A new report has found that a coordinated approach to the construction of electricity transmission and generation infrastructure in Western Australia’s Pilbara region could save more than $30 billion over the next 25 years.
The Pilbara, with its heavy industries dominated by iron ore mining and liquified natural gas (LNG) production, is one of Australia’s most significant industrial regions, contributing a third of national exports and nearly 20 per cent of Western Australia’s total economic output.
At the same time, the Pilbara accounts for around 23 per cent of Australia’s industrial emissions (under the national safeguard facility) and 40 per cent of Western Australia’s total emissions, due to its remote location and reliance on largely diesel-fuelled, off-grid power systems.
A report prepared for the Clean Energy Finance Corporation (CEFC) finds that to properly decarbonise the Pilbara’s industrial activities requires significant electrification – and that using a shared transmission approach to this task could save in excess of $30 billion over the next 25 years.
The report, Common user transmission and decarbonising Pilbara energy demand weighs the pros and cons of electrifying the Pilbara region, the scale of investment needed, the benefits of creating a shared network, and the opportunity for future decarbonised expansion.
A common user transmission infrastructure (CUTI) system, one which transfers power from renewable generation hubs to major demand centres at liquefaction facilities, mines, strategic industrial areas, and ports and rail, compares favourably to a so-called miner “go-it-alone”.
The study finds that a CUTI approach to electrifying and decarbonising the Pilbara would cost significantly less than a “go-it-alone” approach – $126 billion compared to $157 billion between 2025 and 2050 – including a saving of $4 billion in avoided transmission costs and $26 billion in avoided generation and storage costs.
A CUTI approach would also likely reduce land requirements for transmission and result in a 29 per cent reduction in new transmission line length, as well as reduce the amount of renewable energy generation by 16 per cent.
It would also avoid unnecessary duplication of assets and improve access for a wider range of users, including smaller miners and emerging green players.
Conversely, for example, a lack of a common user approach in the rail sector has led to parallel infrastructure resulting in increased land disturbance, creating challenges for Traditional Owners and limiting access for smaller players.
Considering that around 98 per cent of the Pilbara’s energy is currently generated from fossil fuels, there is a long and expensive road to travel to reach the electrification and decarbonisation necessary to hit emissions reduction targets.
However, the CUTI approach also allows for greater flexibility over the long term, especially if the region’s renewable energy resources are tapped to greatly increase complete electrification, replacing both diesel and LNG.
Without such a common approach, the report’s authors conclude that “it is very unlikely” that such a complete electrification could ever be achieved.
“This is a clear opportunity to build it once and build it right,” said Rob Wilson, CEFC executive director for WA and Resources.
“The economic case is overwhelming. And the coordination required is both achievable and essential.
“The cost of delay is enormous. It takes years and many millions of dollars in early investment to identify corridors, conduct engineering, and secure approvals. Without increased commitment from stakeholders now, the region risks defaulting to expensive and inefficient solutions.
“There are significant benefits for the major Pilbara miners of working together, rather than individually funding inefficient subscale systems,” Wilson concluded.
“In addition, mid-tier miners, Pilbara industry, and future green industry would benefit from being able to access a grid. Everyone can win under this coordinated approach, but it requires urgent cooperation, coordination and leadership.”
