The NSW Government and EnergyAustralia have reached an agreement to proceed with the expansion of the Tallawarra Power Station into the country’s first net zero emissions hydrogen and gas capable plant.

The new power station will deliver reliable power to around 150,000 homes, contribute $300 million to the economy and create 250 well-paid jobs during construction.

The gas project has received a funding commitment of up to $78 million from the NSW Government to help deliver the project to financial close. The Federal Government will also provide $5 million to make the project hydrogen-ready.

Federal Minister for Energy and Emissions Reduction, Angus Taylor, said the new dispatchable capacity from Tallawarra B will help secure the state’s electricity supply and keep prices low.

“This is a win for households and businesses across New South Wales and the broader National Electricity Market, particularly our local manufacturers who will benefit from additional dispatchable generation,” Mr Taylor said.

“With the impending closure of Liddell, the government called on the private sector to step up and outline firm investment plans to provide up to 1,000MW of dispatchable electricity generation to avoid unnecessary price hikes and reliability risks.

“EnergyAustralia’s commitment is pleasing and will be the first dispatchable energy generation project to be built in NSW in over a decade.

“I am also pleased the NSW Government and EnergyAustralia came to a workable solution to see this important project reach financial close. 

“Affordable, reliable and secure power is crucial to ensuring families, businesses and job-creating industries in New South Wales can grow and prosper, and this project will help make that happen.”

EnergyAustralia Managing Director, Catherine Tanna, said the direct carbon emissions from the project will be offset over its operational life. EnergyAustralia will offer to buy 200,000kg of green hydrogen per year from 2025.  

“We thank the New South Wales Government for its support for Tallawarra B. It means the station will be operating in time for the summer of 2023-24, following the closure of the Liddell Power Station, and it will help to kick-start the green hydrogen industry,” Ms Tanna said.  

“We are leading the sector by building the first net zero emissions hydrogen and gas capable power plant in New South Wales.

“What’s particularly exciting is that further engineering studies will see if the amount of green hydrogen can increase, which will further support the Port Kembla Hydrogen Hub.” 

Ms Tanna said Tallawarra B will provide New South Wales with improved energy security, reliability and flexibility options. 

“Our new open-cycle, hydrogen and gas capable turbine will provide firm capacity on a  continuous basis and paves the way for additional cleaner energy sources to enter the system,” Ms Tanna said. 

“EnergyAustralia has a goal of being carbon neutral by 2050. 

“Today we provide further evidence of another energy project that can help keep the lights on for customers with reliable, affordable and cleaner energy.” 

NSW Minister for Energy, Matt Kean, said, “This project sets a new benchmark for how gas generators can be consistent with NSW’s plan to be net zero by 2050 by using green hydrogen and offsetting residual emissions.”

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