Snowy Hydro chief executive Paul Broad has sensationally resigned following a falling out with energy minister Chris Bowen over the government's vision for the $1.3billion Hunter Power Project.
Mr Broad, who led the organisation since 2013, expressed doubts about the feasibility of the government's pledge to convert the gas peaker into a green hydrogen project.
Snowy Hydro confirmed on Friday that Mr Broad had offered his resignation.
It followed a meeting between Mr Broad and Mr Bowen on Tuesday where a number of matters were discussed, including the Hunter Power Project and Snowy Hydro's $2.2billion cost blowout.
It is understood Mr Broad expressed his doubts about the business case for introducing green hydrogen into the Kurri project.
Another point of contention was Mr Broad's view that more gas-fired peaking plants needed to be built in the Hunter to stablise the energy grid during the renewable energy transition.
In turn, Mr Bowen is believed to have accused Mr Broad of leaking information about the Kurri project to the Newcastle Herald, a claim Mr Broad denies.
Mr Broad's departure casts doubts over the future of the 660 megawatt peaker, which was announced by the Morrison government in 2020 to help compensate for the closure of Liddell power station.
The project is due to open late next year. It will initially run on diesel while a gas lateral from the Sydney to Newcastle gas pipeline to Kurri is completed.
Sensing an opportunity to attract voters opposed to the Coalition's gas-fired vision, Labor announced during the election campaign that the project would be converted to a green hydrogen plant.
It pledged to inject an additional $700 million into the project, which it said would develop the Hunter Region into a green hydrogen powerhouse, driving economic growth and new jobs in the region.
Prime Minister Anthony Albanese and energy minister Chris Bowen promised the project would run on 30 per cent green hydrogen from the start of operations.
However, the reality of the challenges surrounding the use of hydrogen technology in power generation soon hit home. The green hydrogen pledge has since been wound back to "as soon as possible" or "soon as practicable".
Paterson MP Meryl Swanson, whose electorate takes in the plant, said she had sought to speak with Mr Bowen urgently about Broad's departure and the and the project's future.
"In my dealings with Paul he has never been anything but energised by the challenge of making this project work. He is a well respected administrator and operator of utilities and has a long history of doing a good job. In our last conversation he assured me that Snowy was well on track to come up with some really good solutions regarding hydrogen. I wish him well for the future and I thank him for the work that he has done."
A spokeswoman for Mr Bowen said Mr Broad's resignation had been noted.
"The government values Snowy Hydro and its critical role in supporting a changing grid," she said.
"The Albanese government notes the resignation today of SnowyHydro chief executive after almost 10 years of service and thanks him for his work in the energy market over that period."
Before joining Snowy Hydro in 2013, Mr Broad, 71, led Hunter Water, Sydney Water, Energy Australia, PowerTel and Infrastructure NSW in 2011.
It has been reported that Mr Broad's salary was $2.25 million during his tenure at Snowy Hydro.
It is normal practice for a chief executive in his position to be paid out given the circumstances of his departure.
Opposition climate change and energy spokesman Ted O'Brien said he was deeply concerned that a "seasoned industry executive" had resigned over expressing doubts about the Kurri project.
"Bowen is on an energy rampage as he seeks to shut down the voices of industry experts that have a different point of view," he said.
"Bowen's plan to convert the Hunter Gas Power project would cost taxpayers an additional $700 million and he has failed to detail the economics of his green hydrogen plan for the facility,"
Hunter-based National Party senator Ross Cadell said he was appalled to hear of the circumstances surrounding Mr Broad's departure.
"This is like the Starlinist purges of old; if you tell the truth and the government doesn't like the answer they get rid of you rather than fix the problem," he said.
"There isn't enough copper, nickel, lithium or cobalt in the world right now to meet Labor's transmission goals. They are only just starting to realise that which means they have to start shutting things down."
NSW Parliamentary secretary for the Hunter, Taylor Martin, who chaired an Upper House committee into the development of a hydrogen industry, said Mr Broad had paid the price for "speaking truth to power".
"Hope it's not a look at what's to come from this new federal government when it comes to taking advice from energy experts. Seems they only want to hear what suits their agenda."
Ms Swanson, who has steadfastly supported the peaker from day one, said it was essential that the project proceed.
"Everyone that I speak to who is involved in industry, and anyone who has a deep and thorough understanding of the energy market in our region assures me that it is required.
"I am also in favour of it having a hydrogen capacity. I've always said from the get go, it would take time and it needed to be done with an eye to the future and a responsibility to taxpayers' money."
The Gas Free Hunter Alliance, said the federal government must now deliver its promised green hydrogen power plant.
"The Hunter was promised a power plant that runs on green hydrogen and that's what should now be delivered," spokeswoman Fiona Lee said.
"We look forward to seeing Paul Broad replaced with someone who can deliver on this."
"Paul Broad is no exception to that rule," the statement said.
"Since 2013, Paul has led organisational expansion and innovation, transforming Snowy Hydro into a dynamic and integrated energy business."
It said Mr Broad was best known for his leadership on Snowy 2.0 and leading Snowy Hydro's expansion into retail and renewable energy.
"Under Paul's leadership, the first Snowy Hydro renewable energy procurement program began in 2018 and has grown to encompass 12 contracts with wind and solar projects totalling 1.3 gigawatts of energy generation," the statement said.
"For the local community and Snowy Hydro team, Paul will remain best-known for his extraordinary leadership during incredibly challenging periods, including the 2019/2020 bushfires and the COVID-19 pandemic."
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