Fortescue Group has dumped a mega-tanker of cold water on Energy Minister Chris Bowen’s green hydro dream as evidence continues to mount against the economically unviable energy source, writes Nick Cater.
He claimed the plan to develop green hydrogen was progressing “at pace” while candidly admitting, “it’s not here yet”.
Later that afternoon, we learnt how far away the technology is.
Green hydrogen’s most enthusiastic corporate backer, Andrew Forrest’s Fortescue group, announced that it was scrapping its target of producing 15 million tonnes of green hydrogen a year by 2030.
Sky News host Andrew Bolt discusses the “absolute disaster” that is the Albanese Government’s green energy scheme.
This follows the restructuring of mining billionaire Andrew Forrest’s Fortescue, resulting in the loss of 700 jobs.
“This is a huge backflip,” said Mr Bolt.
“Only three years ago Forrest was signing green hydrogen deals – conditional ones – totalling $200 billion.
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“Now [he] has no more than five projects still on his books, mostly small, mostly overseas.
“This dishonest government has kept pretending green hydrogen could save us. It’s said no to nuclear, but yes to hydrogen, even though the hydrogen projects it’s backed have kept failing.
“It’s astonishing. Albanese and Energy Minister Bowen are reality deniers.”
The company announced the loss of 700 jobs as it refocused on its core mining business.
In a single press release, Forrest dumped a mega-tanker of cold water on Bowen’s plan to turn Australia into a renewable energy superpower by the decade’s end.
Fortescue remains committed to reaching its back-of-the-envelope target “eventually”.
However, the company did not give the slightest hint of when that might be, nor did it make any commitment that its green hydrogen production would happen in Australia.
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Fortescue’s significant commitments to green hydrogen in the last 12 months have all been overseas.
Anthony Albanese can bang on all he likes about a future built in Australia, but the future of green hydrogen, if it has one, will be built in Arizona, Canada, Brazil, or somewhere else where clean energy is available at a vaguely affordable price.
Fortescue’s announcement nails the lid on the coffin of Labor’s Future Made in Australia plan.
Mr Bowen’s claim on Wednesday that Australia has an unsurpassed natural advantage in wind and solar power is an insult to our intelligence.
The availability of so-called renewable energy is constrained not by the wind and sun but by the availability of capital.
Fortescue Group has dumped a mega-tanker of cold water on Chris Bowen’s green hydro dream as evidence continues to mount against the economically unviable energy source, writes Nick Cater. Pictured: News Corp
Fortescue has decided it has better things to do with its capital than make a speculative investment in a technology so green that no one can predict when it will be ripe for the picking.
If Forrest is not the prince in Bowen’s dreams, who is?
It won’t be Stakraft, the Norwegian hydroelectricity giant, which rolled back its plans to get into the green hydrogen game last month.
“We have definitely underestimated the challenges,” a company spokesman told an industry gathering.
“Developing green hydrogen has become much more expensive than we expected.”
Menzies Research Centre’s Nick Cater says Andrew ‘Twiggy’ Forrest has “woken up to reality”.
This follows the restructure by mining giant Fortescue run by Australian billionaire Andrew Forrest.
This has resulted in 700 redundancies, signalling a slowdown of its green hydrogen ambitions.
“He’s woken up to reality,” Mr Cater told Sky News host Danica De Giorgio.
“The reality is to make Hydrogen … you need a lot of green electricity … and he needs it cheap.
“They’ve been trying to negotiate with companies for years now to try and get that price of renewable energy at an affordable price.
“They haven’t been able to do it.”
It won’t be the French energy giant Engie, which dropped plans to build a green hydrogen plant in Portugal earlier this year and condemned the EU’s 2030 targets as “unrealistic”.
In a damning report earlier this month, the European Court of Auditors criticised the European Union’s target of producing 10 million tonnes of renewable hydrogen by 2030 as “over-ambitious”, saying that they were unlikely to be met and, therefore, shouldn’t be included in carbon reduction calculations.
Fortescue’s executives have been warning that its green hydrogen plans were in trouble for more than a year.
The Australian’s Environment Editor Graham Lloyd says there is a “shift in rhetoric” towards gas from Labor.
