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Energy and Renewables – Hydrogen

Dr Rosalie Woodruff MP

Dr Rosalie Woodruff MP  -  Tuesday, 7 June 2022

Tags: Hydrogen, Renewable Energy

Dr WOODRUFF - Minister, just to square away what we were talking about before, any transmission line, high voltage DC or low voltage AC can be undergrounded. It is just purely a cost decision about whether that happens and TasNetworks is making a cost decision in Tasmania and a cost decision in Victoria and the external circumstances are obviously different enough in Victoria that they are forced to go underground there. I want to talk about other issues for the north-west and hydrogen. Hydrogen is obviously critical for Tasmania and the investment so far is $140 million, $70 million Tasmania's, $70million federal and that is going principally into Bell Bay. The issue for us in the north-west is TasRail and the replacement of ageing locomotives.

They are at a critical stage where they have to be replaced and the concern is there is not the security of hydrogen constant supply and the investment that is needed right now for TasRail so that they do not end up having to buy diesel for another 30 years.

CHAIR - Dr Woodruff, this is, as you probably know, the Budget Estimates Committee. There will be an opportunity later in the year, to ask about GBEs, of which TasRail is one, in the GBE Estimates. If you have a question about the Budget, it can be put, but if you have a question about GBEs, there is a time and place.

Dr WOODRUFF - Thanks, Chair. I appreciate that. I was about ask the Budget question. That was the preamble, so that it was understood.

My question is, minister, they desperately need something in the order of a $30 million injection right now, so they can start to purchase those locomotives and start the development they need for the long term and that they can go hydrogen. What conversations are you having and what investment are you putting on the table for TasRail to make the hydrogen transfer?

CHAIR - Look, Dr Woodruff, as I mentioned, if the question is about TasRail -

Dr WOODRUFF - It is about hydrogen.

CHAIR - And hydrogen for TasRail, there will be an opportunity to ask about that. If the minister has any general comments about matters in the Budget that relate to your question, I am sure he will feel free to answer that.

Mr BARNETT - Thank you very much, Chair, and I can see the intent of where the member is coming from and I will attempt to assist the member and the committee at a high level.

I am not, obviously, across all the details, in and around TasRail, but I can assure the member we take the move to green hydrogen very seriously. We have a $50 million support package for progressing our green hydrogen hub efforts and the hydrogen activation plans across the economy.

That includes, in terms of transport, which includes trucks and marine vessels. We have already funded feasibility studies for a number of projects including the number of the proponents at Bell Bay, but also, with respect to working with Metro in terms of Metro buses using green hydrogen and/or electric vehicles. That work is ongoing.

I am also advised discussions have been held at a high level between my department and TasRail.

Dr WOODRUFF - Thank you. I am pleased to hear you started the conversations with TasRail and obviously, the need for a future pipeline of money.

Can we just return to the discussion about the investment in the Bell Bay cluster and that $140 million? As I understand it, the majority of that will be going to established industries for Woodside Petroleum and Origin and, I think, Fortescue.

You have talked about the creation of jobs. What number of jobs did you say, was it 2000?

I understand that, in reality, the sorts of jobs those industries would provide from hydrogen would be in the order of, for example, a handful for Origin and they would probably be based in Melbourne and be working by robots externally.

Can you really give some evidence for why you think there would be large numbers of jobs from those future hydrogen industries?

Mr BARNETT - Thanks very much for the question. As I say, I thank the Australian government for their support and I pass that message on of thanks to the federal minister, for the support of the $70 million commitment for Bell Bay to be a green hydrogen hub for Australia.

Just last week, I met with the Innovation Commissioner for Green Hydrogen from Germany. I can assure the member and others here, there is a lot of interest in Tasmania as a result of our plans for green hydrogen, from not just Germany, Europe but also throughout Asia.

It is very encouraging. We have an international engagement plan and that plan is working. There is certainly more to say about that, if members are interested.

In terms of Bell Bay, and, yes, the funding is to support the hub and the establishment of the hub. Yes, you have identified three of the key proponents, large scale proponents with large scale plans: Fortescue Future Industries, Woodside Energy, Origin Energy but also ABEL Energy as a smaller project that they are planning. We have been in discussions and progressing their plans in recent weeks. There is ongoing engagement with all those proponents and there is LINE Hydrogen which is funded by the federal Labor government to get established.

That is for the use of green hydrogen in vehicles and transport in Tasmania. The plans of the major proponents are staged and we are talking of hundreds and hundreds of jobs over time. During the construction process it would be many hundreds of jobs, and then ongoing. Further jobs will be created in the activation and use of the hydrogen domestically in Tasmania, on the mainland, and for export, so there is a whole range of benefits. What we do know in Tasmania is that exports create jobs.

Dr WOODRUFF - So no jobs in the actual cluster?

Mr BARNETT - I am happy to flesh that out for you if you have further questions.

