly recommend. You might remember an article that a number of chief executives went for a swim with the cuttlefish—not Mr Crafter, of course. He did not go, but others did. Mr Martyn did not go either. They were other chief executives.

Mr PATTERSON: In terms of the creditors, there was, I think, $34 million of royalty payments owed to the Department for Energy and Mining by Mr Gupta. Has that been repaid as part of the creditors getting paid, or has it been paid at all?

The Hon. A. KOUTSANTONIS: Could you repeat the question, please? Sorry.

Mr PATTERSON: The royalty payments that were outstanding to the Department for Energy and Mining: have they been paid back?

The Hon. A. KOUTSANTONIS: It is a debt that is owed and we will deal with that as part of the process.

Mr PATTERSON: So it is still an outstanding debt.

The Hon. A. KOUTSANTONIS: But all royalties post-administration have been paid.

Mr PATTERSON: In terms of the long-term goal, which is to find a buyer, the administration process is going and money is being spent to upgrade the steelworks and stabilise it. What process has been undertaken so far to secure a buyer, and if you are at liberty, are you able to name potential interested parties?

The Hon. A. KOUTSANTONIS: No, I do not want to name them.

Mr PATTERSON: Okay. Can you talk about the process?

The Hon. A. KOUTSANTONIS: The administrator will decide, because the administrator is independent of the Corporations Act; however, a data room is open and 333 Capital, investment advisers, are basically building a prospectus book for potential buyers. The data room is open. There are a number of people in the data room. I will give you some general jurisdictions: Japan, Korea, United Stated, Europe, India—all world-class manufacturers of iron and steel. What we are looking for is reputation, transparency, investment history, and runs on the board.

The reason we have a say is that we have money for recapitalisation and reinvestment. That money is not a blank cheque for anyone who just turns up and they just get hold of that money. Obviously, we have criteria that we are working up. My ambition, the government's ambition is direct iron reduction with an electric arc furnace. An electric arc furnace on its own is insufficient. There is insufficient scrap in this country to maintain an adequate supply of steel.

The aim of Mr Playford who is pictured up there has always been to maintain a link between the mine and the steelworks: pit to port. It is in the indenture and it is genius and it underpins the state's prosperity plan: beneficiation of our own products into a higher value. I see you nodding, which is good, despite you criticising the prosperity plan.

The reason we are looking for trusted partners is that I do not want someone thinking that they can come along, purchase the steelworks and pocket $2.4 billion. No. We are an investment partner and that partnership is about reinvesting and recapitalising the steelworks so we do not have to ever come back here again and do this again.

We believe that direct iron reduction, a one million,1½ million, 2½ million tonnes, depending on who purchases it, what the fit is, electric arc furnace and an export plan are key. That is what we are looking at. That is the process. Everybody who comes to us through the front door we funnel through to 333 Capital, which is who we think they should go and talk to. We want them to be involved.

I have met with Danieli, who are a provider of infrastructure. He has advanced plans for Whyalla because Gupta obviously engaged him for an electric arc furnace and DRI plant and he is a trusted manufacturer and sales operative, OEM, globally, with some of the best products in the world. There is Mitsui. They have excellent products as well. There are other Japanese and Korean OEMs looking at this. All of it is being funnelled through 333 Capital so we can have an organised good outcome that is not based on sale price but based on recapitalisation and reinvestment to make sure we have a long-term solution for Whyalla, because that will be in the better interests of the taxpayer in the long run.

If we do what the four Australian banks did last time and just take the highest bidder, there is no guarantee we get a good outcome at the end. Hopefully we get both: the highest bidder and the best outcome. But our focus is on the best investment opportunity for South Australia and the country. I hope that answers your question.

Mr PATTERSON: Just from the answer, and it is understandable, the government is ultimately going to be able to decide who the buyer is. I know usually it is the administrator, but with the government putting so much money in, it appears from your answer, minister, that the government will have maybe not 100 per cent of the say but a fair bit of the say in the final purchaser.

The Hon. A. KOUTSANTONIS: When the data room is open, and the administrator decides to enter into a deed of company arrangement under the Corporations Act, whoever accesses the state government's money will obviously have an advantage. But in terms of us having a say, our say is not through the Corporations Act—our say is through the money we offer. Do you know what I mean?

Mr PATTERSON: Yes. Has the department looked at contingencies if no buyer can be found?

The Hon. A. KOUTSANTONIS: Sorry?

Mr PATTERSON: Is the department considering what is to be done if no buyer can be found, because obviously a lot of money has been put into stabilising it and redoing it?

The Hon. A. KOUTSANTONIS: The government and I—all of us—are totally focused on getting the right outcome for South Australia. I do not think that eventuality will occur.

Mr PATTERSON: You have talked a lot about the port, the mine and the steelworks. Basically, just to reiterate: after we have had the legislation in there, there is no way that there would be a splitting up of the port, the mine and the steelworks as part of any package? That is what my question is around: the government having a say in the buyer.

The Hon. A. KOUTSANTONIS: I am not sure what your point is, and I am not being silly.

