Fortescue Metals has secured a solar energy deal to power its Gibson Island green hydrogen and ammonia project in Brisbane, Queensland.
The iron ore giant announced a power purchase agreement (PPA) between one of its subsidiaries and Genex Power for 337.5 megawatts (MW) of new solar energy.
Under the PPA, Fortescue will secure the solar energy and renewable generation certificates at an agreed nominal fixed price over a 25-year term. The agreement is dependent upon Fortescue reaching a final investment decision on Gibson Island by the end of the year.
The Gibson Island project seeks to produce roughly 385,000 tonnes of green ammonia a year from the green hydrogen produced onsite using a 550MW hydrogen electrolysis facility. In other words, Fortescue wants to use renewable energy to create green hydrogen, and then convert that hydrogen into green ammonia. If successfully achieved, this would mark a world first.
Gibson Island is one step on the path of Fortescue’s green energy journey. The major miner has set a target to spend $US6.2 billion ($9.16 billion) to eliminate the use of fossil fuels and hit its 2030 net-zero target, where it initially hopes to achieve carbon neutrality for Scope 1 and 2 emissions by the end of the decade.
This is a significant capital outlay, but Fortescue believes it will lead to a handsome return on investment.
Fortescue executive chair Andrew Forrest said he deployment of green energy will not only save the company in reduced energy costs as the price of fossil fuel goes up, but will also enable it to steer clear of carbon taxes.