Grievance Debate

GFG Alliance

Mr PATTERSON (Morphett) (15:14): I travelled to Whyalla last week with the Leader of the Opposition and the shadow treasurer to meet with some of the many contractors who are impacted by the crisis in Whyalla and are owed money by GFG. It was clear from those meetings that the people of Whyalla are over the promises, they are over the grand visions, and they just simply want to get on with work and create steel. They have lost faith in GFG and there is a major trust deficit which can only be overcome by GFG paying their debts.

It was also clear that they have been misled by the Premier and this Labor state government that has been totally distracted by a green hydrogen promise over the last four years. In 2021, the Premier promised a green hydrogen power station and since then we have seen that hydrogen plan delayed and downgraded, with the Premier making changes on the go. Worse, we have seen global energy companies walk away from their hydrogen plans while the Premier arrogantly pushes on regardless of the cost to South Australian taxpayers.

Twiggy Forrest announced Fortescue will pull back on their hydrogen plans because of how expensive hydrogen is. Woodside Energy has backed away from their plans for hydrogen. Origin Energy abandoned their hydrogen venture, with Chief Executive Frank Calabria saying, 'There remain risks and both input costs and technology advancements to overcome.'

A major element of the input costs for hydrogen projects is the electrolyser equipment that produces the hydrogen. Credible organisations such as the US Department of Energy, S&P Global, and Bloomberg have each released reports showing that the cost of electrolysers has surged since 2021. Of course, in 2021, next to a big picture of the now Premier, Labor's hydrogen policy document promised Labor will build 250-megawatts capacity of hydrogen electrolysers. It will be operational by 2025 and it will cost $220 million. That is $880,000 per megawatt.

Recently, Australia's CSIRO released their draft 2024-25 GenCost report which showed that electrolyser costs have surged by over 41 per cent in the last year alone and now have a unit cost of $2.7 million per megawatt. That is three times more per megawatt than what Labor promised. If we use the CSIRO's costings for hydrogen electrolysers, a 250-megawatt alkaline electrolyser would cost $676 million—not the $220 million that Labor claimed.

That cost, of course, exceeds the entire $593 million budget that Labor is still clinging to three years later. This massive $456 million blowout sends the project surging past $1 billion for a hydrogen power plant that will not bring down household energy bills for struggling South Australians.

The Malinauskas Labor government has repeatedly withheld the costs over the last three years, citing the process is in procurement, but they know about these massive cost increases for electrolysers and they are lying to South Australians about the true costs. But their actions reveal this lie. They certainly do not have any intention of powering the turbines on hydrogen to start with because in September last year they went out to tender to run the turbines on gas. That gas was going to be delivered by road trains of diesel-powered B-double trucks. That was never part of the plan and again Premier Malinauskas is making it up as he goes. No wonder we have record electricity prices in South Australia.

It should also be noted that this tender went out for the B-double trucks before the issues at Whyalla started to escalate. Now we have the government using a very major crisis in Whyalla to back away from their hydrogen promise. Let's be clear: the government's hydrogen plan was a government initiative to generate electricity using hydrogen. There was no mention of GFG in their policy document and there was only one mention of green steel in the 20-page document.

We now have a state government desperately trying to create a scapegoat to blame for their own pre-election promise. They know that this green hydrogen dream is now a green nightmare. The nail in the coffin was the Queensland government pulling away from their hydrogen venture, again because of surging input costs. The Premier's hydrogen promise is in disarray and he now needs to come clean with the people of South Australia about the true cost of his hydrogen hoax.