Hydrogen and Renewable Energy Bill

Hydrogen and Renewable Energy Bill

27 September 2023

Second Reading - House of Assembly: Wednesday, September 27, 2023

Mr McBRIDE (MacKillop) (16:46): I rise to speak on the Hydrogen and Renewable Energy Bill and, in general, really support the whole process that has been allowed to occur today in this parliament. There is a clause above it, that does not mean that I am fully cognisant and understand whether the production of hydrogen as an alternative to our old fossil fuels stacks up today, stacks up tomorrow or will stack up in 10 years. I think it is going to be brave governments and business leaders to do those sorts of investments and understand it better than I can.

I am actually quite pleased about this process. I will speak locally first, about my seat of MacKillop in the South-East, and talk about some large businesses, plus opportunities that we battle with in the area of energy. Before I go any further, and just covering off on what the member for Hammond talked about when he talked about lines, poles and infrastructure, which obviously transport energy around our regions, it is a really big concern when our infrastructure starts to fail and become of the age of 60 years plus. It is really hard to measure and manage and be forewarned of any sorts of accidents occurring, such as lines dropping to the ground because insulators are perished and beyond their use-by date.

I do share those concerns the member for Hammond has raised. It has happened around Nangwarry, and no doubt it could happen elsewhere to our ageing infrastructure. All I can say to any government, no matter the colour of their politics, is that we do need good infrastructure across our state so it not only transports energy but is reliable and safe to use 24/7, rather than switching it off because the winds might be too high.

Coming back to this bill in more direct terms, it gives the opportunity to license and allow the generation of hydrogen using renewable energy. Two of those energies obviously are solar and wind. In our neck of the woods, particularly during winter, the sun is not much of an energy opportunity for us, but certainly wind is. In the summer months, we do have more sunshine than in winter months, and we also have some large industries that would benefit from this type of energy base if it were allowed to stack up.

One of the businesses I am going to touch on is Kimberly-Clark, which is a large employer in my neck of the woods, on the southern end of my region near Millicent and Tantanoola. It is a pulp mill, it imports from overseas, it produces a world-class product of tissue paper in many forms and it transports that product all around Australia.

One of the things that has been a bugbear—and we have always tried to help and assist wherever we could through the Marshall years, and no doubt I will try to do that in the new Malinauskas years that are in front of us—is that we keep energy costs down to a minimum for Kimberly-Clark and, not only that, that we make sure, if there is an access opportunity for Kimberly-Clark to use hydrogen and renewable power to substitute its high need on natural gas, that we allow them to do so. This is all yet to be determined, about how much it can use in the way of hydrogen and natural energy.

We have the Lake Bonney wind farm there, which is one of the older wind farms in South Australia. The fans have certainly been superseded by newer and bigger ones, but I know that the wind farm now has a large battery on board. It is certainly not used to its maximum because the competition to access the grid is not as easy as it probably was when it first started. I know that we could benefit more from that production if we could get more of the energy used for the likes of hydrogen.

Another thing I want to touch in that area is Bordertown, a small community busting at the seams to build more houses and capture more business. The Minister for Housing, Nick Champion, is working with me on affordable housing, but one of the imposts for us in Bordertown is the lack of water and also the lack of power. Bordertown cannot even have its own solar investment in the town because the grid that supplies Bordertown cannot cope with excess energy being produced in Bordertown to go back into the grid. My understanding is that the general answer to developments in Bordertown is, 'No, you cannot put a solar farm or development here because the grid can't cope with it,' yet in Bordertown we have a diesel generator that has to be started because the grid does not meet the town's needs anymore.

A large and strong business in Bordertown is Blue Lake Milling, which has a methane capturing type model alongside the business to produce methane for power production. It certainly can and does meet the needs of Blue Lake Milling, but it cannot get it into the grid either because the contracts are too tight. So far, it has not worked as well as they were hoping to utilise that investment.

