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Legislative Council - Fifty-Fifth Parliament, First Session (55-1)
2025-04-02 Daily Xml
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Hydrogen Power Plant

Adjourned debate on motion of Hon. N.J. Centofanti:

1. That a select committee be established to inquire into the government's election promise to deliver a hydrogen power plant, with particular reference to:

(a) major commitments within the Hydrogen Jobs Plan, including, but not limited to, the generators, hydrogen electrolysers, storage options;

(b) costings of key elements of the Hydrogen Jobs Plan, including operational and capital costs;

(c) timeline of the deliverables identified within the Hydrogen Jobs Plan, including current progress;

(d) the quantity, price and timing of hydrogen required to supply industry, and the viability of any alternative sources of energy;

(e) what is the best use of hydrogen produced by electrolysis, if any, at this stage of its development;

(f) investigating the challenges hydrogen power projects across Australia, and the world, are experiencing;

(g) what is the full cost and activities undertaken by the Office for Hydrogen Power SA; and

(h) any other related matters.

2. That this council permits the select committee to authorise the disclosure or publication, as it sees fit, of any evidence or documents presented to the committee prior to such evidence being presented to the council.

(Continued from 19 February 2025.)

The Hon. J.E. HANSON (17:15): Another opportunity to talk about hydrogen. On this occasion though, we are going to be opposing it. It is not going to shock anyone; we are going to be opposing this.

Members interjecting:

The Hon. J.E. HANSON: 'Shame', they say. 'Shame' are the calls from the other side. Well, we will get back to that, won't we? Given the recent developments in Whyalla, I think it really goes without saying that the timing of this call for a select committee is pretty poor and lacks a bit of vision. The South Australian government has deferred the Hydrogen Jobs Plan to prioritise stabilising the Whyalla Steelworks and transitioning towards a sustainable long-term future. That has been deferred.

We know that actual spending for the Hydrogen Jobs Plan is disclosed in the Office of Hydrogen Power's annual report, which is around about $63 million. Of this, a significant portion was a direct payment for turbines, which will—will—be recouped. The total GE turbine value is about $249 million. It is, of course, a first-of-its-kind gas turbine capable of running on hydrogen fuel. These turbines will be onsold for the original purchase price or higher, with the guarantee that they will be installed in South Australia to provide additional generation capacity.

That amount also includes capitalised salaries which will work on other projects in the Office of Hydrogen Power, such as hydrogen industry development at the Port Bonython Hydrogen Hub, which is a project that was championed by, oh, that is right, the former Liberal government, and which continues to be praised by the current opposition.

Just to remind my colleagues on the other side who had some interesting comments to make earlier on, I will just quote some of those. The member for Morphett, Mr Stephen Patterson said on 5 May 2022:

I would like to take this opportunity to speak in parliament today about the fantastic federal government announcement last Friday of the Marshall Liberal government's successful $146.5 million Port Bonython hydrogen hub bid. This is a huge win for South Australia that will create thousands of jobs and establish South Australia as a globally significant supplier of clean hydrogen. It really is a great initiative of the former Marshall government.

The Hon. I.K. Hunter: This was the Liberals?

The Hon. J.E. HANSON: This was the Liberals. But Stephen Patterson actually even before that said on 5 December in 2019:

…hydrogen really has a fantastic ability. It is going to provide clean energy going forward, and it will support the transition to low-emissions energy across not only electricity but also potentially going forward heating transport and industry as well.

That is high praise from the member for Morphett, who I understand is a shadow minister at this point. Further than that, of course, we have got the member for Hartley back on 23 June 2021 saying that hydrogen has emerged as an area of future growth.

The Hon. I.K. Hunter: Who's the member for Hartley?

The Hon. J.E. HANSON: Vincent Tarzia is the member for Hartley, the Hon. Mr Hunter.

The PRESIDENT: The Hon. Vincent Tarzia.

The Hon. J.E. HANSON: Yes, the Hon. Vincent Tarzia, Mr President. You correct me correctly. The Hon. Vincent Tarzia seems also to be quite the fan of hydrogen as well, so it just seems a little bit odd now that I am getting some of these interesting comments from my colleagues across the chamber here in regard to hydrogen and their concerns about it, which do not seem to be shared by their lower house colleagues. Maybe they should pick up the phone. The domestic production—

Members interjecting:

The Hon. J.E. HANSON: They are trying to talk their way out of it now, Mr President, but that is okay, it is on Hansard. The domestic production of structural steel is critical—

Members interjecting:

The PRESIDENT: Order! The Hon. Ms Girolamo, if you want to speak on this, list yourself.

