By Sonali Paul
MELBOURNE, May 4 (Reuters) – Australia’s third-largest energy retailer, EnergyAustralia, said on Tuesday that it approved an A $ 300 million ($ 232 million) expansion of its Tallawarra gas-fired power plant after securing support from the state of New South Wales and from the federal government.
The plant, which will also be able to use hydrogen, is seen as crucial in helping to fill a power supply gap that arises when rival AGL Energy AGL.AX closes its Liddell coal plant in 2023.
EnergyAustralia, a unit of Hong Kong’s CLP Holdings 0002.HK, earned A $ 78 million in funding from the New South Wales government and A $ 5 million from the federal government for the plant.
“The station (Tallawarra B) will be operating in time for the summer of 2023-24, after the closure of the Liddell power station, and will help to kick-start the green hydrogen industry,” said managing director Catherine Tanna.
EnergyAustralia said it would offer to purchase 200,000 kilograms of green hydrogen annually for the 300 megawatt (MW) plant starting in 2025.
GE GE.N said it will supply the turbine for the Tallawarra B project, the first in the world to use one of its new hydrogen-compatible turbines.
“This is a victory for families and businesses in New South Wales and for the broader National Electricity Market,” Energy Minister Angus Taylor said in a statement.
The federal government pressured the private sector to approve investments by April 30 to provide up to 1,000 MW of flexible energy capacity to prevent price increases and blackouts when Liddell closes.
If the industry fails to make these investments, Snowy Hydro, a federal state-owned company, said it would build a 750 MW gas-powered plant in New South Wales.
Squadron Energy, owned by mining billionaire Andrew Forrest, has proposed building a 660 MW gas-powered, hydrogen-convertible power plant in Port Kembla.
The project was selected to receive support through the federal government’s New Generation Investment Subscription scheme, but remains under review.
Squadron’s chief executive was not immediately available to comment on the project.
($ 1 = 1.2923 Australian dollars)
(Reporting by Sameer Manekar in Bengaluru; Editing by Aditya Soni and Richard Pullin)
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