Rio Tinto has signed Australia's largest renewable power purchase agreement to date in a deal that will re-power a smelter and refineries in Queensland's industrial heartland.
The agreement announced on Wednesday makes the resources giant the biggest industrial buyer of renewable power in Australia, following an offtake deal last month for the Upper Calliope solar farm in Queensland.
The latest deal will take the majority of electricity from renewable energy developer Windlab's planned 1.4 gigawatt Bungaban wind energy project, which is expected to create up to 600 jobs during construction.
Already the state's biggest energy user in an electricity grid built around coal, Rio Tinto said it was "another major step" for the Boyne aluminium smelter, the Yarwun alumina refinery and the Queensland Alumina refinery.
"This agreement with Windlab builds on our momentum in our work to re-power our Gladstone operations and provide a sustainable future for heavy industry in Central Queensland," Rio Tinto chief executive Jakob Stausholm said.
Rio Tinto said it would buy 80 per cent of all power generated from the Bungaban wind energy project over 25 years, with the remainder to go into the national electricity market.
The combined 2.2GW of renewable agreements with Windlab and European Energy could generate the equivalent of 10 per cent of Queensland’s current power demand and lower carbon emissions by about five million tonnes per year.
Windlab CEO John Martin said the agreement highlighted the importance of large-scale renewable energy projects in shoring up Queensland’s traditional industries, particularly minerals and advanced processing.
"The project can be responsibly developed, grid connected and producing enough energy to power the equivalent of 740,000 Queensland homes by 2029, he said.
Rio Tinto said it would continue to engage with potential partners to assess other proposals to meet its energy needs in the Gladstone region.
The three Gladstone plants require more than one gigawatt of reliable power to operate, which equates to over 4GW of quality wind or solar power with firming.
Electrification of plant processes to cut emissions is expected to increase future clean energy demand.
