Hydrogen Sector

Mr PATTERSON (Morphett) (12:39): I move:

That this house—

(a) recognises the Marshall Liberal government's support for clean hydrogen and renewable energy in South Australia;

(b) commends the Marshall Liberal government for releasing South Australia's Hydrogen Action Plan in September 2019 to help scale-up renewable hydrogen production for domestic consumption and export, which will provide major economic benefits to South Australia and support the transition to a low emissions energy system;

(c) commends the Marshall Liberal government for their vision and investment in the hydrogen hub at Port Bonython, which will unlock significant investment from global energy industry leaders, create thousands of jobs and will establish Port Bonython as a domestic and international export hydrogen hub;

(d) recognises that the Port Bonython hydrogen hub will further stabilise the South Australian electricity grid and accelerate South Australia's achievement of net 100 per cent renewable energy by 2030 and generation capacity of 500 per cent of current grid demand with renewable energy by 2050; and

(e) acknowledges that the Port Bonython hydrogen hub will be a transformational legacy of the Marshall Liberal government that sets up South Australia to become a global renewable energy powerhouse.

I move this motion because it really is a good opportunity to speak in parliament today and to recognise the former Marshall Liberal government's support for not only renewable energy in South Australia but clean hydrogen. It is part of an energy solution that is not only looking at providing clean energy in South Australia but making sure that there is an orderly transition that goes with it, that it is reliable and clean as well as being affordable.

When we couch it in terms of where we are this week and the major issues facing the National Electricity Market, principally in the east coast market, those pressures are making themselves felt in South Australia. A lot of that is based around a transition making sure that there is enough generation capacity in the market and making sure, from South Australia's perspective, that as we are transitioning we are doing so in such a way that is orderly. If you go too fast one way it invariably has issues, and there are issues at the moment in the market. I think South Australia has been through them.

We do not want to see forced blackouts in South Australia and that is why the Marshall government put in place an orderly plan to make sure there was also grid stability supporting that push for renewable energy generation with capacity—grid-scale storage capacity. Even the Home Battery Scheme was very worthwhile in terms of making sure that we were able to reduce those peaks of demand which happen in the morning when families are getting ready for work and also in the early evening when they come back.

One of the main reasons why South Australia is able to look to transition to much more renewable energy resources is that nationwide South Australia has around 69 per cent of Australia's quality wind and solar generating land, from which we can generate large amounts of renewable energy. We are currently transitioning our energy system. Only in the last year we had over 60 per cent of the state's electricity generated from renewable energy.

As I said, it is important to know that this transition is done in an orderly fashion so that we create not only clean electricity but electricity that is affordable and reliable. One of the ways to make sure we do that—because, of course, the sun is not always shining and the wind is not always blowing, so the energy can be intermittent—is to make sure we are connected up with other parts of the grid. In times when we are not generating enough via these renewable sources, that allows us to source it from the east coast.

Importantly, what happens most of the time, when we are generating more electricity than is being used in South Australia, is it can be exported. Even yesterday, when we were generating more than was being used here from renewable sources, it was getting sent over to Victoria. That helps out from their perspective in terms of their generation as well. It is important that we look at this as a whole, as a nation, and not try to compartmentalise and go it alone.

A focus area was on the interconnector between South Australia and New South Wales. That was going to create a capacity of upwards of 800 megawatts between South Australia and New South Wales. As I said, it allows us to export that excess renewable energy not only now through Victoria but, when up and running, into the big New South Wales market as well. Again, that provides stability for us and for the National Electricity Market.

A key reason for doing that is that South Australia has a massive uptake of rooftop solar, with over one gigawatt previously and it is rising at about 10 per cent per year, so this is growing and growing. Our average demand is around 1½ gigawatts as a state. It can peak during summer at over three gigawatts, but we want to make sure that this rooftop solar can continue to grow. By having access to another market, that is going to encourage and enable us to continue to grow those household solar panels on roofs.

With these big solar and wind resources we have in South Australia, we are attracting massive investment from large-scale solar and wind projects. They are going to look and say, 'By setting up in South Australia not only can we supply into the South Australian market but, by having these interconnectors, we can supply into the much larger New South Wales and Victorian markets as well.' That is attracting investment and giving them certainty that they will be able to sell into a market. That has seen huge investment.

I have talked before about Neoen with their $3 billion Goyder South project. That consists of 1,200 megawatts of wind energy, 600 megawatts of solar and 900 megawatts of battery capacity. Neoen themselves have said that two-thirds of this (that is $2 billion) investment in Goyder South relies on being able to export to New South Wales. The managing director himself has said that Project EnergyConnect is vital to unlocking the full potential of Neoen's multigigawatt Goyder Renewables Zone and the significant jobs and investment it represents for South Australia.

That is an example of the sort of investment that is going on here. There is a massive pipeline of renewable energy investment that is either approved or planned that totals over 16 gigawatts and represents about $20 billion worth of new generation investment happening here in South Australia. That is going to create jobs immediately and also, by lowering electricity prices, that will have flow-on effects to make sure we can support industry in South Australia by having sufficient generation capacity here.

