Investment mandate of the Clean Energy Financing Corporation will be changed, but no guarantee hydrogen will be produced from renewables
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| The energy minister, Angus Taylor, has announced the Clean Energy Finance Corporation will provide $300m for investment in the hydrogen industry. Photograph: Bianca de Marchi/AAP |
The Coalition’s move to create a dedicated hydrogen financing fund will be confirmed on Monday, and comes ahead of other changes the government intends to make to the CEFC’s investment program, including requiring it to support new investments in grid reliability.
Requiring the CEFC to support grid stability will require legislative change. It is unclear when that legislation will be introduced, given parliament is currently working on a reduced sitting schedule. The government will need to table a legislative instrument to update the investment mandate to facilitate the new hydrogen fund.
The independent MP Zali Steggall has recently asked the auditor general to investigate the Coalition’s scheme to underwrite gas, hydro and coal power, saying it lacks transparency and citing legal advice that the Coalition had no constitutional or legislative authority to introduce it.
In a joint statement, the energy minister, Angus Taylor, and finance minister, Mathias Cormann, said the CEFC would provide concessional finance for projects to support a national hydrogen industry.
It would consider new investments in advancing hydrogen production, developing export and domestic supply chains, establishing hydrogen hubs and backing projects that build domestic demand for hydrogen.
Australia’s energy ministers signed off on a national hydrogen strategy in November at the Coag energy council meeting – the first meeting of the federal/state decision-making body for more than 12 months.
Hydrogen has been championed by Australia’s chief scientist, Alan Finkel. In a joint statement after the November meeting, ministers noted markets for hydrogen were growing in Asia and Europe, and said Australia could replicate its success “in becoming a leader in the global LNG market over the past 40 years”.
“We have the resources, technology, workforce and experience needed to be a world leading hydrogen producer and exporter,” the joint statement said. “Australia’s renewable energy generation capacity provides particular advantages in the production of green hydrogen.”
The ACT attempted to amend the national hydrogen strategy at the meeting to support only hydrogen produced from renewable electricity, but that amendment was not supported by other jurisdictions.
Taylor said the government had “a strong commitment to building a hydrogen industry which will create jobs, many in regional areas, and billions of dollars in economic growth between now and 2050”.
“Importantly, if we can get hydrogen produced at under $2 a kilogram, it will be able to play a role in our domestic energy mix to bring down energy prices and keep the lights on,” he said.
Separately to the hydrogen strategy, Taylor has been spruiking a gas-led economic recovery as Australia slowly recovers from the economic shock associated with Covid-19. But the government is yet to release a technology roadmap it was developing before the pandemic hit, which will guide the transition to lower emissions.
Links
- Australia’s path to net-zero emissions lies in rapid, stimulus-friendly steps
- Victoria asks Angus Taylor to fast-track work on Snowy-Melbourne energy line
- 'The perfect storm': hydrogen gains ground on LNG as alternative fuel
- Coalition launches push for hydrogen power in energy policy reboot
- Angus Taylor condemns us to another round of energy stupidity
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