The first hydrogen to power the Tallawarra B turbine should be made in the Illawarra, EnergyAustralia MD Mark Collette has said.
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Six months from completion, the company behind the dual natural gas-hydrogen peaking power plant is hopeful that by 2025 it can run on locally made green hydrogen.
It's an ambitious schedule, but after the curve balls that have been through Tallawarra B's way during the past year of construction, you think they might just pull it off.
Sitting on the shores of Lake Illawarra, the Tallawarra B power plant hopes to be the flagship project of the future of electricity, after its predecessor on the same site first brought reliable electricity to the Illawarra.
In 1954, the original Tallawarra coal-fired power station opened. By 1961, the power station was providing 320mW of power to the Illawarra after decades of intermittent supply, characterised by blackouts and electricity delivered at times by running tugboats off Port Kembla harbour.
The construction of Tallawarra was essential for the industrialisation of the Illawarra, and the wider post-war industrialisation of Australia.
Seven decades on, the Tallawarra B project signals the next phase of power and industry in the Illawarra, and Australia.
Sitting alongside the gas-powered Tallawarra A, the power station will initially run on natural gas and operate as a peaking power plant, delivering electrons to the grid during periods of peak demand when renewable capacity is limited.
Its scheduled opening in October could not come soon enough, with the closure this week of Liddel Power station in the Hunter. This takes about 1000mW out of the NSW grid. Tallawarra B will deliver 316mW to help fill the gap.
The design of Tallawarra B is a world first. The power station is the first in the world to run a particular dual gas-hydrogen turbine produced by GE and one of the first in the world to run on both fuels. But while there is a sense of quiet, focused energy on site near Yallah this week, getting to this point involved some white knuckle moments.
After construction began in February 2022, the Illawarra experienced the wettest year on record. Construction projects throughout the region were delayed, leading in some cases to builders collapsing, and at Tallawarra, the site didn't so much as flood, pits turned into swimming pools.
"The ground still feels wet out there," Mr Collette said. "It has meant doing the work that can be done in the wet and saving the work that can only be done in the dry."
After work got back up and running later in the year, one of the major contractors delivering the project went into administration. On December 5, the South African owners of Western Australia contractor Clough, which was also delivering major infrastructure projects such as Snowy Hydro and Inland Rail, announced the company was going into voluntary administration.
Increasing pressure in the tight construction market forced the business to the wall, but Mr Collette said with NSW's energy future depending on Tallawarra B to keep the lights on during the 2023-24 summer, delays were not an option.
"We took a decision upfront that we were going to do everything we could to preserve the progress of the project."
EnergyAustralia stepped in to fund the contractors who were on site to continue working, so no days were lost. Mr Collette was tight lipped on what the extra cost was but said that delays would have cost more.
"The main thing we're focused on is delivering to the schedule," he said. "The project overall has faced additional costs and risks.
"Projects like this, if you get big disruptions, they become very big and costly and very difficult to recover from."
Italian firm WeBuild eventually bought the stricken Clough, enabling work to continue on the company's Australian projects and in late April, with the turbine installed and construction continuing on the superstructure, roughly 300 workers are on site, including 190 from the Illawarra.
While workforce shortages have affected other Illawarra industries, Mr Collette said outside of specialist skilled workers that had to be brought in from elsewhere, being a leader meant local companies were looking to contribute to the project where they can.
"A lot of contractors want to work on the energy transition, and so they were quite keen to come to work on Tallawarra, particularly knowing that we were seeking to put hydrogen in more quickly than just about anyone else in the country," he said.
"They're really excited about the project, the state, national and regional significance."
It's a project that doesn't just hold significant for the Illawarra. Mr Collette said EnergyAustralia's Hong Kong owners CLP Holdings were watching Tallawarra as an indicator of how other generators around the world can run on hydrogen. But while the turbine may be installed and ready to run, actually sourcing the hydrogen is the next challenge.
"There's a lot of presentations around hydrogen, there's not a lot of committed projects yet they've got to final investment decision, much less construction. We're in construction."
With 2025 the start date to feed in green hydrogen to the gas powered generator, Mr Collette said he was hopeful just as the previous Tallawarra power stations were run on local coal, the next power station would run on local hydrogen.
"We'd like to put hydrogen into the mix from 2025, in order to do that, we'd like to buy renewable hydrogen," he said.
"I hope we can get locally produced green hydrogen, [but] that's yet to be determined."
The Illawarra already produces hydrogen from non-renewable sources at the BOC plant in Cringila, and the CoreGas plant in Port Kembla will soon begin powering vehicles with hydrogen. But although there are plans to scale up, both sites are in their infancy in terms of producing green hydrogen on the scale eventually required for Tallawarra.
"The supply chain to produce hydrogen is still not there yet," Mr Collette said.
On top of the logistics of actually producing the hydrogen, the electricity grid will not only need to increase the amount of renewables to offset the closure of coal-fired power stations, but provide the massive amounts of energy to run electrolysers to separate oxygen and hydrogen from water.
"The speed of the energy transition in Australia has not matched the ambition," Mr Collette said. "At the moment we are around 30 per cent renewable electricity, the goal articulated by the federal government is 82 per cent by 2030, that's just to meet domestic supply.
"If you add on a big chunk of hydrogen, in addition to that, that 50 per cent gap is an enormous number of projects when the supply chain for wind turbines are getting longer, and the need to connect more transmission needs to happen in a way that it hasn't [so far]. The delivery timeframes appear to be blowing out.
"If Australia is producing renewable electricity, do we first use that for domestic consumption or for hydrogen? If we can over-perform as a country and put in more renewables, and increase the pace, then we can do both, but that's the challenge ahead of us."
So far, while the NSW government has committed funding to support BOC's hydrogen plans at Cringila, the Illawarra has been overlooked for funding under the federal government's Hydrogen Hubs scheme.
This is despite the Illawarra already having a nascent hydrogen industry, and major demand for the gas not only from Tallawarra, but BlueScope's plans for green steel in the future, which would likely require green hydrogen to replace coking coal.
While Mr Collette said it was up to the federal government to answer why the Illawarra wasn't included in its hydrogen hub scheme, he said the parts of the puzzle were present in the Illawarra.
"Our activities are all about creating a demand that helps suppliers come into the system."
Outside of Tallawarra, Mr Collette said there was a role for major utilities in coordinating the uptake of rooftop solar and domestic-scale batteries to support the functioning of the grid. With local initiatives such as Electrify 2515 and Hi Neighbour seeking to add more renewable electricity into the local grid, and support the electrification of households, the distribution of electricity production and storage from major power plants to rooftops and garages requires a new approach to coordination.
"Australia is not the only country dealing with this," Mr Collette points out. "Texas has quite a lot of home batteires, and the grid operator there now struggles to forecast demand as accurately because they can never predict what the batteries are going to do."
Without peeking 'behind the meter' Mr Collette outlines that government regulators, such as the Australian Energy Market Operator have a role in working with major retailers such as EnergyAustralia, to provide flexibility in generation capacity.
As part of the environmental approvals for the Tallawarra B works, the hill below Mount Brown Reserve will be rewilded, with plantings of eucalypt along the ridge line. Numerous middens were found in wooded areas around the power station, attesting to the long-term use of the site by Aboriginal people in pre-colonial times.
These sites will be preserved while the steel skeleton transmission towers that connected the former coal-powered power station will be replaced with lower-profile concrete poles.
But, one transmission tower will remain. For the past 15 years a family of ospreys have made a home in the tower on the eastern side of the site. Until they find another home, the tower will remain, providing a link back to when electricity was first generated on the shore of Lake Illawarra and beyond, to what comes next.
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