Rio Tinto signs massive solar and battery deal to help secure future of smelters and refineries

Mining giant Rio Tinto has signed a massive solar and battery storage deal with Australian company Edify Energy that helps secure the future of its Gladstone-based smelter and refineries that are among the country’s biggest consumers of energy.

The deal with Edify Energy is particularly significant as it includes a giant battery, sized at 600 MW and 2,400 MWh, that helps fill the gap for “dispatchable” generation to ensure that the Boyne Island smelter and the Yarwun and Queensland alumina refineries have power when they need it.

Rio Tinto had already signed the two biggest renewable energy power purchase agreements, with the proposed 1.4 GW Bungaban wind project and the 1.2 GW Upper Calliope solar project.

The deal with Edify is even bigger, and will include 600 MW of solar from the neighbouring Smoky Creek and Guthrie’s Gap solar farms, as well as the battery, which will be the biggest DC-coupled battery in Australia.

“These agreements are integral to repowering our Gladstone aluminium operations with affordable, reliable and lower carbon energy for decades to come,” Rio Tinto Australian chief executive Kellie Parker said in a statement.

“For the first time, we have integrated crucial battery storage in our efforts to make the Boyne aluminium smelter globally cost-competitive, as traditional energy sources become more expensive.”

“We continue to investigate further renewable energy investments to repower our Gladstone aluminium operations.”

It appears that the plunging cost of battery storage has been the breakthrough in this contract, and for the future viability of securing cost effective renewables and firming capacity. Firming had been seen as its major hurdle.

Rio Tinto’s global head of aluminium Jerome Pecresse recently visited the Australian smelters, and noted that their dependence on coal put them on the wrong side of the emissions and cost curve. But he said then that the falling cost of battery storage was promising.

“We have made very good progress in that direction for our Boyne smelter in Gladstone (Queensland) and have very good reasons to believe that, in addition the support of the recently-announced Federal green aluminium scheme, we can get this smelter into a much more competitive and long-term viable position,” he said in a LinkedIn post.

“There is no reason why, in some places, (firm and reliable supply) cannot be achieved via a mix of intermittent renewables, provided that this mix is ‘firmed’ via batteries and other sources.

“The hurdle here is not technical, it is, … the overall net economic cost of the combined solution. This is materially helped by the continuous downward trend of battery costs, but the incremental cost of the last percentages of firming can indeed prove expensive.”

Rio Tinto says that it now has enough capacity to supply 80 per cent of the Boyne smelter’s annual average electricity demand, and about 30 per cent of the “firming capacity”, which it has identified as the toughest part of the equation.

It says the battery will store green energy for reliable use during peak demand periods or low solar output, which will also improve stability and resilience of Queensland’s power network. And it is looking for more deals.

“We continue to investigate further renewable energy investments to repower our Gladstone aluminium operations,” Parker said.

It hasn’t said so, but an obvious candidate are the huge eight-hour battery projects planned by Quinbrook Infrastructure, which includes a facility near Gladstone, also paired with a big solar farm.

The Edify deal is significant because it makes a nonsense of the claim – made by the federal Coalition and by the fossil fuel industry – and amplified by conservative media and nuclear boosters – that going renewable means the end of manufacturing in Australia.

The deals by Rio Tinto, and target of “real zero” by 2030 at Fortescue Metals’ massive Pilbara iron ore operations, and the success of South Australia in attracting new industry shows that the opposite is true – manufacturing in Australia will die quickly if it has to continue to depend on coal fired generators, or wait for even more expensive nuclear.

Rio Tinto says its aluminium production chain in Queensland is a significant economic driver for the state and Australia, directly employing over 4500 people and supporting thousands more livelihoods. The company’s operations in Gladstone alone account for more than 3000 jobs, with 1000 of those at the Boyne smelter.

It is seeking similar renewable energy and storage deals for the giant Tomago aluminium smelter near Newcastle in NSW that it jointly owns.

Edify Energy says it will build, own, and operate the Smoky Creek and Guthrie’s Gap DC-coupled solar and battery projects, with construction due to begin later this year, and completion targeted for 2028. It is currently seeking suppliers for the project. It will be the biggest DC-coupled battery

“The Smoky Creek and Guthrie’s Gap solar power stations deliver the latest in solar, battery and inverter technology to support Australia’s power needs,” Edify CEO John Cole said in a statement.

“This collaboration is an important commitment to supporting the sustainable future of Australia’s industrial sector. We are proud to advance Rio Tinto’s goals to repower its Gladstone operations and to play a role in the transition to a low-carbon economy.”

The solar farms received federal environmental approval in late 2023, but the local federal MP Colin Boyce (LNP) opposed the project, saying that “reckless” renewables will lead to runoff, homelessness, job losses and destroy farming country. His complaint did not mention the giant smelters, which are also in his electorate.

The announcement came in the same week that it was revealed that the Bungaban wind project – one of four big projects frozen by the new LNP state government over concerns they had not properly consulted with local communities – was allowed to continue its passage through the state planning process.

See: Flicker of hope as LNP allows first of four frozen wind projects to seek planning approval

Rio Tinto has singed up to take 1.2 GW of the 1.4 GW Bungaban wind capacity, along with 1.1 GW from European Energy’s Upper Calliope solar project, and 540 MW from the Edify solar assets. Rio’s share of the battery systems amounts to 2,160 MWh a year.

Together, they will reduce the smelter’s scope 1 and 2 emissions by around 70 per cent, or 5.6 million tonnes of carbon dioxide equivalent per year. Rio Tinto says this is the equivalent of removing about 2 million internal combustion engine cars from the road.

See also Renew Economy’s Big Battery Storage Map of Australia for more information.