Australia’s largest gas pipeline company APA Group has unveiled plans to build a new large off-grid solar and battery project, underpinned by a deal to supply a mix of firmed renewables and gas to a copper, gold, and silver mining operation in remote regional Queensland.
APA said on Thursday that it had reached a final investment decision to build, own and operate the 72 megawatt (MW) Sybella Creek Solar Farm (SCSF) and the 52 MW 104 megawatt-hour battery energy storage system (BESS) in Mount Isa.
The ASX-listed gas giant, which owns and operates more than 15,000 km of pipelines, says it will invest $259 million in the project, underpinned by an Energy Supply Agreement (ESA) with Ernest Henry Mining, a wholly owned subsidiary of Evolution Mining, until mid-2046.
It will be the group’s second solar farm in the region, following on from the completion of the 88 MW Dugald River solar farm in 2024.
APA says that together with the company’s existing gas-fired Diamantina Power Facility, the solar and battery systems will provide “a holistic, lower emissions energy solution” for Ernest Henry’s operations, and improve its reliability at a lower cost.
“The BESS will enhance network reliability and resilience for Ernest Henry Operations, and more broadly, mining customers and the local community across the North West Power System,” the company says.
APA, like other vertically integrated energy companies, is increasingly moonlighting in the development, generation and supply of renewable energy, with a growing portfolio of contracted power generation including 342 MW of wind, 356 MW of solar and 75 MW of BESS, and a development pipeline of more than 1 gigawatt (GW).
“Our approach is to invest in reliable generation capacity while progressively integrating more flexible [gas power generation], renewable energy and energy storage solutions over time to support both system reliability and lower emissions intensity outcomes,” the company said.
“We also progressed engineering studies into remote microgrids (solar and battery systems) to replace diesel and gas electric alternators.”
The company has also marked the first full year of operation of the 45 MW solar farm and 35 MW BESS installed next to its Port Hedland gas-fired power station in Western Australia, and says it is in the process of adding more solar capacity at that project, as well as new reciprocating gas engines.
APA CEO and managing director Adam Watson stressed that the gas giant – which also has 884 MW of gas power generation assets in its portfolio and is co-developing the 400 MW Brigalow gas peaking plant in Queensland – says its push into solar and battery storage driven by economics and customer demand.
“Very importantly … you don’t get any of these projects off the ground if your customer’s not generating a lower levelised cost of energy,” he told a webcast with analysts and media following the company’s results announcement.
“A thing that we’re really proud of is that we’ve got to deliver a customer with a solution, lower their cost, provide them with a really attractable renewable outcome, and have that firmed by the Diamantina Power Station.”
“In addition to supporting further efficiencies in the operation of the [existing gas plant], this project diversifies our customer base, supports ongoing earnings growth and will further improve energy security in Mount Isa,” Watson said in a separate statement.
“The project also builds further momentum in our remote power generation growth strategy.”
APA says construction of the Sybella solar and battery project is expected to start later this year, with project completion targeting mid-2028. And Watson says that it’s likely to be just the first in a range of projects that will use renewable energy and battery storage to help power mining and other remote operations.
This would fit with what is rapidly becoming the norm for remote mining operations, led by examples like the Bellevue gold mine in remote Western Australia, whose solar, wind and battery backed power supply has achieved average renewable shares of well above the 80% it targeted, often reaching into the 90% an average 93.8 per cent over February.
As Renew Economy has reported, a number of different off-grid mines are achieving very high level of renewables – usually much higher than predicted – with Lynas Gold achieving a record 95.7 per cent renewable share over the entire March quarter at its Mt Weld lithium mine.
Another lithium miner, the Kathleen Valley facility operated by Liontown Resources, has also achieved high share of renewables above 80 per cent on a consistent monthly basis, shielding it from the recent surge in diesel prices.
A key difference for APA is its existing gas generation platform and its designs on powering data centres, as well as traditional miners.
“When you think about about our remote strategy and use Sybella, which we announced today, as an example, that is a behind-the-meter solution,” Watson told the webcast on Thursday.
“So we are able to bring renewable power generation to the market with a battery and firmed by an existing facility.
“We’ve got a real skill set and capability in being able to bring that together efficiently and effectively for our customers. We’ve got multiple sites that are very attractive for behind-the-meter solutions that can either be used for power generation to support our power generation customers, or it can be used for data centres,” Watson said.
“We’re not trying to suggest that we’re just going to come and build something and connect you into the grid. We’re saying that we’ve got a lot of land, where you’ve got the supply of gas and the supply of electricity traversing, and yeah, that may be attractive for a data centre.”
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