What may be possible for Bordertown, and this is only if this sort of infrastructure and these types of processes are allowed—and this is what the bill could help manage—is if a development of renewable energy were produced in Bordertown, such as solar, and they were then allowed to produce hydrogen. There would then be two outcomes. They could distil more fresh water, and the watertable that does not quite meet human consumption needs with its salinity levels could be desalinised down by about 20 to 30 per cent, and also produce hydrogen and also produce energy. That may be something that this type of legislation and regulations would allow for investors to participate in.

Another thing about the bill and how it has been explained to me, and we see it in the mining industry—and this is rather adventurous of the Malinauskas government and probably even adventurous for the minister—is to develop a policy where he does not want to see investment banking or land shadowing, where investments or rights to access sites and renewable energy type projects actually say, 'We'll do this,' but we actually do not. We sit on it and we do not allow other players to come in.

I think that is rather bold and I think it is rather positive, the way that land tenement, mining access and the Mining Act works now by locking potential developers and investors into minerals out of the game, because it has people with silent licences on land just waiting for that opportunity when someone might find something below the ground. Yes, it can work, but it is very opportunistic and maybe it is not that conducive to maximising benefit for the South Australian economy if there are players in that game who make it really hard for developments to take place.

If this legislation works well, in the fact that silent players cannot sit on their hands and lock away other investors and say, 'This is mine. You can only have this site, this idea, this model or this development if you pay me something for it,' then I think that would be a great outcome and maybe it will make South Australia more accessible for all the natural energy that may be out there in the way of sun and wind.

Another thing I would take liberty to speak on is the fact that I do have family interests in the pastoral regions. Our family has been farming in pastoral areas for over 100 years now and we have always welcomed and tried to work with mining companies for all the benefits they bring to our regions. They bring in population, roads, infrastructure, telecommunications, water and, in general, population for the benefit of others in such isolated circumstances.

Renewable energy is proposed in the way of windfarms and solar and perhaps even microcells, which I will touch on in a second. These big investments are talked about on Eyre Peninsula or 100 kilometres west of Port Augusta and beyond. I think there is a 1,200-fan investment looking at potential there.

I know that the pastoral property owners there are very excited by this proposal, and so are we as an owner of one of those properties out there, by the fact that this investment has to work with the Indigenous population and owners first and work through that process and then work through the access of pastoral owners and where the best site is for fans. Then there is the rental, the workers, the maintenance and the energy that may be created to then roll back into what I am seeing and hearing is a massive production site of hydrogen and energy heading towards either Whyalla or other developments. I am not quite sure where all that lands at this stage and, as I said, it is going to be people with a much bolder vision and expertise in this area than I to say whether it will work or whether it will not.

I certainly know that we as a human population are very clever. Technology keeps on changing and I think that when there is legislation rolled out like this, which allows for even greater uptake and opportunity, we all have to get in behind whoever puts their neck on the line. There used to be a saying: who dares wins.

Another area I want to touch on is these tiny microcells for our most isolated communities. I know there are engineering businesses out there—and I will just give an example—that would like to be able to set up little microcells of solar and wind producing renewable energy to produce hydrogen to produce power that would take away the small diesel generation that takes place now. The other benefits of this are that they would have potable water and energy and they may even have hydrogen for sale that would be sold in the near vicinity.

If you think long term, when we are talking about our own transport network in the future being driven on hydrogen, you could imagine going to the APY lands and they are totally self-sufficient in energy, water and hydrogen. You might drive up there and refuel with energy that is produced onsite, for example. This is the sort of technology they are saying is not that far away. It is possible and, obviously, it will not just be the APY lands but any sort of small, isolated pockets that warrant and have access to renewable energy that will be able to participate in these areas.

With that, I wish this whole process well. I think it is well intended. I think it is for the benefit of the great good of South Australia. As I said at the outset, I am not here to choose and pick winners as to whether hydrogen can outcompete and produce energy cheaper than the fossil fuels that we are trying to leave behind, but I will say that this process here and what I have seen and read and been told about is to make sure that we progress down the renewable line, unencumbered, without restrictions, and allow investors to have the best opportunity for benefits in South Australia as possible.

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