Fortescue strikes 25-year power deal
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Fortescue Metals Group has signed a deal to buy 337.5 megawatts of solar energy from listed company Genex Power to power a proposed green hydrogen and ammonia project in Brisbane.
The pair told the ASX on Monday morning that they had entered a renewable power purchase agreement that hinged on reaching key milestones for their respestive projects.
Genex is currently working to develop the Bulli Creek Solar Project in Queensland - which it acquired in 2022 - in a partnership with Electric Power Development Co.
The pair are targeting a final investment decision by the end of 2024.
The 25-year, fixed price power purchase agreement is the first signed by Fortescue for its proposed Gibson Island project, which is slated to produce approximately 385,000 tonnes of green ammonia a year from the green hydrogen produced onsite through a 550MW hydrogen electrolysis facility once operational.
Genex's project is expected to generate 450 megwatts, with 337.5MW secured by Fortescue under the agreement announced today.
The arrangement is conditional on Genex achieving financial close on the Bulli Creek project by the end of 2024 and Fortescue making a final investment decision on its proposed green energy project by the end of this year.
It's a strong signal Gibson Island is likely to be one of the five projects Fortescue makes before the end of this year.
Fortescue Energy chief executive Mark Hutchinson said the agreement would secure part of the renewable power needed for Gibson Island.
“This agreement is the first step in securing renewable power supply for the Gibson Island Project over the long term,” Mr Hutchinson said.
“It is the first PPA for the project and finalising it is an important milestone in our pursuit of a targeted final investment decision 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 115MW from this first stage is surplus to our contracted share and will therefore flow back into the electricity grid.”