Premier Peter Gutwein said the state has the energy to power Fortescue Future Industries' proposed Bell Bay hydrogen plant, but it would need to draw energy from elsewhere to do it.
Hydro Tasmania had reportedly previously told project proponent Andrew Forrest the state did not have the spare energy capacity to supply to the 250-megawatt plant.
Mr Gutwein told a budget estimates committee on Monday said there would be a window of five to six years before there was a significant energy load needed for proposed hydrogen projects.
"We can provide green energy if we want today, but it would mean taking green energy from somewhere else in Tasmania," he said.
A Hydro Tasmania spokesman said the company was ready to help businesses capitalise on opportunities provided by the state's clean energy.
"We continue to work with current and potential new major industrial customers on commercial arrangements for their projects," he said. It was announced on Monday that Hydro chief executive Evangelista Albertini would resign from his position after less than 18 months in the role for personal reasons.
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Mr Gutwein denied under questioning from Labor that he or the government had intervened in negotiations between Hydro and FFI or provided a formal direction to the state-owned company.
"But I'll make this point very clearly in terms of our government businesses - government needs to direct its government businesses to do or more engage more fully to whole-of-state outcomes," Mr Gutwein said.
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