The federal government’s green bank has warned Pilbara industry heavyweights against a go-it-alone approach to transmission infrastructure, citing $30 billion in savings from shared assets.
The federal government’s green bank has warned Pilbara industry heavyweights against a go-it-alone approach to transmission infrastructure, citing $30 billion in savings from shared assets.
The Clean Energy Finance Corporation has warned that without coordinated planning, new Pilbara transmission infrastructure risked repeating costly mistakes, pointing to the duplication of rail lines across the region built by the major iron ore miners.
In the report prepared by Marsden Jacob Associates, CEFC outlined an economic case for a coordinated approach to common-user transmission infrastructure in the pursuit of decarbonising the emissions-heavy region, as net zero targets loom.
The CEFC-commissioned report detailed $30 billion in cost savings could be realised compared to an individual approach, including $4 billion in curbed transmission costs and $26 billion in avoided generation and storage costs over 25 years.
It also highlighted a 21 per cent cut to the land footprint, a 29 per cent cut to new transmission line length, and a 16 per cent reduction in required renewable energy and storage capacity assets were required under a common-user approach.
It put an estimated $126 billion price tag on the capital investment required under the common-user case, compared to $157 billion in a fragmented approach, both over 25 years.
CEFC WA and Resources executive director Rob Wilson said there was an opportunity to build it once and build it right.
“The economic case is overwhelming. And the coordination required is both achievable and essential,” he said.
The report said the Pilbara energy system was at an inflection point and questioned whether a self-sufficient approach could deliver a decarbonised energy system in a timely manner.
There are several renewable energy ambitions afoot in the region.
APA Group and Yindjibarndi Energy Corporation were granted priority project status by the state government to build transmission corridors linking renewable energy hubs to industrial estates and power stations.
Fortescue is aiming to curb greenhouse gas emissions by 2030; the most ambitious target of the iron ore miners compared to Rio Tinto and BHP’s staged targets to 2050.
Mr Wilson added that the cost of delay was enormous.
“It takes years and many millions of dollars in early investment to identify corridors, conduct engineering, and secure approvals,” he said.
“Without increased commitment from stakeholders now, the region risks defaulting to expensive and inefficient solutions.”
The report said a common-user approach would be a key facilitator of renewable electricity transition for both large and small energy users looking to cut costs and emissions.
It also noted that availability of low-cost renewable energy would drive new green industries, such as green iron manufacturing.
It also outlined advantages for streamlined approvals under a coordinated approach between government agencies, industry and traditional owners.
Mr Wilson added there were significant benefits for the major Pilbara miners of working together, rather than individually funding inefficient subscale systems.
“In addition, mid-tier miners, Pilbara industry, and future green industry would benefit from being able to access a grid,” he said.
“Everyone can win under this coordinated approach, but it requires urgent cooperation, coordination and leadership.”
The report highlighted that the Pilbara industry accounted for about 23 per cent of the national safeguard facility total greenhouse gas emissions, or 40 per cent for WA.
It comes two years after the federal government set aside $3 billion for the CEFC, with the investment intended to leverage private investment to meet transmission and infrastructure needs to underpin decarbonisation in the Pilbara, the report read.
