Labor commits to using green hydrogen to fuel the Hunter Power Project at Kurri

Opposition leader Anthony Albanese announced the changes that would make the $600 million project aligned with the Hunter's emerging hydrogen economy during a visit to the area on Tuesday.

The 660-megawatt generator is a key component of the federal government's gas-fired economic recovery.

The government has consistently argued the peaking plant, which will operate for about two per cent of the time, is needed to ensure stability and affordability of electricity supply following the closure of Liddell Power station.

Work is due to start on the plant's construction in the coming months with the aim of having it complete by late 2023.

While the plant's open cycle gas turbines have been designed to allow for a 30 per cent hydrogen-gas blend, the current plans are to initially run the plant on gas to be piped from the Sydney-Newcastle gas pipeline.

The project has become a lightning rod for opponents of gas technology, who argue the plant will become stranded in an increasingly renewable energy driven system.

READ MORE:

Tuesday's announcement represents the first time federal Labor has presented a united front on the Hunter Power Project and follows more than a year of in-fighting over energy and climate policy.

Mr Albanese said a Labor government would instruct the project's proponent, Snowy Hydro Limited, to operate the plant on 30 per cent green hydrogen as soon as possible, and to upgrade the plant to run on 100 per cent green hydrogen as soon as viable.

It says the goal could be achieved by 2030, based on the timeline for a similar power project being pursed by Squadron Energy at Port Kembla.

"Labor's proposal will improve job security for workers and ensure investment in the Hunter - guaranteeing the region will power Australia well into the future," Mr Albanese said.

"A green hydrogen plant will underwrite demand for the fuel in the Hunter, helping the region to become a hydrogen hub for Australia and the world.

"A boost to green hydrogen demand means a boost to renewables like solar and wind which are needed to create green hydrogen.

And Labor's proposal is consistent with net zero emissions by 2050, as well as our commitment to 43 per cent emissions reductions by 2030."

The changes would require an as-yet-to-be identified sustainable supply of green hydrogen for the plant, however, Labor says it would make an additional equity injection for Snowy Hydro to deliver the modifications.

The project's Environment Assessment Report notes that further planning approvals would also be required.

"The Department notes that while the project has capability to accept an increased concentration of hydrogen in the gas supply, potential increases are also constrained by the transmission network, which currently does not permit injection of hydrogen, apart from a trial currently underway at Jemena's Horsley Park facility," the report says.

Federal energy minister Angus Taylor called Labor's announcement a "spectacular backflip".

"This is a humiliating backdown and an absolute rejection of shadow minister Chris Bowen's judgment who called the Hunter Power Project a 'waste of taxpayer money' and said Labor doesn't support it and will continue to oppose it," Mr Taylor said.

"Labor will say one thing in Kurri Kurri and another in Kooyong. You can't do postcode policy on hydrogen."

Liberal candidate for Paterson, Brooke Vitnell accused Labor of "pulling the wool over the eyes" of the Hunter community.

"If Labor really did support the Kurri gas plant they would have done so from day one," she said.

"Labor are anti-gas and anti-coal. This is a con job to get them to the other side of the election. It's Hunter families and businesses that will lose.

"Anthony Albanese thinks he can pull the wool over the eyes of the Kurri Kurri and Hunter community and everyone in the Hunter who works in traditional heavy industries.

"The question people in those industries should ask is can they really trust Anthony Albanese with their jobs?"

Both Mr Albanese and Mr Bowen - who was also at the announcement in Kurri Kurri on Tuesday - said the government's plan for the Kurri power station was "flawed", while Labor's proposal stacks up "environmentally and economically".

"It's a big vote of confidence in Kurri Kurri and the Hunter Valley," Mr Bowen said.

"It is ensuring Kurri Kurri is at the centre of the hydrogen revolution."

Gas Free Hunter Alliance welcomed Labor's commitment to renewables and "future-focused jobs", but maintained its call that "not a single cent of public money should be spent subsidising a new fossil fuel project" in Kurri Kurri.

"Any power station that burns more fossil fuels like gas is just worsening climate change," Gas Free Hunter Alliance co-coordinator Fiona Lee said.

"You don't get to transition away from fossil fuels by spending more money on them. We want to see the $600 million or more of public money spent supporting and retraining workers, not a dirty gas plant that will need expensive upgrades in a few short years."

Paterson MP Meryl Swanson, who has been a vocal supporter of the power project, said the project was needed to secure the national electricity grid as well as support local industry such as Tomago Aluminium.

"The plant fits in well with Labor's climate change agenda. Gas is an important transition fuel, and green hydrogen is part of the future. The Hunter is moving towards becoming a hydrogen hub and this plant is an important part of that," she said.

"I will always stand up for my community, and securing local construction and local jobs is very important to me. There will be jobs during construction, and now with the inclusion of a greater mix of hydrogen, there will be green energy jobs into the future."

Mr Albanese launched Ms Swanson's campaign at a function at Maitland on Monday night.