Mr PATTERSON: The whole of keeping the steelworks, the mine and the port all in the indenture—

The Hon. A. KOUTSANTONIS: It is law—it is the law of South Australia. You cannot break it up, you cannot hive it off without the permission of the Minister for Energy and Mining. Former minister, Mr van Holst Pellekaan, did not give permission for the port to enter under new control or new operations, and as far as I am concerned I will honour the indenture.

Mr PATTERSON: In terms of the site itself, it is quite an old site and would probably have quite a lot of contamination in there. In terms of the remediation that potentially could be required, is there an issue with that with potential buyers: that when they come in, would they be taking on a liability of having to ultimately, at one stage, remediate the old plant and equipment if they are going to put in new DRIs, and what would be the cost of that?

The Hon. A. KOUTSANTONIS: There are existing legal obligations under the EPA licensing, which means anyone purchasing it will have to take on those obligations. In terms of what the cost is I am not sure if we made that public, but that would be an EPA question.

Mr PATTERSON: I refer to Budget Paper 4, Volume 2, page 104, key agency outputs. The ninth dot point talks about energy and the department's role, and opportunities for the control of their energy usage. We have just had the recent ESCOSA report handed down, and it showed that prices for the average household have increased—in fact, they have increased substantially over the three reports that have come out under the Labor government. In light of those increases, what work has your department undertaken in the last 12 months to help reduce power prices for households?

The Hon. A. KOUTSANTONIS: I have always found these questions interesting from opposition members, especially ones who support non-government ownership of energy assets who then bemoan power prices going up. I say beware of politicians who tell you they can lower power prices. Beware of them because the most recent example is Mr Marshall—

Mr PATTERSON: What about Anthony Albanese?

The Hon. A. KOUTSANTONIS: —a one-term premier who made a promise to reduce power prices by $302. Lofty ambitions. The best he was able to do was reduce it by a dollar.

Mr PATTERSON: Actually $421, I think.

The Hon. A. KOUTSANTONIS: When you come to government and say, 'What have you done to reduce power prices?' I don't own AGL, I don't own Origin, I don't own Energy Australia, I don't own ENGIE, I don't own ATCO, I don't own SAPN, and I don't own ElectraNet. However, the person sitting in my chair in 1998 did own the assets of those companies in South Australia, and power prices were a lot cheaper. So what are we doing? We have done a lot of work trying to make sure that the regulatory impacts of cost to consumers from SA Power Networks' and ElectraNet's bids for more money are accurate, and we try to do our very best to minimise those.

We are doing our work to make sure that we can maintain locations for community batteries and partner with the commonwealth government to deliver community batteries for greater storage and shave off the peaks. We have introduced the FERM, which the member voted for, which will allow us to hold auctions to bring in and maintain gas-fired turbines and system security in the system, which should allow us the ability to have more contracting into the market. We offer a number of rebates to people who are vulnerable, and we are active in the energy ministerial committee, where we are attempting to bring about reforms that will lower prices.

The best way to lower prices is to create an overabundance of electrons. The best way to lower prices is to lower the cost of firming units. Those firming units run on gas. Gas is expensive because gas is scarce. Why is gas scarce? Gas is scarce because members opposite voted to ban something that has been occurring in Australia for over 50 years, which is fracture stimulation in one of the largest basins in the country.

So excuse me, while you point to the splinter in my eye, why not look at the log in yours? Before you come and complain to me about power prices, why don't you get a mirror out, have a look at it, and say to yourself, 'Why is gas so expensive in this country? Could it be'—this is not me, this is you thinking—'that I voted to ban fracture stimulation in the South-East where some of the largest gas basins in the country are, which has stopped all investment in that area, despite there being a gas pipeline that runs right through the heart of it, despite there being Kimberly-Clark Australia, which is a big user of gas in this state and employs 400 people, despite the fact that gas is a key part of our energy security mix and sets the price of electricity?'

So, what I am doing is I am releasing more basins for exploration, I am putting out more tenements for gas exploration and I am encouraging more gas exploration. We are a pro-gas state that wants to see gas used because it can help us put more renewables in because renewables are the cheapest form of energy. That is what I am doing. In February we go into caretaker mode, in 2026. This is the pointy end of the term. Where is the compare and contrast that the public deserve on energy policy? I would like to know.

In the next term, the moratorium in the South-East comes to an end. Will members move to extend it, or will it end? Now, you are the shadow energy minister. You have an opportunity here to tell the nice people of South Australia and the South-East whether or not you will extend the moratorium past 2028 or whether you will let it lapse if you win. What is your answer? Silence. That is what I thought. No policies, nothing to say.

Mr PATTERSON: What is your answer to that, minister? I am the one asking questions. You are the minister sitting there. What will you do with fracking in the South-East?

The Hon. A. KOUTSANTONIS: You will get my answer very soon.

Mr PATTERSON: There you go. Now the government has shelved your only energy policy from the previous state election where you said you would bring down wholesale prices by 8 per cent—

The Hon. A. KOUTSANTONIS: Wholesale prices have come down.

