Mining giant BHP Group Plc (LON:BHP) has agreed to buy power from low-emission sources, including wind and solar, to meet 50% of the electricity needs for its coal mining operations in Queensland, Australia.
The multinational said on Wednesday it has signed a five-year power purchase agreement (PPA) with CleanCo, the publicly-owned clean energy generator and retailer of Queensland, running from January 1, 2021. Electricity under it will be mostly provided via the grid and mostly come from a combination of solar, wind, hydro and gas generation.
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During the first two years, power will flow from CleanCo’s low emissions portfolio, while from late 2022 new wind and solar plants will be added. The electricity will be sourced from Neoen’s Western Downs Green Power Hub, a 400-MW solar park due to be switched on in late 2022, and Acciona’s 1-GW Karara wind farm, also known as the MacIntyre project, which will be brought online in early 2023.
The off-take contract will help BHP offset around 1.7 million tonnes of carbon dioxide (CO2) emissions between 2021 and 2025 and thus cut by 50% the emissions from electricity use for its Queensland operations by 2025, as compared to 2020 levels.
This is the first big renewable energy off-take deal for BHP in Australia. The mining company already agreed to shift to 100% renewables for its Chilean mining operations at Escondida and Spence from the mid-2020s.