Challenges and opportunities for decarbonising the Pilbara

 

Decarbonising the energy intensive and typically remote operations of Australia’s leading mining and resources companies will be a major undertaking.

These organisations not only account for a significant proportion of Australia’s exports, but for around 15 per cent of our country’s total energy consumption, most of which is derived from fossil fuels.

If we are to reach net zero by 2050, it is essential that we have a plan for decarbonisation across the resources sector.

Some of the largest miners across the country have committed to cutting their operational emissions by 30 per cent, 50 per cent and some even to real zero by 2030.

The huge investment and substantial new infrastructure required to achieve these emissions ambitions presents a significant opportunity.

The investment required to decarbonise Western Australia’s minerals rich Pilbara region alone is estimated to be about $15 billion.

Much of this will be achieved by decarbonising heavy haul trucks, machinery and locomotives through the displacement of diesel. In fact, about two thirds of the 2050 forecast for electricity demand in the Pilbara primarily results from the transition away from diesel fuel. 

But turning these opportunities into reality won’t be without its challenges. Alongside the need to introduce more renewable energy, there are two key challenges to address.

Large-scale energy storage

The first challenge is energy storage. Mining operations require an uninterruptible energy supply 24 hours a day.

Solar and wind could economically provide about 70-80 per cent of the region’s energy needs, but there will be periods of 'renewable drought’ when the sun isn’t shining and the wind isn’t blowing.

For the remaining 20-30 per cent, long duration energy storage solutions, such as pumped hydro or compressed air storage, are not currently cost-effective options for the Pilbara.

And although batteries will play an important role in stabilising renewables and short-term duration storage, they can’t provide the long duration storage required when there are hours, days and even weeks of cloud cover and/or low wind.

Over the past 11 years, there has been an average of 101 renewable droughts per year in the Pilbara – where there was less than 10 per cent variable renewable energy for more than eight hours.

This means gas powered generation, with a combination of gas storage and transmission, will need to continue to firm and underpin the region’s energy reliability.

Approval and delivery times

The second challenge is the time taken to secure project tenure and approvals.

Businesses stand ready to roll up their sleeves to solve some of the complex issues facing the energy industry, but we need governments to help reduce red tape and provide a stable and sensible regulatory environment to ensure developers have confidence to invest.

Strong engagement with community and traditional owners, and strong environmental protections, are critical if we are to maintain trust and social licence.

But we also need to move quickly if we are to meet emissions objectives and support ongoing growth.

The Pilbara contributes more than a third of our nation’s exports, producing $77.8 billion in gross regional product and directly employing nearly 60,000 people.

Encouragingly, while announcing import tariff reforms last month, Treasurer Jim Chalmers indicated that the Federal Government was looking at ways to streamline a range of approvals and regulatory processes for new gas and mining projects.

APA remote energy solutions

APA sees an opportunity to do in the Pilbara what we have successfully done in other remote locations across the country, including in Mount Isa in Queensland and Gruyere in Western Australia.  

Our focus is providing reliable and affordable energy solutions that help our customers meet their decarbonisation objectives. We aim to deliver this through bundled energy solutions – that is, renewables supported by batteries and gas-powered generation.

For example, at Port Hedland we are currently constructing a large battery and solar project, with these new assets to provide reliable and affordable energy to a key mining customer, while reducing their emissions from electricity generation by around 50 per cent.

This project is one part of our business in the Pilbara which includes a range of strategically located assets and development sites, including solar, gas powered generation, battery storage, and electricity and gas transmission infrastructure.

The business has long-term contracts with major resources customers, a team with a track record of strong customer-delivery and a potential >$3 billion pipeline of growth projects over the longer term.

We will continue to work to address challenges to the delivery of new projects as we support our customers to decarbonise and position to be the leading independent energy solutions provider in the Pilbara and Western Australia.