REG - Rio Tinto - Australia’s biggest renewable power deal

Rio TintoAnnouncement

21/02/2024 07:00

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RNS Number : 8371D  Rio Tinto PLC  21 February 2024

 

Notice to
ASX/LSE

 

Rio Tinto signs Australia's biggest renewable power deal as it works to
repower its Gladstone operations

 

21 February 2024

 

Rio Tinto has signed Australia's largest renewable power purchase agreement
(PPA) to date to supply its Gladstone operations in Queensland, agreeing to
buy the majority of electricity from Windlab's planned 1.4GW Bungaban wind
energy project.

 

The agreement, which follows the announcement
(https://www.riotinto.com/en/news/releases/2024/rio-tinto-to-drive-development-of-australias-largest-solar-farm-at-gladstone)
last month of a PPA for the Upper Calliope solar farm in Queensland, will make
Rio Tinto the biggest industrial buyer of renewable power in Australia and is
another major step in the work to repower the company's Gladstone production
assets - Boyne aluminium smelter, Yarwun alumina refinery and Queensland
Alumina refinery.

 

Under the new PPA with Windlab, Rio Tinto will buy 80% of all power generated
from the Bungaban wind energy project over 25 years. The project, which is
currently in early development, will be built and operated by Windlab at a
site in Queensland about 40 kilometres from the town of Wandoan, and 290
kilometres south-west of Gladstone, subject to development and grid connection
approvals.

 

The remaining 20% of the project's generated electricity will supply
Australia's National Electricity Market, delivering clean electricity to homes
and businesses.

 

The PPA is the second renewable power deal signed for Rio Tinto's Gladstone
operations, after the recent agreement signed with European Energy to drive
development of the 1.1GW Upper Calliope solar farm.

 

Once developed, the combined 2.2GW of renewable PPAs with Windlab and European
Energy have the potential to lower carbon emissions by about 5 million tonnes
per year and could generate the equivalent of 10% of Queensland's current
power demand.

 

The Bungaban PPA will bring more renewable power into one of Australia's most
important industrial hubs and marks another step towards Rio Tinto's climate
goal of halving its global Scope 1 & 2 carbon emissions this decade. If
combined with more renewable power and suitable firming, transmission, and
industrial policy, the Bungaban and Upper Calliope PPAs could also provide the
core of a solution to repower Rio Tinto's three Gladstone production assets.

 

Rio Tinto Chief Executive Jakob Stausholm said "This agreement with Windlab
builds on our momentum in our work to repower our Gladstone operations and
provide a sustainable future for heavy industry in Central Queensland.

 

"The task remains challenging, but we have a pathway to provide the
competitive, firmed power our Gladstone plants need and we are continuing to
work hard with all stakeholders, including the Queensland and Australian
governments, on getting there.

 

"Competitive capacity, firming, and transmission, are critical to developing a
modern energy system that can ensure more large-scale renewables development
in Queensland and help guarantee the future of Australian industry."

 

Once approved, construction of the Bungaban project is targeted to start in
late 2025 and is expected to produce electricity by 2029, employ up to 600
people during construction and support up to 30 permanent jobs when
operating.

 

Windlab CEO John Martin said "Securing this PPA is a major milestone for the
Bungaban project and a strong signal of the project's value from the market.

 

"Windlab is very proud to be partnering with Rio Tinto to support the
long-term sustainable future of Rio Tinto's Gladstone operations.

 

"This agreement highlights the importance of large-scale renewable energy
projects in shoring up Queensland's powerhouse traditional industries,
particularly minerals and advanced processing, which employ thousands of
people in regional communities across the state and have a key role to play in
our nation's low-carbon future.

 

"Bungaban is a key transition opportunity that will create up to 600 new
Queensland construction jobs and inject around $500 million into the regional
economy through local employment, supply and contracting.

 

"The project can be responsibly developed, grid connected and producing enough
energy to power the equivalent of 740,000 Queensland homes by 2029, while
eliminating about 4 million tonnes of carbon from the state's generation
profile every year."

 

Rio Tinto will continue to engage with potential partners to assess other
proposals to help competitively meet the energy needs of its three production
assets in the Gladstone region. These assets require more than 1GW of reliable
power to operate, which equates to over 4GW of quality wind or solar power
with firming. Potential further electrification of plant processes could
increase their electricity demand in the future.

 

 

 

Contacts

Please direct all enquiries to media.enquiries@riotinto.com

 

 

 

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This announcement is authorised for release to the market by Andy Hodges, Rio
Tinto's Group Company Secretary.

 

 

 

 

 

 

riotinto.com

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