TransAlta Renewables has informed that Southern Cross Energy extended its current power purchase agreement (PPA) with BHP Billiton Nickel West in respect of SCE’s 245 MW of generation facilities in the Goldfields region of Western Australia.
The amendment to the PPA replaces the previous contract that was scheduled to expire December 31, 2023. The company owns an indirect economic interest in SCE.
“This is an exciting announcement for our Australian business and continues a strong relationship with our customer BHP Nickel West. Western Australia is an important market for us, where we have been operating for over 24 years.”John Kousinioris, president and CEO of TransAlta Renewables.
The PPA amendment extends the term to December 31, 2038 and provides SCE with the exclusive right to supply electrical energy to BHP’s mining operations located in the Goldfields region of Western Australia.
The amendment preserves SCE’s current economic benefit to 2023, while also providing SCE a return of and on new capital investments which will be required to support BHP’s future power requirements and recently announced emission reduction targets.
The PPA provides BHP with the ability to integrate renewable electricity generation, including solar and wind, with energy storage technologies, to meet its emissions reduction targets and deliver lower carbon, sustainable nickel to its customers.
The amended PPA also provides BHP participation rights in new capital investments, subject to the satisfaction of certain conditions.
The evaluation of renewable energy supply and carbon emissions reduction initiatives under the extended PPA with SCE are already under way, including an 18.5 MW solar photovoltaic farm at Nickel West’s Leinster and Mount Keith operations, supported by a battery energy storage system. A 17 MW waste heat steam turbine system at the Kalgoorlie Smelter is also being evaluated to provide low-emissions electricity from furnace heat recovery.