The Hon. J.E. HANSON: I appreciate your protection, Mr President. The South Australian government, as I said, has deferred the Hydrogen Jobs Plan to prioritise stabilising the Whyalla Steelworks, something I know that will be very close to your heart, Mr President. The domestic production of structural steel, as I have made comment on here before, is critical to our national interest and, indeed, our national security.

Sovereign steel is how Australia can build its infrastructure, be that railways, defence assets, hospitals, housing, transmission bridges, things like that. Without it, we would rely on steel and capability from overseas amid what I think is a pretty increasingly uncertain international climate and, indeed, a national housing crisis.

The Whyalla Steelworks is one of only two Australian steelworks. It produces 75 per cent of Australian structural steel and 100 per cent of the nation's domestic long steel products, for instance, rail, which is pretty critical also for defence and transport sectors. That capability quite simply, and to put it very simply, is just too important to lose. The Malinauskas Labor government and, indeed, the Albanese Labor government have partnered together to invest $2.4 billion to secure the Whyalla Steelworks, and this will include a $1.9 billion investment for upgrades and new infrastructure, which is pretty vital to ensuring the steelworks has a sustainable and long-term future.

The state government remains committed to the establishment of a hydrogen industry in Australia. The world wants green iron and steel, and hydrogen will play an important part in that transition. But South Australia can only manufacture green steel with a strong, sustainable Whyalla Steelworks, and that simply must be our priority.

I once again echo what I said back at the start, which is that the timing of this call for a select committee, given recent developments in Whyalla, is very poor. We will be opposing it and, as I said, maybe the members opposite here might want to give their lower house colleagues a call about the level of interest in hydrogen in their party.

The Hon. J.S. LEE (17:22): I rise today to support the motion introduced by the Hon. Nicola Centofanti calling for the establishment of a select committee to investigate the Labor government's hydrogen power plant commitment. The parliamentary inquiry is essential to ensure accountability, transparency and responsible management of taxpayer funds. The Malinauskas Labor government promised South Australians a significant reduction in power prices, sustainable economic growth and leadership in renewable energy through their Hydrogen Jobs Plan.

Unfortunately, what we are witnessing instead is a troubling pattern of unmet promises, excessive expenditure and minimal tangible outcomes. As highlighted by a recent article published in The Advertiser on 26 March 2025, global commodities giant Trafigura recently abandoned a proposed $750 million green hydrogen project plan for the Nyrstar Port Pirie smelting facility. This substantial cancellation, attributed to prohibitive construction costs and insufficient market demand, underscores a concerning trend.

Similar significant hydrogen projects, including the AGL Torrens Island Green Hydrogen Hub and Neoen Australia's Hydrogen Superhub at Crystal Brook, have either stalled or been indefinitely deferred. The state government's flagship $600 million Whyalla hydrogen plant has been shelved, with most of the funds being redirected to its Whyalla Steelworks support package. However, the government has confirmed that the Office of Hydrogen Power SA will continue to operate, focusing on exploring and facilitating new investment opportunities in the hydrogen sector.

Despite the evidence, setbacks and lack of practical progress, more than $130 million in taxpayer money has already been expended by the Office of Hydrogen Power SA. These funds have primarily covered substantial executive salaries, consultant fees and extensive engineering and feasibility studies without delivering any meaningful outcomes.

South Australians were assured that this investment would bring actual benefits, yet today we see little to no evidence of substantial progress, raising significant questions about financial stewardship and strategic management. The impacts of these unmet commitments are felt profoundly by communities and industries, particularly in regional areas like Whyalla, where economic stability and future prospects have been tied directly to these ambitious but elusive hydrogen projects.

Families and businesses of South Australia now face uncertainty, compounded by the persistent reality of high energy costs despite promises of affordability. Indeed, the scale of public spending and the government's lack of clear outcomes of measurable achievements highlights the critical need of a rigorous oversight. South Australians deserve clarity on precisely what outcomes, if any, have been achieved by the Office of Hydrogen Power SA, and whether continued public investment is justified. Therefore, I fully support this motion.

A select committee would ensure thorough scrutiny of this project's commitments, cost, viability and actual achievements. Transparency is paramount if we are to maintain public trust and ensure responsible use of taxpayer funds. We owe it to every South Australian to hold the government accountable for their spending decisions and ensure genuine progress towards a sustainable energy future. With those remarks, I commend the motion.

