Engineering and construction firm UGL will supply Snowy Hydro with two ‘hydrogen ready’ gas turbines for the Kurri Kurri gas generator under a $185 million contract.
The award of the contract was announced on the same day as the Morrison government said it had granted environmental approvals to the $600 million Kurri Kurri project.
The project will see a 660MW gas fired power plant constructed in the Hunter region of New South Wales and has been described as “dirty, unnecessary and expensive” by critics who argue that the federal government should not be funding the construction of a new fossil fuel generator.
Snowy Hydro has suggested the plant could be partly fuelled by hydrogen gas – including a 10 per cent hydrogen mix initially and up to 30 per cent hydrogen “subject to fuel logistics”.
The Kurri Kurri generator will primarily operate as a gas peaking plant, meaning that it will be primarily fuelled by fossil gas and would likely only run when wholesale electricity prices are high.
UGL said it would supply Snowy Hydro with two F-class gas turbine generators, which Snowy Hydro has indicated could be fuelled with diesel for the first six months of their operation.
After initially opposing the project, the federal Labor opposition has announced that it would support the project under a potential Labor government following the next election and potentially inject a further $700 million of funds into the project to transition the Kurri Kurri plant to run on hydrogen.
That suggestion has likewise been criticised, with energy market experts stressing that power generation ranks amongst one of the least effective uses of hydrogen fuel.
In recent years, UGL has been engaged in the construction of at least six large scale solar projects across Australia, including the construction of the Mugga Lane and Majura solar farms in the ACT and the 110MW Bannerton Solar Park in Victoria.
CEO of CIMIC Group, UGL’s parent company, Juan Santamaria welcomed the contract, which would include the supply of gas turbines suitable for use with hydrogen fuel.
“Hydrogen-ready gas turbines have an important role in reducing carbon emissions from traditional power generation,” Santamaria said.
“We are pleased to work with Snowy Hydro to play a part developing this hydrogen-capable plant and to support the local community by creating direct and indirect job opportunities in the industry.”
UGL said the contract would commence later in February.
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