Tasmania's energy security and its potential hydrogen power industry are under threat, a gas company is warning state MPs.
The Tasmanian Gas Pipeline company has written to Labor Leader Rebecca White and Shadow Finance Minister Dean Winter to make the Opposition "fully aware of the threat to Tasmania's energy security" from Hydro Tasmania's position to replace the gas transportation agreement expiring on December 31 and to seek their help "influencing the Tasmanian government to not decommission the Tamar Valley Power Station combined cycle gas turbine".
The combined cycle is the "big unit" at the power station, which proved crucial in keeping on the lights in the 2016 energy crisis when low rainfall hit Hydro storages and the Basslink interconnector to the mainland failed.
In the letter, obtained by this newspaper, Tasmanian Gas Pipeline director Lindsay Ward said Hydro had advised it did not require any gas transportation capacity for the combined cycle "despite TGP informing Hydro that TGP would be forced to shut down and remove physical gas transportation access to the CCGT delivery point, with the equipment to be redeployed and installed at another site where a return on the investment in the equipment can be made".
He said re-establishment would typically take up to 24 months.
"It is not an option for the Energy Minister to simply bat this issue off to an arbitration process, as the minister did four years ago," Mr Ward wrote.
"This time around, it is solely about Tasmania's energy security and not a stalled commercial negotiation.
"It should not be left up to Hydro Tasmania, given their actions last time directly led to the energy crisis, and it should definitely not be left to an independent third party arbitrator to decide on Tasmanians' energy security needs."
On September 1, Energy Minister Guy Barnett said energy security remained a high priority.
"Importantly, the Tamar Valley Power Station remains available to play a role should any energy security challenges emerge in the future," he said.
On Monday, he said: ``Hydro Tasmania is currently in commercial negotiations on its next gas transportation contract and it would not be appropriate for the government to comment on the details of these negotiations while they are still under way."
``But I want to be absolutely clear that Tasmania's energy security is on a very solid footing, with dam storage levels currently at a healthy 51.4 per cent, the highest levels since 2014.
``What this shows is that the Energy Security Risk Response Framework, which the government put in place in legislation by way of amendments to the Energy Co-ordination and Planning Act 1995, is clearly working effectively.
``Our target to grow our on-island renewable generation to 200 per cent of our baseline of 10,500 gigawatt hours will further enhance our energy security.
``The government will not sell or privatise the Tamar Valley Power Station and any suggestion otherwise is simply untrue."
Hydro interim chief executive Ian Brooksbank said the Tamar Valley Power Station combined cycle gas turbine was one of five units that remained available for use.
"Hydro Tasmania has no plans to decommission it," he said.
"Stating otherwise is not correct."
He said the gas transportation agreement negotiations were commercial in confidence and required all parties to act in good faith.
"While the Tamar Valley Power Station remains an important back-up generation option, with more on-island generation coming online in recent years, we are using a lot less gas than we have historically," he said.
"Our negotiations are focused on achieving the best possible outcome for Tasmanians, which means achieving both energy security and a commercial deal that reflects our lower use of gas."
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