The Hon. R.A. SIMMS (17:26): I rise to indicate that the Greens will not be supporting the select committee. I understand the concerns that the opposition has in relation to this proposal and, indeed, I did call for there to be a committee established back when the hydrogen bill was originally put forward. However, since that time, the government has announced a major shift in terms of the policy approach that they are taking, with a reorientation towards Whyalla, and so the plan has been significantly scaled down.

The Liberal Party have also, since that time, made it clear that they want to just abolish the Office of Hydrogen in its entirety. The question I have then is: what is the purpose of an inquiry? If you already have an end goal in mind, what is the purpose of an inquiry? It seems to me that this is going to be used as yet another opportunity for them to undermine renewables, and another opportunity for the climate deniers in the Liberal Party to get a platform.

On that basis, the Greens will not be supporting the committee but, of course, we will continue to urge for transparency in terms of how this matter is dealt with. I recognise the Budget and Finance Committee has the capacity to look into this, and I hope that there will continue to be some level of transparency around this, but a forum to attack and undermine renewables is really not the best way forward.

The Hon. S.L. GAME (17:28): I rise to support the motion of the Hon. Nicola Centofanti in accordance with my previous comments in this chamber regarding the government's Climate Change and Greenhouse Emissions Reduction Bill, when I highlighted the global and national market movement away from investing in green hydrogen, and the implications for the government's election promise to deliver a hydrogen power plant.

It is also worthwhile repeating my previous reference to Zoe Hilton, the senior energy policy analyst at the Centre for Independent Studies, who stated:

Green hydrogen was always a pipe dream—the economics simply don't stack up and it's unlikely they ever will.

Such comments highlight the need to maintain the scrutiny on the government's plans and expenditure post Whyalla given the ongoing cost to taxpayers of the 55 staff in the government's hydrogen office, and the chief executive's annual salary of $600,000, as well as the recent announcements that the $750 million green hydrogen project in Port Pirie has been axed.

The fact that most of these multimillion-dollar green hydrogen projects rely on government funding, and that so many projects continue to be abandoned across the country and globally, raises serious questions about the waste of taxpayer dollars on these pipedreams. With that, I confirm my support for the honourable member's motion.

The Hon. N.J. CENTOFANTI (Leader of the Opposition) (17:30): I would like to, first and foremost, thank all the honourable members who have contributed to the debate—the Hon. Justin Hanson, the Hon. Jing Lee, the Hon. Rob Simms and the Hon. Sarah Game. In summing up, it is disappointing that the Greens have ultimately chosen to side with the government to block this important motion. This was a genuine opportunity, I think, for transparency and accountability on a major public investment, an investment that, whilst it has been delayed, according to the Premier, has not been scrapped and therefore taxpayers continue to fork out for bureaucrats sitting in the office of hydrogen doing I am not sure what, to be honest.

We all know that the hydrogen power plant is certainly a vanity project for the Premier, rather than a sound energy strategy. Around the country and across the globe, both private businesses and governments are walking away from hydrogen power plants because they simply do not stack up financially, technically or environmentally. As the Hon. Jing Lee pointed out, even last week we saw Trafigura cancel its $471 million green hydrogen plant at Port Pirie, citing economic challenges and limited market demand, yet here in South Australia the Malinauskas government seems intent on continuing to push ahead with little scrutiny, no clear business case and mounting concerns about viability.

South Australians deserve to know how their money is being spent, what the actual costs are, whether the promised outcomes are achievable, and if this technology is truly the best use of our resources at this stage. Instead of welcoming the proper oversight, the government has effectively shut it down, unfortunately, with the Greens' help. I do think it is a missed opportunity to ensure that public policy is transparent, evidence based and genuinely in the best interests of the people of South Australia.

The council divided on the motion:

Ayes 7

Noes 9

Majority 2

AYES

Centofanti, N.J. (teller) Game, S.L. Girolamo, H.M.
Henderson, L.A. Hood, B.R. Lee, J.S.
Pangallo, F.

NOES

Bourke, E.S. El Dannawi, M. Franks, T.A.
Hanson, J.E. Hunter, I.K. Maher, K.J. (teller)
Ngo, T.T. Simms, R.A. Wortley, R.P.

PAIRS

Hood, D.G.E. Martin, R.B. Lensink, J.M.A.
Scriven, C.M.

Motion thus negatived.

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