Mr PATTERSON: —what is the plan to reduce power prices then?

The Hon. A. KOUTSANTONIS: As I said, our plan is to get more gas into the market, shave off the peaks, more community batteries and the FERM to make sure we have system reliability. We want more competition in the market. We are working through the energy ministers' council to bring about reforms that will see more storage, more firming, more renewables and more competition.

We are putting an extra 200 megawatts of generation into the system. Unlike what members opposite did when they privatised the generators, they did not make them offer commercial market offerings, they are just wholesalers. I want a retailer. I want someone who is going to go out there and compete with AGL, compete with Origin, compete with ENGIE, compete with Energy Australia and compete with people to offer more contracts into the market. That is what I am doing.

Members opposite had a policy to give people subsidies for batteries. I remember well your genius plan. Vince, you might want to remind me if I get any of this wrong, given your involvement in this plan. The plan was to offer a subsidy for batteries. The uptake was low on these batteries, so do you know what they did? They cut the subsidy. They lowered the subsidy.

They came into this room and I said, 'So is the strategy to get more batteries into the households that you said you would get by not offering more of a subsidy but to offer less?' The answer was, 'Yes. If we reduce the subsidy people will rush to get the battery before we reduce the subsidy.' Let me ask you a question. Do you think they did? No, they did not. They did not and it was a failure.

Mr PATTERSON: It got more storage than the actual policy was setting out to in the start, so how can that be classified as a failure?

The Hon. A. KOUTSANTONIS: When we put out the large battery at Jamestown, members ridiculed storage as a tourist attraction or a big banana or pineapple that people would go past and take photographs next to. Grid-scale storage is now the norm. It is the default setting for grids around the world, pioneered here in South Australia.

My focus is on bidirectional vehicles. Let me give you just a small precis of my views on bidirectional vehicles. Tesla have a vehicle that has I think 75 kilowatt hours of battery. Their Powerwall I think is 14 kilowatt hours—75 and 14. The new Nissan Leaf that is being released has a 60 kilowatt battery, but they are only allowing three kilowatt hours for bidirectional use. The Lucid, which is a brand-new electric vehicle being made by an engineer who used to work at Tesla who started his own company, is allowing 19 kilowatt hours from their 75 kilowatt battery. That is a game changer.

If one in four households in South Australia came home with a vehicle that has a range of 600 kilometres and 65 to 70 kilowatt hour batteries and if for three or four hours in the peaks they plugged in their cars and went off grid, imagine what that would do to shave off the peaks in South Australia. It would be a dramatic impact. My focus and the commonwealth government's focus is to change fuel standards, which members opposite argued against, to get more electric vehicles into South Australia and Australia, to allow bidirectional charging, to facilitate more electric vehicles and to have more renewables rolled out, which will lower prices and shave off the peaks.

What is setting the price in this country is not our energy mix, it is the peaks. We have to build the transmission distribution networks to meet peak demand, but the peaks now are being met by gas. Gas is expensive because gas is scarce, and gas is scarce because of policies the member who is asking the questions voted for. That is a very simple equation. If you liberalise and allow more gas into the system, electricity prices will fall.

Mr PATTERSON: I noticed one of the highlights in the papers was the rollout of EV chargers, which started under the former Liberal government to help with those electric vehicles. Can the minister update the committee on what the current status of the energy transition plan is?

The Hon. A. KOUTSANTONIS: That will be released before the next election.

Mr PATTERSON: What has the feedback been from industry associations to date on this paper?

The Hon. A. KOUTSANTONIS: As a direct result of the consultation from the white paper, the biggest concern industry bodies had was for firming. This is exactly why we introduced the FERM as a policy, which is currently out for consultation on the regulations and the auction process. That was the biggest outcome of that consultation.

Mr PATTERSON: In Budget Paper 4, Volume 2, page 112 under policy and programs, can the minister provide detail on the progress of the critical minerals strategy?

The Hon. A. KOUTSANTONIS: The critical minerals strategy is being progressed by the agency, but I am a big believer in 'don't look at what people say, look at what they do'. This government is spending a combined $200 million on a prefeasibility for Northern Water. Northern Water is about unlocking the most critical mineral we have in this state, which is copper. We are spending a fortune on developing to build one of the largest desalination plants in the Southern Hemisphere—in the driest state in the driest continent in the world—to get water to the Gawler Craton to unlock the processing of copper. Copper is the ultimate critical mineral as far as I am concerned.

The critical minerals strategy is one thing; critical mineral policy and development and payment is another. We are doing it and we are getting on with it. If you look at what the government is spending and unlocking, we are doing more to unlock critical minerals than almost any other jurisdiction in the country. I am very proud of what the government is doing with our critical minerals work. The paper is complete and will be released in due time.

The CHAIR: Unfortunately we have reached that time. The allotted time having expired, I declare the examination of the Department for Energy and Mining and the proposed payments for the Department for Energy and Mining complete. I thank the minister, his advisers and members of the opposition.

Sitting suspended from 10:38 to 10:53.