Matthew Pantelis speaks with the Chair of the Budget and Finance Committee Heidi Girolamo and Energy Minister Tom Koutsantonis about the hydrogen power plant.
Listen live on the FIVEAA Player.
Let's talk about electricity prices and how the hydrogen power plant that's going to cost some six hundred million dollars may not make any difference. The government says it will, but the Office of Hydrogen Power, the CEO Sam Crafter, telling Parliament that no modeling has been done on how the hydrogen power plant would reduce your electricity bill. Hidi Durolimo is chair of the Budget and Finance Committee in Parliament. Hidi Gerrolimo, good morning, Good morning Matt. So the hydrogen power plant, you're going off Sam Crafter's submission yesterday that it may not make any difference to electricity bills in the future.
Absolutely, and we're really concerned that this six hundred million dollar experiment with the hydrogen plant is not even going to save a dollar fifty for many South Australian families on their electricity. It's really concerning that the government is backtracking on this. Last sitting week, both the Premier and the Minister referred to the hydrogen plant as a policy measure to bring down power bills. Yet this morning the Minister's saying we never promised it would be a cost of living measure. On another radio station. We are really concerned that this is very much a back of the envelope plan and a thought bubble from Tom Kritsontonis when it comes to the hydrogen plant, you're spending six hundred million dollars of taxpayer money and potentially not saving a dollar for many South Australian families who are doing it incredibly tough at the moment. We asked a range of different questions during the committee, some very simple questions about what economic modeling had been done, and there was absolute silence. It seems like very little has been done to make sure that this is the right decision for South Australians and the right decision for South Australian taxpayers. When you're spending an exorbitant amount of money on what could be a white elephant experiment, is.
The minister right? Though they haven't linked this to cost of living, have they?
I think they have.
Specifically they have talked about lower power.
Down well, bringing down power prices is what I think people would expect to see a saving on their power bill, and at the moment, I think South Australians are paying the highest electricity in the nation and they would like to see this six hundred million dollar experiment resulting in a reduction in their power bills. And it was pretty clear from the committee yesterday that this is unlikely to occur. That they're going to somehow build this power plant for six hundred million dollars. There's no impact of inflation, even though we know a lot of the costs associated with the power hydrogen power have gone up massively. But yet somehow this is going to be delivered and six hundred million dollars of taxpayer funds are going to be spent. But yet it's not going to impact on South Australian's power bills when they're doing it so tough.
We've heard all along from successive governments here in South Australia, both Liberal and Labor, how renewable energy was going to bring down electricity costs and we're still waiting for that, Heidi, and you know your side of politics. I can recall John Olson, Rob Kern, Hiss, Premieer saying that back in the day we're talking twenty odd years ago. I can recall Mike Rant and Jay Weatherill saying it in their time too. We're still waiting for that to happen. So is this just another another one of those promises, renewables. It's free, you know, it's free energy. We just got to make it happen and that'll come at a cost and power prices will come down. Well they haven't once sent with renewables.
No, they haven't. And I think this government needs to step up and make sure that they're investing appropriately to make sure that power prices do come under control. At the moment, spending six hundred million dollars on a thought bubble seems like it's unnecessary spending at a time when South Australians are doing it really tough and would like to see their electricity bills come down.
All right, appreciate your time. Heidi Drolimo, Chair of the Budget and Finance Committee, State Parliament, the Minister Energy, Minister Tom Kutz and Thonas on the line. Minister, good morning, thank you. Jurymck are you concerned about this that this project six hundred million dollars may not lower electricity bills one dollar twenty so?
Before the election match, the Premier held a speech where he said that the Hydrogen's Job plan was not about lowering power prices and it never was and the Liberals know that we've been saying that all along. This is about having a strategic reserve of power. You might remember that after the state wide blackout, we bought two hundred and seventy megawatts of generation to be put into the system to have our strategic reserve in case the state was short the moment we lost the election in twenty eighteen, Heidi Jerromolo and her friends sold that generator immediately into the market. They've sold those generators that privatized them, and then another two hundred and fifty megawatts left the system. So we're building this generation in Wala to have a strategic reserve. We never said it was going to lower power prices, and we will criticize before the election about saying it wasn't going to lower power prices. The reason we're building a hydrogen electoralizer and the reason we're building a generator is because on dayslight today, Matthew, we have got so much renewable energy being produced in South Australia that we're either turning solar panels off or solar arrays off, or we're exporting it into state because prices are nearly negative. What we're saying is we want to use the hydrogen electoralizer like a pump hydro station where we use the cheap power to manufacture hydrogen. And the reason we've built it at Whyala is you can use that hydrogen to beneficiate iron ore to green iron and make green steel, so you can replace coaking cold with hydrogen. So what Heid and it was a trying to do is trying to convince our Australians that a government policy is having an impact on power prices. The truth is this is an international problem. Gas prices and cold prices are up because of the war in Ukraine. The international actors got nothing to do with anything the governt start.
Well, gas you could argue, you could argue have gone up because of the arrangements we have to export it before we supply our own local market for goodness sake.
Well you could also argue that hidest decision to ban gas exploration and practice stimulation in the southeast and our second largest basin has also had an impact on supply and increased prices, but they keep very quiet about that. But my point is the Hydrogen is Jobs plan is about making sure that our free smelters that we have in this state, the one at roxby Downs, the one at Wyale and the one at Port Piri continue to make and beneficiate our ores into products, into metals, rather than just shipping those oars off the career in japanel that some other country have those high tech complex jobs, we want them here. So what we're doing is we're future proofing Wyala by making sure that our electoral life is being built in Wyalo doesn't just serve the generator, because the generator can run on gas and hydrogen. What we're saying is we want at hydrogen used in the still works to make sure we can lower those emission and have a product we can then sell to the rest of the world because quite frankly, the plan that liberals had to export hydrogen around the world become very very difficult. We think we should use the hydrogen where you make it. We think we should be using it here to beneficiate our ores like copper, like iron ore and like let him think, because we can create those advanced manufacturing jobs here in South Australia rather than in career in Japan and China.
