BHP has signed a firm renewable power purchasing agreement to meet half of its electricity needs across its Queensland Coal mines from low emissions sources, including solar and wind. The agreement will help BHP reduce emissions from electricity use in its Queensland operations by 50 per cent by 2025, based on FY2020 levels.
The agreement, with Queensland's state-owned clean energy generator and retailer CleanCo, will run for five years from 1 January 2021. This will effectively displace an estimated 1.7 million tonnes of CO2e between 2021 and 2025 – equivalent to the annual emissions of around 400,000 combustion engine cars.
The agreement is the first of its kind signed by BHP in Australia and follows the company's shift to 100 per cent renewables in its Chilean operations at Escondida and Spence from the mid-2020s. It will also support the development of new solar and wind farms in Queensland – the Western Downs Green Power Hub due for completion in late 2022, and Karara Wind Farm due for completion in early 2023.
BHP's President Minerals Australia, Edgar Basto said: "This is an important step forward in BHP's transition to more sustainable energy use across our portfolio, and a first for our Australian operations. It will diversify our energy supply, help to reduce our energy costs, and reduce BHP's Australian Scope 2 emissions by 20 per cent from FY2020 levels."
"This is a prime example of prudent business decisions going hand-in-hand with social value, strengthening our business and benefitting the community."
BHP Mitsubishi Alliance (BMA), Asset President, James Palmer said: "This contract will help our operations across Queensland to further increase their sustainability through reducing the greenhouse gas emissions we generate from electricity use by half. It will also support two greenfield renewable projects that in turn are expected to generate regional jobs in Queensland."
Over the five-year agreement, power will be provided via the grid, and predominantly contracted from a combination of solar, wind, hydro and gas generation.
For the first two years, power will be contracted from CleanCo's low emissions portfolio which includes hydro and gas generation assets. From late 2022, the newly operational solar and wind farms are expected to progressively contribute up to half the electricity requirements, with the remainder supported by CleanCo's low emissions portfolio. Combined with large-scale generation certificates, this will enable BHP to reduce Scope 2 emissions from its Queensland operations by 50 per cent by 2025, based on FY2020 levels.
The contract will contribute to BHP's medium-term, science-based target for the reduction of Scope 1 and Scope 2 operational greenhouse gas emissions – due to be announced shortly.
About CleanCo
CleanCo was created with Queensland's most flexible and responsive generation assets to help improve electricity affordability and support the transition to clean energy in a way that drives regional growth and jobs.
CleanCo has a target to support 1,000MW of new renewable energy generation by 2025. It aims to achieve this by building, owning and operating renewable energy projects and supporting investment in other new renewable energy projects, which can be firmed by our low-emission dispatchable generation assets. CleanCo will use this capability to supply reliable clean energy products tailored to large commercial and industrial customers at competitive prices.
Additional comments
CleanCo CEO, Dr Maia Schweizer:
"We're committed to improving affordability and creating regional growth and jobs for Queenslanders and achieving our target to support 1,000 MW of new renewable generation by 2025, which will help Queensland achieve its goal of 50 per cent renewables by 2030."
Queensland Resources Council's Chief Executive Ian Macfarlane:
"BHP's announcement is a great example of how Queensland's resources industry is working hard to make a smooth transition to a low carbon economy and is another sign of our commitment to embracing new technologies which lower emissions and deliver reliable energy."
