Snowy Hydro chief executive Paul Broad says "a lot more" gas power stations will be built in Australia after the federal government finishes its Kurri Kurri plant.
Mr Broad, Energy Minister Angus Taylor and Environment Minister Sussan Ley gathered at the site of the Hunter Power Project outside Kurri Kurri on Monday to announce Ms Ley's final approval for the 660-megawatt "peaking" plant.
Mr Taylor said the plant was on schedule to open next year when AGL closed Liddell power station.
Ms Ley's approval drew renewed criticism from green groups and some energy analysts who believe the plant will be a stranded asset as the nation transitions to renewables.
But Mr Broad and the two cabinet ministers said the project, which Labor backed last week on the proviso it starts using green hydrogen instead of gas as soon as possible, was the only way to secure reliable and affordable electricity as more renewables came online.
Mr Broad said the project's doubters should "go and look in Europe".
The European Commission announced last week that it planned to classify some gas and nuclear plants as transitional green projects to encourage private investment, a move which has angered environmentalists and some members of the European Parliament.
The European proposal says gas plants which replace coal generators, as Kurri Kurri will do, and meet emissions criteria will be classified as sustainable investments.
"This won't be the only gas plant built in this country. There'll be more, a lot more," Mr Broad said.
"You can't have base-load power going and renewables in without firming."
Ms Ley said the new plant was "critical to the future environmental mission of the Morrison government".
Mr Taylor, Ms Ley, Liberal Paterson candidate Brooke Vitnell and Shortland candidate Nell McGill pushed the job-creating and job-securing benefits of the project.
Asked how many people it would employ once open, Mr Taylor said the construction phase would require 600 workers directly and 1200 indirectly.
Pressed on the permanent workforce numbers, he deferred to Mr Broad, who said the plant would employ 12 people.
Mr Taylor criticised Labor's plan, which will add up to $700 million in construction costs to the plant.
"The idea that you feed green hydrogen in from day one in large quantities will simply raise the cost and make this uneconomic and/or drive up the price of electricity," he said.
"We want to see hydrogen fed into this generator as soon as it is economically feasible, but we will not force it in in a way which is going to drive up the price of electricity."
The NSW government approved the project last year after 159 of 161 public submissions opposed it.
A handful of Gas Free Hunter Alliance members protested outside the plant site on Monday.
"Today's announcement is bad for the Hunter and bad for Australia," alliance coordinator Fiona Lee said.
"As Commonwealth Environment Minister, Sussan Ley should be protecting the environment, not rubber-stamping dirty, outdated fossil-fuel projects."
Ms Vitnell said the community wanted the plant.
"Absolutely, the voters in Kurri Kurri, in particular, want to see this project eventuate," she said. "They welcome this investment. They welcome the injection of jobs in the construction phase. This is a positive announcement for the township of Kurri Kurri."
Reuters reported last week that European power prices were soaring as global gas prices hit record levels, forcing governments to plough billions of euros into measures to shield consumers.
Analyst Bruce Robertson, of the Institute for Energy Economics and Financial Analysis, said Labor's decision to back the Kurri Kurri plant last week was "cynical" and "based on politics".
"The decision will unequivocally raise future electricity prices for the Australian consumer," he said. "This project is poorly located on a gas line that cannot even supply it with sufficient gas and is now proposed to be powered by hydrogen, a technology that's unproven and whose costs are unknown."
He said the market had already added enough capacity to replace Liddell.
Climate action group 350 Australia senior campaigner Shani Tager said the plant was "burning public money" and "flies in the face of climate science".
"Even the Liberals' own energy market operator says this isn't needed," she said.
Paterson Labor MP Meryl Swanson said the party had not "backflipped" by agreeing to support the plant last week.
"What we are proposing is different and better," she said.
"The government proposed a gas plant with limited future green hydrogen capacity that it would not commit to.
"Labor will ask Snowy Hydro to run the plant on 30 per cent green hydrogen from the start, and 100 per cent by 2030."
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