Dr WOODRUFF - Do you accept that we do not need the Marinus Link to establish a green hydrogen industry in Tasmania? Electrons can come from anywhere. We can generate the electrons. We have a plan for 200 per cent renewable energy in Tasmania. We do not need to be importing or exporting anything over Marinus Link to generate a green hydrogen hub. Do you agree it would be significantly cheaper for Tasmanians if we did not spend the money building Marinus and instead spent the money creating green hydrogen industry in Tasmania for ourselves?

Mr BARNETT - If I can respond just to disagree with the member, particularly with your last point and to make it very clear that it is the Government's view, and our position that Marinus Link is integral to a successful green hydrogen industry. It complements the establishment of a green hydrogen industry. It does require significant electricity. The three ingredients to success for hydrogen manufacture are electricity, water and infrastructure - road, rail and port. Bell Bay has that in spades so we are well placed strategically to establish a green hydrogen hub. We have plans to progress and we are doing it.

Dr WOODRUFF - We do not need Marinus, do we? We do not actually need it to do that.

CHAIR - Dr Woodruff, Mr Wood will have the call.

Dr WOODRUFF - Minister, staying with the hydrogen industry development, I understand that with the hydrogen hub being discussed, the $140 million investment into that potential market is almost entirely about exporting hydrogen as ammonia for international markets and that there is a tiny percentage that will be available as offtakes for a Tasmanian electrification industry for our purposes here, on island. Can you please tell us what proportion that would be available after export is being discussed by those companies?

Mr BARNETT - Thanks very much for the question. At all times the Government has made it clear to the proponents that we support on-island processing; we support jobs to be created in Tasmania as a priority. We've supported a priority of working with the local community to get the best outcome possible. You've referred to this earlier to Marinus Link not being necessary, which I disagreed with because Marinus Link will unlock more renewable energy developments to support green hydrogen. Green hydrogen requires electricity, water and infrastructure, and that's what we've got in spades in Tasmania. To your point about the proponents, there are major and smaller proponents and, for example, we have funded the feasibility study of Able Energy. I think it was $2.6 million of funding for feasibility studies and they received some of that funding. They want to manufacture methanol. That is with a local offtake, which would be used in Tasmania for Tasmanian purposes. I mentioned earlier the merit of Metro using hydrogen in their buses. There are a whole range of local business activation measures that we have in place, and I have made the importance of that very clear to my department and to the stakeholders.

Dr WOODRUFF - As you said earlier, Able is a tiny player in the pool of the three big companies. I understand and you did not confirm that the overwhelming majority of hydrogen produced after that investment in Tasmania will be exported, and that a tiny proportion will remain in Tasmania as an offtake. That says to me that the reason for Marinus is to provide Woodside, Origin and Fortescue with the opportunity to export our green hydrogen, but that essentially none of that is being put into TasRail for new locomotives and to generating our own electric transport industry.

Mr BARNETT - As a preliminary note in responding, it would be nice to know whether the Greens support the establishment of a green hydrogen hub in Tasmania.

Dr WOODRUFF - I think it is pretty clear from my question that we do support the electrification of transport in Tasmania. We are concerned on behalf of Tasmanians that it is all going overseas and not staying here.

Mr BARNETT - Do you support a green hydrogen hub?

Dr WOODRUFF - We do support the development of green hydrogen; we have always said that.

Mr BARNETT - It is very encouraging to hear that.

Dr WOODRUFF - We want it to stay and electrify our transport to reduce our emissions.

Mr BARNETT - It is very encouraging to hear the Greens support a renewable energy project in Tasmania such as green hydrogen because they have opposed every other major renewable energy project in Tasmanian history.

Dr WOODRUFF - For the record, incorrect.

Mr BARNETT - All of the proponents we have had discussions with, though ReCFIT and directly, have all been talking about local offtake agreements. We have had discussions with Tas Gas, and I commend Tas Gas on its proactive approach to working with the proponents, our Government and other businesses to ensure that we can use our gas network for the transport of green hydrogen. There are a whole range of projects in the marine sector, so we have work being undertaken in the marine sector and the trucking industry.

Dr WOODRUFF - To the question please, minister, the proportion that is going over to exports.

CHAIR - Dr Woodruff, you will lose the call if you keep interjecting.

Mr BARNETT - I cannot give you specific proportions because that depends on the circumstances and the plans of the proponents.

Dr WOODRUFF - A general ballpark would do.

Mr BARNETT - We do know that we want Tasmania to continue to be a leading light when it comes to not just the manufacture of green hydrogen but the use of green hydrogen amongst and in Tasmania, amongst our network, whether it be in transport, marine transport, trucking transport, other vehicles, for manufacturing purposes - there will be a whole range of uses for green hydrogen, some of which we probably do not even know now. That is why we have a long-term vision.

Dr WOODRUFF - Not if it is all going overseas, we will not be able to use it.

CHAIR - Order, Dr Woodruff.

Mr BARNETT - That is why we have a long-term vision and released the vision some time ago, and now we are working to roll out that vision.