Mr Lloyd told Sky News host Peta Credlin that gas has been “excluded” because people were told hydrogen energy would be a ready replacement.
Fortescue will cut 700 jobs and” slow its push” into green hydrogen.
“We’ve been working very, very hard on it,” Fortescue Energy boss Mark Hutchinson told a business summit in March.
“But it’s tough based on the current power prices when we’re looking at competing globally.”
Green hydrogen, it turns out, cannot be plucked out of thin air.
It needs green energy, and it needs a lot of it.
Yet, as Forrest has discovered, green energy in Australia is very expensive.
Sky News host Peta Credlin says Chris Bowen’s green agenda is ‘in tatters’.
Ms Credlin said today we learned that Fortescue will cut 700 jobs and” slow its push” into green hydrogen.
“Which has been a big part of Labor’s gamble to hit its targets.”
Try as they might, Fortescue’s executives have not been able to secure renewable energy contracts at anything close to an affordable price.
That’s why its biggest green hydrogen investment is in Phoenix, Arizona, where carbon-free electricity is plentiful and cheap.
By the way, most of it comes from nuclear reactors.
Yet Mr Bowen dared to tell the Press Club that renewables “are the cheapest form of power, and we’ve got them in abundance”.
Sky News host Chris Kenny says after “talking big” on climate action and green hydrogen, Andrew Forrest’s company Fortescue announced it will cut 700 jobs by the end of the month.
“Speaking of Twiggy Forrest, he has been talking big on climate action for a long while … talked a big game on so-called green hydrogen,” Mr Kenny said.
“This is the sort of stuff the media and the left love to hear … well he is not so sure anymore, Forrest’s company Fortescue announced yesterday its green hydrogen goals will not be met, the company is cutting 700 jobs and admitting it cannot get anywhere near its green hydrogen ambitions.”
He claimed that investing in renewable energy meant cheaper energy bills for homes and businesses.
“Renewable energy is incredibly cheap because its fuel is free because it’s the sunshine and the wind,” he said on Wednesday.
Green hydrogen was the litmus test for this claim.
The only economic way to produce hydrogen in Australia is with coal and gas, the way we have been making it for decades.
In October 2022, Mr Bowen announced a $13.7 million grant to Andrew Forest’s company, Fortescue Future Industries, to scope the conversion of a hydrogen and ammonia facility at Gibson Island in Brisbane to green hydrogen.
Nationals leader David Littleproud has criticised the Albanese government’s green hydrogen plans as a “pipedream” which is only going to “line Twiggy Forrest’s pockets”.
Opposition leader Peter Dutton says he will not quit the Paris Accord or give up on net zero.
It is understood Mr Dutton’s recent dismissal of the 2030 climate target was due to the goal being unachievable.
“We won’t be going to hydrogen – that’s a pipedream that’s only going to line Twiggy Forrest’s pocket,” Mr Littleproud told Sky News Australia.
“Nuclear works in many countries around the world.”
Mr Bowen described the project’s success as “critical” to Australia’s ambition to be a green energy superpower.
Mr Bowen and Anthony Albanese’s green energy superpower dream is over – dead, buried, and cremated.
It is over for the same reason we won’t be getting the $275 reduction on our electricity bills they promised at the last election.
Renewable energy is hellishly expensive.
The incompetent minister who led us down this reckless and expensive path does not deserve to keep his job.
Sky News host Andrew Bolt says “look at reality” as he questions the cost blowouts from renewables amid a new CSIRO report claiming the Opposition’s push for nuclear is “rubbish”.
“If I didn’t look outside, I would almost believe the crowing from the ABC and the Albanese government,” Mr Bolt said.
“They are so happy today because a new CSIRO report claims the Opposition’s plans for nuclear power are rubbish.”
And it was easier to persuade President Joe Biden to step aside than it will be to shift Mr Bowen.
The Minister for Climate Change and Energy remains isolated from reality.
He is still living in a parallel universe and is no longer able to separate fact from fantasy.
Both of them were at one point in time incapable of absorbing the extent of their own shortcomings or recognising that they have lost the trust of their respective employers – the taxpayers of Australia and the US.
Nick Cater is a senior fellow at the Menzies Research Centre and a visiting fellow at the Danube Institute
