Article by Di Stanley, courtesy of GladstoneToday
14.08.2025
The State Government has put hydrogen projects on the back burner in favour of gas peaking generation to drive energy policy and investment.
At a 29 July governance, energy, and finance committee estimates session, Treasurer David Janetzki said State-backing for energy projects was incumbent on financial and operational performance, and hydrogen projects had failed to pass muster.
The collapse of Stanwell’s $12.5 billion CQ-H2 project in early July left a gaping hole in the Gladstone Regional Council’s Industrial Ecosystem Industry Map Economic Transition Roadmap 2022–2032.
“We welcome commercially viable hydrogen projects and investments from the private sector and Federal Government,” Mr Janetzki said.
“But with regard to hydrogen, there have been some clear indicators that the market is in agreement with the sentiment behind our decision not to proceed with funding the Central Queensland hydrogen project.
“Last year, Fortescue Metals Group scrapped a 2030 target for producing so-called green hydrogen, and Fortescue (in mid-July) ended its Gladstone hydrogen project.
“In March, Origin Energy backed away from a joint venture with chemicals giant Orica in the New South Wales Hunter Valley.
“In February, Woodside Energy said it would delay a hydrogen venture in the US and last year ditched early-stage hydrogen plans in Tasmania and New Zealand.
“We welcome commercially viable hydrogen projects and investment from the private sector and Federal Government, but our energy policy is grounded in economics, not ideology, and projects must always stack up,” Mr Janetzki said.
Mr Janetzki said former Premier Anna Palaszczuk had been in agreeance that the hydrogen investment was premature.
“She even said that our decision to not invest in CQ-H2 was understandable,” he said.
“She is not the only one to have lost her enthusiasm. The Leader of the Opposition has not mentioned hydrogen once since the election.”
Mr Janetzki said the government’s targeted strategy of gas peaking generation to provide firming capacity in the grid included $479m in 2025–26 for CS Energy to develop the Brigalow gas peaker project at Kogan Creek.
“This is a critical investment that will deliver dispatchable firm energy when it is most needed to support grid reliability and put downward pressure on wholesale prices,” he said.
He said CleanCo was investigating a new open-cycle gas turbine at Swanbank, while Stanwell was continuing to work with Quinbrook to progress the Lockyer Energy Project — another gas-peaking facility to strengthen capacity in southern Queensland.
“Gas generation is not the enemy of renewables — it is their enabler,” Mr Janetzki said.
“It provides the firming power needed to make renewables viable at scale. It ensures when weather-dependent sources diminish, we can keep the lights on, industry moving and costs down.”
The State Government is soon to release its Energy Roadmap for a coordinated plan for the grid to 2030 and beyond.
“Our approaches includes investment in smaller, manageable pumped hydro projects, expansion of battery storage and ongoing support for coal-fired generation and maintenance, but gas will play a key role in generation and firming capacity,” Mr Janetzki said.