Energy and emissions reduction minister Angus Taylor released an announcement on the funding today, which was originally put forward in the Federal Budget, describing the power station as a gas-fired plant, making no mention that the plant would eventually run off hydrogen.
"This is what the government's gas-fired recovery is about - helping Australia bounce back strongly from the COVID-19 recession," Taylor said.
"New gas supply and generation will help re-establish a strong economy and make energy more affordable for families and businesses, while complementing the world-leading levels of renewables in Australia."
However in a statement sent to Energy News dated from August, Taylor's comments were met with a rebuke by Squadron Energy boss Andrew Forrest who has been insisting that the company is building a green hydrogen power station.
"As soon as that green hydrogen is available, which we are on schedule to achieve by 2024-2025, the power station, currently licensed for dual fuel, will commence use of green hydrogen," Forrest said.
"The power station will be designed to take 50% green hydrogen from day one and 100% green hydrogen by 2030."
Forrest said the A$1.3 billion project was about energy security "but it's also a pathway to a green energy future".
AIP, a subsidiary of Andrew Forrest's Squadron Energy, plans to build a 660MW combined cycle dual-fuel power station to run off gas and hydrogen, in tandem with its sister company AIE's LNG/hydrogen import terminal — which will supply gas to the power station.
Squadron is the sole shareholder in AIE now after two Japanese companies pulled out last year.
Forrest has faced criticisms of hypocrisy over the two projects, after declaring that his separate Fortescue Metals Group will become carbon neutral by 2030 while also lashing companies like Santos and Woodside over their future gas projects.
The government said the project will play a crucial role in reducing market volatility risks in NSW, quoting AEMO modelling that forecasts up to 19GW of dispatchable capacity will be needed to support the growth of renewables.
The A$30 million will come via the government's Underwriting New Generation Investments program.
Energy News understands that AIP is currently in conversations with suppliers to ensure the materials for the power station will support the project's hydrogen capacity ambitions.
Currently most pipeline infrastructure can withstand hydrogen injection rates of around 20% before suffering from imbrittlement as the miniscule hydrogen molecules leak out.
In August the power station was declared Critical State Significant Infrastructure by the New South Wales government, two years after the proposed LNG import terminal received the same declaration.
AIE was originally a consortium made up of Squadron and Japan's Jera and Marubeni.
The idea was to source Jera's portfolio gas to send to the station given the company is the world's single largest gas buyer. The two companies pulled out last year, leaving Squadron as sole member.
While questions have been raised about when an official FID date would be reached on the projects, Energy News understands that since they have come solely under Squadron's ownership, no such official timeline is warranted.
Construction work at the import terminal was currently underway.
The terminal will be connected to the Eastern Gas Pipeline via a 12km pipeline, after AIE signed an agreement with Jemena in March.
