Rio Tinto has signed Australia's largest renewable power purchase agreement (PPA) to date, agreeing to buy the majority of electricity from Windlab's planned 1.4GW Bungaban wind project to power its Gladstone operations in Queensland.
The deal follows a PPA announced last month for the Upper Calliope solar farm in Queensland, making Rio Tinto the largest industrial purchaser of renewable electricity in Australia and marking another major step in its efforts to repower its Gladstone producing assets – Boyne Aluminium Smelter, Yallun Alumina Refinery and Queensland Alumina Smelter.
Under the new PPA with WindLab, Rio Tinto will purchase 80% of all electricity generated by the Bungabang Wind Project over a 25-year period. The project, which is currently in the early stages of development, will be built and operated by WindLab approximately 40 kilometres from the Queensland city of Wandoan and 290 kilometres southwest of Gladstone, subject to development and grid connection approvals.
The remaining 20 percent of the electricity generated by the project will be fed into Australia's national electricity market, providing clean power to homes and businesses.
“This agreement with Windlab further builds momentum in our efforts to rebuild our Gladstone operations and deliver a sustainable future for heavy industry in Central Queensland,” Rio Tinto chief executive Jacob Stausholm said.
The PPA marks the second renewable power agreement for Rio Tinto's Gladstone operations, following a recent agreement with Europa Energy to advance the development of the 1.1GW Upper Calliope solar farm.
“Competitive capacity, stabilisation and transmission are vital to developing a modern energy system that will ensure greater redevelopment in Queensland and help secure the future of Australian industry,” Mr Stausholme said.
If developed, Windlab's combined 2.2GW renewable energy PPA with European Energy could potentially reduce carbon emissions by around five million tonnes per year and generate enough electricity to meet 10% of Queensland's current electricity demand.
Windlab CEO John Martin said “This agreement highlights the importance of large-scale renewable energy projects in supporting Queensland's key traditional industries, particularly minerals and advanced processing, which employ thousands of people in communities across the state and play a key role in our country's low carbon future.”
The Bungaban PPA will bring more renewable energy to one of Australia's most important industrial locations and is another step towards Rio Tinto's climate target of achieving global Scope 1 and Scope 2 carbon emissions by this decade. Combined with more renewable energy and the right stabilisation, transmission and industrial policies, the Bungaban and Upper Calliope PPAs could also be the core solution for regeneration of Rio Tinto's three Gladstone producing assets.
“Bungaban is a significant transition opportunity that will create up to 600 new construction jobs in Queensland and inject approximately $500 million into the regional economy through local supply and exchange,” Mr Martin said.
If approved, construction on the Bengaban project is expected to begin in late 2024 and be producing electricity by 2029, employing up to 600 people during construction and supporting up to 30 full-time jobs when operational.
“The project will be developed responsibly and connected to the grid, producing enough energy to power 740,000 Queensland homes by 2029 and removing approximately four million tonnes of carbon from the state's generation profile each year,” Mr Martin said.
Rio Tinto will continue to engage with potential partners to evaluate other proposals to competitively meet the energy needs of its three producing assets in the Gladstone region.