We know how this intermittent energy can be used, but the challenge is, as you grow, it is intermittent so it is not always on. We need to match it up with demand, so storing this intermittent energy has been important. I have talked before about some of the battery schemes that were created by the Marshall Liberal government, but another way of storing this is through hydrogen, which people see as having enormous possibilities because it can be created with renewable electricity that electrolyses the water, splits off the hydrogen and the oxygen, then significant amounts of energy can be stored in that hydrogen. That allows that to effectively become a chemical battery, and this battery can then be used later on to produce renewable energy. The great thing about this is that this green hydrogen is emissions free.

As I said, South Australia is ideally suited to seize on these vast opportunities provided by the emerging global market for hydrogen, not just the domestic market. The Marshall government recognised that in September 2019. It released a Hydrogen Action Plan at the opening of the International Conference on Hydrogen Safety right here in Adelaide at the Adelaide Convention Centre. This Hydrogen Action Plan set out 20 key actions across five key areas that were going to help scale up renewable hydrogen production for export and domestic consumption.

This plan really worked to underpin a safe and secure hydrogen export and domestic sector in South Australia. One of the first projects was at Tonsley, looking to set up a 1.25 megawatt electrolyser that then would create hydrogen. That hydrogen was blended into the natural gas network that then fed into over 700 houses in Mitchell Park.

It helps them decarbonise in using their gas, but also shows that there is a way forward to this. That then begs the question of how this can be done on a larger scale, and certainly the Marshall government was very interested in pursuing that. That ultimately led to the Marshall government bidding into the former federal government's hydrogen hubs initiative and locking down on Port Bonython as a location.

The bid submitted was over $146 million into that hydrogen hub, so that announcement by the federal government in April that they were prepared to proceed with this was fantastic news. It is a huge win for South Australia, will create thousands of jobs and establish the state as a globally significant supplier of clean hydrogen right here in South Australia. As I said, it was a partnership between the former Marshall Liberal government and, importantly, experienced global industry leaders, ones that have experience in the industry and really can be driving this initiative as well, because they have that experience and technical know-how.

Also, the partnership was with the Morrison Liberal government, the former federal government. It is looking at unlocking upwards of $13 billion worth of investment and creating thousands of jobs. The acceptance of this bid was a strong endorsement of the Marshall Liberal government's hydrogen plan for Port Bonython, but also its ambitions in the renewable energy and hydrogen space. Companies that were involved at the Port Bonython hydrogen hub with the domestic focus are Santos, Fortescue Future Industries, Origin Energy and H2U.

These were among some of the companies selected to develop and work on this hydrogen bid, but also the Port Bonython hydrogen hub is going to be a truly global project, with companies from Japan being involved as well as Canada, such as Chiyoda, AMP Energy, ENEOS Corporation and Mitsubishi Corporation, all coming together to build what is envisaged as a precinct of multiple hydrogen hub projects right here in Port Bonython.

Importantly, they are also bringing with them a significant investment of, as I said, $13 billion. They are bringing it in their own right, and in the case of some of the Japanese companies they are backed up by the Japanese government, which has a new energy development organisation. It is overseeing significant project funding in multiple hydrogen projects. It is great that two of those companies involved there are looking to locate and set up here in South Australia.

As I said before, Japan has a big ambition as well. In the hydrogen space they are looking by 2030 to increase their hydrogen use from 200 tonnes today to 300,000 tonnes. There are massive opportunities there as well, and that is why those companies are involved at Port Bonython. Looking at the scale of what this could be by 2030, these projects at the Port Bonython hydrogen hub could support up to three gigawatts of electrolysis, which is around South Australia's current peak demand. That is certainly going to help with some of the other issues that eventuate in terms of the demand curve in South Australia.

The hydrogen hub project is going to support over 6 gigawatts of new renewable energy and aim to produce up to 1.8 million tonnes of hydrogen per annum. This is a significant project to produce hydrogen from the vast renewable energy resources that we have here in South Australia. It is the perfect location for a hub here. There is also the opportunity from hydrogen that has been produced from gas in Moomba that has been sequestered and carbon captured underground to also be piped down to Port Bonython. This mixed production approach certainly will mean that the hydrogen produced there will have the ability to be cost competitive much earlier, hence increasing the success of the hub itself.

This is a fantastic initiative by the Marshall Liberal government. It will push towards the net 100 per cent renewable target by 2030, but also look to producing 500 per cent of the current grid demand in renewable energy by 2050. The Port Bonython hydrogen hub is going to build on the work of the former Marshall Liberal government in the clean energy and hydrogen space. It will stabilise the state's electricity grid, deliver cheaper reliable energy and, most importantly, leave a lasting transformational legacy from the former Marshall Liberal government that will set up South Australia to become a global renewable energy powerhouse.

Debate adjourned on motion of Mr Odenwalder.