Fortescue Metals (ASX:FMG)
and Sydney-based renewable energy supplier Genex have entered into a 25-year solar power purchase agreement (PPA). The PPA is for the Bulli Creek solar and battery project (BCP) in Queensland, offering an offtake for up to 337.5 megawatts of solar energy.
The announcements on Monday from both companies didn’t include any price details, but they are conditional on a couple of hurdles. Monday’s statement says it is contingent on Genex achieving financial close on the Bulli Creek project by December 31, 2024, and FMG making a Final Investment Decision (FID) on Gibson by the end of this year.
“Today’s announcement marks a major milestone, not only for Genex’s 2.25 gigawatt development portfolio but also for the Australian energy transition to renewables,” Genex CEO Craig Francis said in its statement.
The BCP is being developed by Genex in partnership with Electric Power Development (J-Power), with Solar Choice as a co-developer. The PPA with Fortescue enables Genex and J-POWER to commit to the first solar stage development at the BCP at a minimum capacity of 450 megawatts, with the PPA providing a 75% contracted revenue stream.
Fortescue intends to utilize the solar energy procured under the PPA for the operation of a green hydrogen and green ammonia facility in connection with its Gibson Island project in Brisbane. Genex said on Monday that discussions for further solar offtake are ongoing with other parties to increase initial capacity to up to 775 megawatts and become the largest grid-connected solar farm in Australia.
“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,” Francis said.
Last week, Fortescue announced it has picked up the lead investor role in Electric Hydrogen’s (EH2) US$380 million ($A603.4 million) series C funding round. EH2’s complete 100-megawatt electrolyser systems produce green hydrogen from renewable electricity and water at a large scale.