You're on hold well, Heidi Jialimo said that the Premier and you have said it will reduce power prices. Are you saying she's lying all that wrong?
I would never call her a liar, but we never said it would reduce retail prices ever, with what we said it would do is to have an impact on the wholesale market. It's but the Premier was criticized roundly by the Liberals before the election and after election because we've always said this was not designed to reduce retail prices. What we're doing is we're building a generator for system security, and the system security is going to be in place by our generator is needed, and it can operate on hydrogen and we can use that hydrogen that we're manufacturing up there with renewal energy in the stool works as well, which is why we chose Wyala. So, I mean, I think the Liberals are being a little bit kit here and they know it. So the political spinner is on their side, not ours. We've always been upfront with the people of South Australia. We've always said that.
What happens if and this is hypothetical at this stage, but it looks worrying every day more stories out of Wyala and people concerned about their future there. If the plant goes down, what happens to the hydrogen project.
The plant cannot go down. Let let's be very clear about this. The South Australian government will not let Wyala fail. That blast furnace cannot go cold unless there is something to replace it. They can take virgin ore from the Middle Back Ranges and put into whale. The only reason bhp Arium and now GUP have those mining licenses for those vast iron ore reserves because they operate steel works. There is no future for iron ore mining without a still works in Layala. The still works must survive. We've got the common orth and the state government's got over one hundred and twelve million dollars on the table to help mister Gupta reinvest in facilities in Wyoma to try and make sure we can keep still making going. We're waiting on him, but I don't think. I don't think fear angering by some politicians actually assists us get through this. There are international price shocks that are having an impact on still manufacturing. Steel prices are down globally, iron ore prices are down globally. That's having an impact in Layala that Wyler is not immune. There's the same things are going on around the world. But I also understand their anxiety about these long terms that creditors are waiting for their money. I meet with creditors regularly about this, and we are trying to assist. But in the end we must maintain still making Wyala, and I don't think creating panic helps that.
Two things in regards to that. Will you go to Wyala and speak to people there and reassure them of the things you've just told me here and linked to that you will?
I regularly go to Whaler. I think I've did with Waler more than the other any other politician other than Ron Ramsey and Eddie Hues who who are the local members? So I'm there.
I'm there very often, Okay, so what a couple of months or so?
Yeah? Absolutely, And I meet with the council regularly, and I meet with the local MP regularly. I meet with mister go regularly. I am very worried about Wyala. You might remember a while ago when Miss books That decided to delay his electric arts burns. I had some quite strong words to say about him. But the difference between me and mister Pangelo is I actually have to manage this, and what I don't want to do is create a panic. Now, what I'm saying is, yes, some creditors are owed money and that is difficult, but I've not seen large amounts that are looks like it's going to push them over, and I don't want to create a panic, and panic helps no one. We need systemic, long term growth. We're investing with the Common Worth government. I'm in regular contact with the Common Worth government. We want to make sure creditors get paid. We're placing one of the largest steel orders in the state's history with GfG, so were going to order one hundred and thirty thousand tons of steel for the North South Corridor from GfG. We want to see that that work and keep them working there. That's a big order that should sustain them. We want to see a new investment in the blast furnace to be replaced by an olytric ark furnace and direct in relaction facility. We're speaking of the Common Warfs government about that, and that's why we're building our hydro and electrolyger next to Wayala because everyone knows that green iron is the way forward. So I'm not sure why tips on getting called experimental. If you want a long term future for ila you need hydrogen? Is there a boat?
Is there a place for the state and federal government in buying the still works? If mister can't keep it going, why not?
I think we will be better off if mister Goode decided to slide, we'd be better off having another still manufacturer purchase it. I don't think it should be a government run industry's government.
It just seems, given its history though, it's going to keep going through these cycles though unless they.
Well, this is the problem. When when when whaler makes rail line and structural still the long products that it makes, it makes money. When it makes it's still billet, which is its unfinished steel products, it doesn't make as much money. And structurally the blast furnace is very small. It's only a million times a year, so you want it to be a bit bigger than that. So you want an electric art furnace and a direct iron reduction faclet it a bit bigger. So we need someone to invest in it. We're putting some money up. We'd like mister Goodton to do it. And if you can't do it and he decides someone else will do it, or he has an ability to invest we're there to support him, but in the meantime, my job is to make sure that blast furness stays hot steel.
I've just been sent a text on the text line here and it's the Australian National Hydrogen Strategy. It says this was used in election material in the state election and it says this plan will deliver first line in red and white at lower electricity prices for businesses and industry in South Australia.
That's because that would be about the wholesale market rather than the retail maker. And we've always said she's got more generation in the wholesale market which big businesses can buy from like BHP and GfG and the big the big industrial plants. That's where our generator is selling into what Heidi and is talking about his mums and dads with their retail bills. So we always said this was about business, the business that we're trying to lower costs for industrial uses, not about residential uses.
And no modeling on that either.
Well, we released the modeling on that. We said that it would have an impact, but we've always said it won't have an impact on residential prices. We've always said that Matthew, and I'd ask Haidi to find any reference where we said this would lower residential prices.
Tom Kitts and Tomas Energy Minuster got to leave it there. Thank you for your time.
Thank you