Port Kembla Energy Hub

About the Project

Australian Industrial Power (an entity of Squadron Energy) is proposing the development of the Port Kembla Energy Hub which will include Australia’s largest dual-fuel (gas and green hydrogen) Power Station at Port Kembla, New South Wales

The Power Station will deliver a new source of large-scale dispatchable, safe, reliable and lower emission electricity to support the growth in renewable energy.

The Project is being configured for the future decarbonisation of the electricity grid with the capability of operating on 50% green hydrogen by volume from its first commissioning, with a development pathway for operation on 100% green hydrogen by 2030.

The Power Station will be a high efficiency combined cycle unit with a peak capacity of 660MW (635MW nominal) into the grid and will deliver a new source of large-scale dispatchable, safe, reliable and lower emission electricity to support the growth in renewable energy.

The project will also involve the construction of a transmission line to connect the proposed power station to the broader electrical system.

NSW’s need for more power

The Power Station will use 21st century technology to produce safe, reliable, and lower emission electricity to support the ever-growing energy needs of NSW.

The current electricity system in NSW is under increasing pressure due to the state’s ageing infrastructure and market forces. The planned retirement of ageing power stations will remove significant capacity across the National Electricity Market. The scale of the Power Station means it can respond to large changes in the supply and demand balance and will act to create a cap on electricity prices. This will help support economic growth and improve the economic viability for all businesses and energy users across NSW. The Power Station aims to supply electricity to the National Electricity Market by the summer of 24/25, subject to planning approvals.

The transition to renewable energy

The Power Station is being designed with the future in mind and will be built to support a transition to green hydrogen. This dual LNG and green hydrogen energy plant will be capable of operating on 50% hydrogen and 50% natural gas from its commissioning and is projected to operate on 100% green hydrogen by 2030. We are committed to developing solutions that promote the rate of transition to a renewable energy future.

The project was shortlisted under the Commonwealth Underwriting New Generation Investment (UNGI) scheme. The UNGI program was established to support firm generation capacity and increase competition as part of the Australian Government’s commitment to lowering electricity prices and increasing reliability in the system. AIP has been working collaboratively with the Commonwealth to agree commercial terms of the UNGI agreement that will allow the project to proceed.

The terms of the UNGI agreement, whilst not yet final, will mean the project will be funded by a combination of equity from AIP and bank debt, underwritten by the Commonwealth.

Subject to execution of formal project documentation, timely planning, environmental and grid connection approvals, the project could be constructed and be able to supply electricity directly to NSW customers during the summer of 24/25.

Artistic Impression of Port Kembla Energy Hub

Project Benefits

The project aims to:

provide a secure source of large-scale mid-merit electricity, thus supporting the more rapid development of renewable electricity;
put downward pressure on wholesale and retail electricity prices in keeping with the energy policy of Federal and State Government;
provide additional low emission choices to the market;
introduce new competitive forces (price and term of contract) in the electricity supply;
establish NSW’s largest mid-merit hydrogen capable power station;
provide a potential large-scale off-take for local green hydrogen supplies;
contribute to the investment attractiveness, workforce diversification and skills-base of the Wollongong area;
inject ~$1200million capital investment into the economy; and
create 600 -700 (est.) construction jobs and 25 – 35 (est) on- going jobs.

Current Opportunities

Currently we are in the market for three major packages of work, these are:

Package 1: Power Station
Package 2: HV Transmission Line
Package 3: Switching Station

While the project is at an early planning stage, we are committed to maximising our local sourcing strategy whenever feasible. As such, we are open to local suppliers registering their interest and explaining their capabilities.

Future Opportunities

As we are in the early stages of development, it is important to note that once tenders have been awarded, further opportunities may be available. We welcome and encourage local businesses and service providers to register their interest in the project.

Registration of Interest

To register your interest fill in the form below and briefly tell us about your business. We will then provide you with regular updates on opportunities to get involved with the project.

Project Location

Ideally located near the Port Kembla to process incoming green hydrogen shipments and, in the interim, near the Port Kembla Gas Terminal, the proposed site is 2km from the nearest residential area.

Why Port Kembla?

Port Kembla was selected following a detailed engineering assessment into potential locations in the Illawarra region and had the benefit of being near the new Port Kembla LNG Terminal. This terminal will supply LNG gas to the power station to generate electricity for NSW in the initial phase.

The proposed location is also an existing industrial area, located over two kilometres from the nearest residential housing area and well away from the local airport.

Energy Hub Location

The energy hub is proposed to be located at the Berth 101 site, immediately adjacent the Port Kembla Gas Terminal in the Inner Harbour of Port Kembla.