Andrew Forrest's Squadron Energy has withdrawn its plans for a combined gas and green hydrogen power station, two years after receiving $30 million from the federal government for what was then touted as a "critical" project to keep the lights on in NSW.
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Questions sent by the Mercury to the NSW Department of Planning reveal that the project was quietly shelved in August this year.
In 2021, the NSW state government declared the 660 megawatt power plant as Critical State Significant Infrastructure, pushing the project onto a fast-tracked approval pathway overseen by the NSW Planning Minister.
At the time, the project was expected to cost $1.3 billion and the federal government tipped in $30 million in the 2021-22 budget under its Improving Energy Affordability and Reliability fund.
The initiative was touted by the then-Coalition government as a signature project in its "gas-fired recovery" with then Minister for Energy and Emissions Reduction Angus Taylor saying the project was crucial to reduce market volatility risks.
"New gas supply and generation will help re-establish a strong economy and make energy more affordable for families and businesses, while complementing the world-leading levels of renewables in Australia," he said in a press release in 2021.
Mr Taylor also dangled the prospect of further funding through the Underwriting New Generation Investments - however this program closed on October 25, 2022 without any project that received funding materialising.
A spokesperson for Squadron Energy, which is also constructing the Port Kembla gas import terminal, said the company still had plans for a "firming project" in the Illawarra, and that updated plans would be shared with the community "in due course".
"All our firming projects are being built for their short-term needs before being transitioned to support green hydrogen transportation and production."
The blow for Port Kembla's role as a hydrogen production hub comes after Shell and BlueScope also walked away from a memorandum of understanding that would explore a 10 MW hydrogen electrolyser for the use of green hydrogen in the steelworks in August last year.
Green hydrogen produced from renewable electricity is touted as playing a critical role in the decarbonisation of hard-to-abate sectors, such as steel making and concrete production, as well as providing an alternative to batteries for heavy transport.
Earlier this year, Coregas opened its first hydrogen refuelling station within the Port Kembla steelworks, with waste contractor Remondis rolling out a hydrogen-powered garbage truck. The hydrogen produced at Coregas is called 'blue' - due to being produced from natural gas.
Industrial conglomerate BOC received $28.5 million for hydrogen production in Cringila, however the project awaits final investment decision by the BOC board.
At the annual general meeting of mining giant Fortescue, which is also owned by Squadron Energy's owner, Andrew 'Twiggy' Forrest on Tuesday, the company vowed to invest $1.1 billion in green energy projects, including green iron and green hydrogen. The two green hydrogen projects are in Queensland and the United States and the green iron project is in Western Australia.
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