Illawarra industry to lead energy transition

Speaking at a joint Illawarra First and i3net event, hosted at the University of Wollongong's Innovation Campus, Mr Taylor said it was up to industry, not government, to come up with solutions to decarbonise energy and manufacturing.

"The scarce resource for me is great projects," Mr Taylor said.

The Minister's comments come as the energy debate heats up once again, with CEO of Bluescope Mark Vassella saying that the closure of power plants such as Eraring without a transition plan puts at risk the steelmaker's vision for low carbon green steel in Port Kembla.

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In this context, Minister Taylor said the federal government was focused on the immediate obstacles facing industry and the energy grid.

"Long term goals are enormously important and our focus on net zero is important, but we also have to focus on the road in front of us. There's no point planning green steel and green aluminium into the future if high energy prices decimate the industries that we're in today."

The NSW government has committed to replace the generation capacity of Eraring with two large scale batteries and the Australian Energy Market Operator (AEMO) has said there is enough generation capacity planned to absorb the loss of the Central Coast power station.

Mr Taylor disputed that these technologies would suffice and that power bills would rise as a result of the closure, putting pressure on energy intensive industries such as steelmaking.

"A 700 mW/h short duration battery simply doesn't replace a 2800 mW coal-fired power station. And indeed, in the absence of replacement, we know prices will go up and people will pay the price in their bills and industry will pay the price."

Mr Taylor said that the federal government's projects such as Snowy 2.0, transmission links to Tasmania and further gas generators would be needed to fill the gap.

The potential for the Illawarra to play a part in these debates has often led to discussion over the role of hydrogen for energy storage. Green hydrogen, produced with renewable energy in the Illawarra, could be then converted to electricity through power stations such as Tallawarra B, which otherwise would run on natural gas, or used in manufacturing or for transport.

Mr Taylor would not commit the federal government to supporting particular hydrogen projects in the Illawarra, noting instead that the government would invest when industry proposed projects.

"I strongly suspect we're going to see some great projects here in Wollongong, we'll certainly be watching very closely, and we'll invest where those opportunities are," he said.

"We're committed $21 billion to low emissions technologies, I'd like to see the fair share of that going to the Illawarra region."

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