More wind farms will need to be added to Tasmania's energy grid for the state to be able to power a new "green" hydrogen and ammonia production sector at Bell Bay.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
Hydro Tasmania executives were questioned about negotiations with some of Australia's largest energy companies - Fortescue, Woodside, Origin and ABEL - as part of a Legislative Council government business enterprise hearing last week.
Murchison independent MLC Ruth Forrest questioned whether the new hydrogen industry would require 20 per cent of Tasmania's annual electricity output, but exact gigawatt capacity requirements are yet to be determined.
Hydro Tasmania acting chief executive officer Ian Brooksbank said the plan was to have more wind farms add to Hydro's dispatchable power capacity.
"Future industries like hydrogen will be reliant on new wind development for their energy supply, however these industries need a constant electricity supply, which would be interrupted when the wind stops blowing," he said.
"That's where hydro power and Hydro Tasmania comes in.
"We are meeting a number of different hydrogen proponents, they all have different plans for the state and for their assets, so I can't reveal the conversations we've had around the volumes of capacity that they're looking to build."
Hydro's dealings with Fortescue have been challenging, with chairman Andrew Forrest publicly claiming he would take his business elsewhere if he could not negotiate a lower price.
Ms Forrest questioned whether offering discounted power prices amounted to a public subside of some of Australia's most profitable companies.
"If you're selling at a lower price to produce hydrogen when you can get a much higher price - or a notionally higher price - selling it into the National Electricity Market when the prices are up, surely that is a subsidy?" she said.
"You're using that energy to produce hydrogen in this state for the benefit of a private company and the energy cannot then be used to sell over Basslink or Marinus Link."
Resources Minister Guy Barnett said Hydro's role in the negotiations was to reach an outcome that ensured its sustainability and profitability.
He said the hydrogen sector would provide "economies of scale".
"We also know that they deliver jobs, growth, development and opportunity for Tasmania and we have to take that into account as well," Mr Barnett said.
Fortescue and TasPorts signed an option agreement for a 20-hectare piece of land at Bell Bay in June. The company was believed to be looking at the 12-gigalitre Curries River Reservoir for water supply.
For the 2020-21 financial year, Tasmania received an average spot price of $45 per megawatt hour through the NEM, compared with $51 for Victoria.
What do you think? Send us a letter to the editor:
Our journalists work hard to provide local, up-to-date news to the community. This is how you can continue to access our trusted content:
- Bookmark www.examiner.com.au
- Make sure you are signed up for our breaking and regular headlines newsletters
- Follow us on Twitter: @examineronline
- Follow us on Instagram: @examineronline
- Follow us on Google News: The Examiner