APA
Decarbonisation
Energy transition
Gas
2 min read
Decarbonising Australia’s resources sector
Written by
Adam Watson (2024)
Adam Watson
Published on
28 August 2023
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231000 Transmission Visual Elements Transmission Decarbonising Sector Heading

Australia faces an enormous decarbonisation challenge ahead.

We know that the fastest way for our economy to decarbonise is through the accelerated ramp-up of renewable power and the continued exit of coal generation.

A substantial amount of renewable generation must be developed, and associated firming capacity, through gas, batteries, or other technologies, will need to be integrated to keep the lights on when the sun goes down and the wind doesn’t blow.

Gas is going to continue to have a critical role to play in supporting this transition by firming renewables, powering manufacturing, and powering remote grids.

APA is proudly Australian and listed on the ASX. We have a clear strategy to be the partner of choice in delivering infrastructure solutions for the energy transition. As part of this, we are focussed on supporting the decarbonisation of the resources sector through the delivery of bundled energy solutions.

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Dugald River Solar Farm, QLD

Remote grid generation

The work we’ve done in Mount Isa is a great example of this. Connecting our 88-megawatt Dugald River solar farm – the largest off-grid solar farm in Australia – with electricity transmission and gas-fired power generators will support the delivery of reliable and lower emissions energy to our customers in this region.

We have built on this existing capability with the recent acquisition of Alinta Energy Pilbara – a business underpinned by high-quality solar, battery, gas, and electricity transmission assets that will allow us to serve resources customers in Western Australia. Acquiring this business will establish a market-leading position for APA – as an independent, Australian energy solutions provider in Australia’s leading mining geographies.

The Pilbara is the world’s premier iron ore export region. And we know the sector can’t prosper without reliable, affordable, and low emissions energy. Some of the region’s largest miners will need to cut their operational emissions by 30 percent, 50 percent, and even to net zero by 2030.

This will drive renewable electricity demand and require continued investment in bundled energy solutions, which APA will deliver through existing infrastructure and a growth pipeline of new projects.

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Construction of the Northern Goldfields Interconnect, WA

Role of gas in the transition

While we expect batteries and other technologies to play an important firming role in helping keep the remote grid stable in the Pilbara, we still see gas as underpinning the region’s reliability.

That’s because it’s capable of being turned on in minutes and able to be sustained for days, which is critical for a region that supports mines operating 24-7.

We estimate the total investment in electricity generation infrastructure required to decarbonise the Pilbara to be about $15 billion. Our acquisition in Alinta Energy Pilbara alone provides a potential $3 billion pipeline of projects over the longer term.

The acquisition of Alinta Energy Pilbara delivers a new growth platform in the remote-grid energy sector – one that APA knows well and has already demonstrated success in – that will support the decarbonisation of resources customers across the region.