CASE STUDY - INVESTMENT DECISION (February 2019)
The project will enable Alinta Energy to supply electricity to Fortescue Metals Group Ltd (Fortescue)’s Chichester Hub iron ore mines, allowing daytime operations at the mining hub to be among the first globally to demonstrate up to 100% of its daytime power requirement by renewable energy.
LOCATION: East Pilbara, Western Australia
PROPONENT: Alinta Energy Pty Ltd
NAIF LOAN: Up to $90m
TOTAL PROJECT VALUE: $188m
PUBLIC BENEFIT: $221m, Around 200 construction jobs
Chichester Solar Gas Hybrid project
About the Project
The project offers the opportunity to make a long term difference to the East Pilbara as through it Alinta Energy will provide low emission renewable energy generation for large off grid customers in the Pilbara.
NAIF’s loan will be used to help Alinta Energy install electricity infrastructure at Fortescue’s Cloudbreak and Christmas Creek mines which are currently powered by standalone diesel generators with the new facilities. The project innovatively combines solar and gas fired power to compensate for the variability of solar sourced energy. The majority of daytime power will be all renewables and the remaining power requirements will be met from Alinta Energy’s existing gas fired power station and battery facility in Newman.
There is also potential for new mining operations, regional communities and pastoral stations to access electricity generated through the project.
Financial close on the project is pending at time of printing.
- 60 MW Solar PV power station.
- Transmission infrastructure.
- Substations to supply electricity.
The Value NAIF Brings
NAIF’s $90m loan is provided on the basis of concessional longer tenor and lower pricing than would be generally available from commercial financiers to assist the Project’s cost competitiveness against cheaper options with no renewables and which would generate much lower public benefit.
- Targets of 3% employment (project labour hours) and 3% procurement supported by an Indigenous Participation Plan that engineering, procurement and construction contractors working on the project must comply with.
- Investment in a range of strategies to support Indigenous training and education throughout the operations phase of the project.
Economic Impact and Public Benefit
- Deloitte Access Economics in an independent cost benefit analysis forecast public benefits of $221m.
- Around 200 jobs during construction phase.
- An important step towards a broader interconnected network across the Pilbara with the potential to improve accessibility, efficiency, reliability and costs across the region for both businesses and residents.