First green hydrogen + gas plant to be built in NSW, ‘kick starting’ hydrogen industry to coincide with loss of major dispatchable asset


EnergyAustralia’s 316 MW ‘Tallawarra B’ hydrogen and gas power station will be built beside the company’s existing gas power plant in Yallah, near Wollongong on the NSW south coast. Supported by $80 million of government money, the company is describing it as Australia’s first “net zero emissions” hydrogen and gas capable power plant.

The peaking station, which will be called on in times of high electricity demand, will run on a mixture of green hydrogen and natural gas. GE is set to supply the plant’s turbines, which it says will operate on a blend of around 5% green hydrogen.

Given that, EnergyAustralia expects to be buying around 200,000 kilograms of green hydrogen annually from 2025. EnergyAustralia’s Managing Director, Catherine Tanna, said the company plans to undertake engineering studies to increase the amount of hydrogen in the fuel blend to further ‘green’ the peaker plant over time.

Tallawarra B’s greenhouse gas emissions will be “fully offset” over its operational life, Tanna added.

The expansion of EnergyAustralia’s Tallawarra power station with the new hydrogen addition follows an agreement reached with the NSW government, which will see it provide $78 million in funding. The federal government have committed a further $5 million to make the project “hydrogen-ready.”

The Clean Energy Council described itself as “disappointed” with the plan, saying public money should not be used to underwrite fossil fuel generators.

Australia’s dispatchable electricity problem

Tallawarra hydrogen and gas power station will be the first dispatchable energy peaker project to be built in the state in over a decade, according to Australia’s Minister for Energy, Angus Taylor.

On Friday, the Energy Security Board published its Post 2025 Market Design Options Paper. In it, the Board highlighted one of the main issues Australia will face as it decarbonises is the loss of dispatchable energy assets, which typically run on fossil fuels. One of the ways it posited smoothing this transition would be to essentially subsidise coal plants to remain open for the sole purpose of providing the National Electricity Market access to dispatchable energy (essentially, electricity on command by way of burning) in periods of high market demand or low renewable output.

Unsurprisingly, the proposal has attracted criticism.

Hydrogen, though, may offer an interesting solution. Unlike other renewable sources, like solar and wind, it is dispatchable and can be stored and called on when needed. In a briefing session about the Options Paper held today, the Energy Security Board’s Chair, Kerry Schott, said that “in due course” hydrogen may well replace natural gas as Australia’s primary dispatchable energy source. As it stands, however, the technology and infrastructure needed for that are not yet available.

Governments seeking to shore up power supplies

In its statement this morning, Angus Taylor’s office said the federal government had “called on the private sector to step up” with plans to provide up to 1,000 MW of dispatchable electricity generation in response to the impending closure of Liddell power plant, one of the country’s largest generators.

So far, it seems EnergyAustralia’s Tallawarra B plant is the first to answer such calls. The plant will provide the state with improved energy security, reliability and flexibility, EnergyAustralia’s Managing Director, Tanna, said.

“Our new open-cycle, hydrogen and gas capable turbine will provide firm capacity on a continuous basis and paves the way for additional cleaner energy sources to enter the system.

“The station will be operating in time for the summer of 2023-24, following the closure of the Liddell power station, and it will help to kick start the green hydrogen industry,” she added.

Tanna announced her retirement last week, becoming the latest in a number of top energy executives to leave their positions in April as transition plans ramp up. 

The NSW state government has also sought reliable electricity supply alternatives as Liddell’s closure draws closer. For instance, it has jointly underwritten a transmission interconnector upgrade between NSW and Queensland, and has also committed $75 million for its Emerging Energy Program to provide grants for new dispatchable generation.

The state’s prominently progressive Minister for Energy, Matt Kean, described the Tallawarra project as setting a “new benchmark for how gas generators can be consistent with NSW’s plan to be net zero by 2050 by using green hydrogen and offsetting residual emissions.”

Region in transition

The Illawarra was built on the back of coal and, as with state’s northern Hunter region, there is growing tension between the need for a clean energy future and the generations of coal miners and coal mining companies which have centuries-long roots in the region.

This year, the Independent Planning Commission (IPC) made a historic decision to block South32’s Dendrobium coal mine extension. The monumental and, for many, shock decision came just months after mining giant Peabody was given the green light to undertake a controversial long-wall mining operation directly below Woronora Dam, a Sydney drinking water catchment area.

The sagas around coal mining extensions being granted by the NSW government even as it targets net zero emissions by 2050 exemplifies Australia’s ongoing strain between necessary future and profitable past. One of the ways governments and industries are seeking to redirect this old loggerheads is by repositioning traditionally coal exporting regions as renewable energy hubs.

In the Illawarra, this includes plans to transform Port Kembla (Wollongong’s port) into a hydrogen hub and exporting epicentre. Presumably, the hope is that both infrastructure and workers can be redeployed in the new industry.

In the instance of EnergyAustralia’s Tallawarra B, the gas and hydrogen power station is expected to contribute $300 million to the economy, create 250 well-paid jobs during construction and power to around 150,000 homes.

This content is protected by copyright and may not be reused. If you want to cooperate with us and would like to reuse some of our content, please contact: