Australian mining giant BHP has signed a new and bigger “baseload renewable” supply agreement with Neoen, in a deal that will underpin the development of Neoen’s new Goyder North wind project and a new big battery at the site.
The deal, announced on Wednesday, involves a baseload electricity arrangement equating to 100 megawatts (MW) of renewable power for BHP’s massive copper mining province in South Australia, including the Olympic Dam mine, its smelter and refinery, and the operations at Carrapateena and Prominent Hill.
The supply deal – due to commence in 2029 – will be met by the first 300 MW of the new Goyder North wind project near Burra, and from the newly announced Goyder battery, which will be sized at a minimum of 200 MW and 800 MWh.
Both projects are likely to grow in size over time, with Neoen looking to grow Goyder North to 1 gigawatt, and plans for the battery component to grow to up to 900 MW and 3,600 MWh, making the Goyder zone the biggest of its kind in Australia.
BHP already has a “baseload renewable” supply of 70 MW from Neoen, sourced from the 412.5 MW Goyder South wind farm and the newly completed Blyth battery, which came into effect in July. It also has a supply agreement with the Port Augusta renewable energy park which combines wind and solar.
Anna Wiley, the asset president of Copper SA at BHP says the giant mining operations will receive 70 per cent of its power needs directly from renewables as a result of the supply agreements. The rest comes from the local grid, which is already dominated by renewables in any case.
“BHP’s Copper SA operations are taking another step forward in our decarbonisation journey with its third renewable power arrangement,” she said in a statement.
“We are using the size and scale of our copper operations to underpin significant new investment in renewable electricity in South Australia.”
The deal is significant for a bunch of reasons. The confirmation of the deal for Goyder North – already named a winner under the federal government’s Capacity Investment Scheme tender – and the much speculated Goyder battery is another coup for Neoen, now owned by Brookfield.
It confirms the Goyder province as one of the country’s biggest and most prospective renewable hubs. Neoen has envisaged up to 1200 MW of wind, 600 MW of solar and 900 MW of battery storage at the combined sites.
It is also significant for the debate around renewables in Australia, and their ability to supply big industry. BHP has taken a very conservative approach to the technology, but is now more or less all in on one for one of its biggest and most valuable assets.
Rio Tinto is doing the same, locking in a series of large power purchase agreements with wind farms and solar-battery hybrids to try and secure the future of its own smelters and refineries in Gladstone, Queensland, which it has made clear cannot survive beyond the end of this decade if they have to rely on coal.
See: Rio Tinto signs massive solar and battery deal to help secure future of smelters and refineries
And the confirmation of Goyder North – and yet another big battery – will help proper South Australia to and beyond its target of 100 per cent “net” renewables by 2027.
Wind and solar, backed by battery storage, already supplies 75 per cent of the state’s annual electricity demand, and reached an instantaneous peak of 155 per cent a few days ago.
Neoen expects these two assets to create up to 550 construction jobs and 20 permanent jobs, supporting regional employment while contributing to the state’s energy transition. It expects to sign off on the wind construction next year, and possibly earlier for the battery.
It says the assets will be built in stages, and will also deliver benefit-sharing contributions to First Nations peoples, the local community and the environment. Goyder South unlocked the creation of a new national park at Worlds End Gorge, an award-winning industry first initiative.
“This second agreement to supply power to BHP demonstrates Neoen’s end-to-end expertise in designing, delivering and deploying customised energy solutions that can meet the growing demands of its customers and support the pace of Australia’s transition,” said Jean-Christophe Cheylus, the head of Neoen Australia.
BHP says it aims to cut operational greenhouse gas emissions (Scopes 1 and 2 emissions from its operated assets) by at least 30 per cent by FY2030 from an adjusted FY2020 baseline. It says the deal with Neoen means its South Australian copper operations will source around 70 per cent of its electricity needs from renewables by 2030.
“Copper is one of the most critical minerals in enabling the global energy transition,” said Michiel Hovers, the head of sales and marketing at BHP.
“As global demand for copper continues to grow, BHP is making significant progress in lowering the greenhouse gas emissions intensity of our copper production in South Australia.
“We’ve built a strong partnership with Neoen, which has helped BHP to make further reductions in our operational greenhouse gas emissions and will allow us to continue to deliver responsibly produced copper for our global customers.”
See also: Renew Economy’s Big Battery Storage Map of Australia
