PERTH (miningweekly.com) – Iron-ore major and green energy developer Fortescue has struck a power purchase agreement (PPA) with ASX-listed Genex Power for 337.5 MW of new solar energy.

Under the PPA, Fortescue will secure the long-term energy and renewable generation certificates from Genex’s Bulli Creek solar project, in Queensland, for an agreed nominal fixed price over a 25-year term.

The company told shareholders on Monday that the PPA was intended to meet a portion of the renewable energy requirements for the proposed Gibson Island project in Brisbane, which involved the production of 385 000 t/y of green ammonia from the green hydrogen produced on site through a 550 MW hydrogen electrolysis facility.

The PPA is conditional on Genex achieving financial close on the first stage of the Bulli Creek solar project by the end of 2024, and Fortescue reaching a final investment decision (FID) on the Gibson Island project by the end of this year.

Fortescue Energy CEO Mark Hutchinson said the agreement would secure part of the renewable power required for the Gibson Island project as well as underpin the development of a new renewable energy project in Queensland.

“This agreement is the first step in securing renewable power supply for the Gibson Island Project over the long term,” Hutchinson said.

“It is the first PPA for the project and finalising it is an important milestone in our pursuit of a targeted FID this calendar year. By entering this agreement we’re also helping Genex and J-POWER to deliver their project and bring new renewable energy capacity online in Queensland - close to 115 MW from this first stage is surplus to our contracted share and will therefore flow back into the electricity grid.”

Genex CEO Craig Francis said on Monday that the PPA was a major milestone not only for the company’s own development portfolio, but also for the transition of Australian energy to renewables.

“Genex acquired the up to 2 GW Bulli Creek battery and solar project in August 2022, initially envisioning a standalone battery energy storage system as a first stage for the project.

“However, securing this long-term 25-year offtake agreement with Fortescue for 337.5 MW of solar capacity at Bulli Creek has reshaped the first stage of the project into a large-scale solar farm,” said Francis.

“Genex and J-POWER anticipate the agreement with Fortescue will underpin a solar farm capacity of 450 MW, with the long-term nature of the agreement highly attractive for prospective project financiers. Discussions are continuing with external parties for further offtake to support a solar farm capacity of up to 775 MW for this first stage of the project.

“This would position the Bulli Creek Solar Farm as the largest solar farm connected to the national electricity market.

“We are extremely pleased to be working with Fortescue and supporting their plans for a large-scale electrolysis plant at Gibson Island, which we anticipate will help pave the way for a significant and prosperous green hydrogen and ammonia industry in Australia.”