Renewables Big Business in the Pilbara

On Tuesday the Albanese government announced $3 billion to upgrade the electricity grid in Western Australia. The funding will arrive in the form of “concessional loans and equity investments to WA through the Clean Energy Finance Corporation,” according to the Prime Minister’s department.

“This significant package means we can accelerate the development of key energy transmission projects to facilitate decarbonisation,” said WA Premier Roger Cook. “I thank the Commonwealth Government for its confidence in WA and the way in which they have approached negotiations for a Rewiring the Nation allocation for WA.”

The investment is split between the state’s southwestern grid, centred on Perth, and its northwestern grid, centred on the Pilbara. Earlier this year, the Pilbara majors reached agreement to open their formerly private networks to one another and build an integrated grid. The participants include BHP, Rio Tinto, Woodside, BP, Fortescue, Alinta and Horizon.

The current Pilbara grid: read more at Renew Economy here.

Current expansion plans put the Pilbara on track to form the biggest isolated grid in the world. The Australian Renewable Energy Hub (AREH) currently plans to build out 26GW of solar and wind generation in the East Pilbara desert. Until now, the Pilbara region has been produced two-thirds of Western Australia’s carbon emissions.

The renewables expansion is intended to accommodate the needs of the iron ore miners and position for a tilt at green hydrogen production in future. To put it in perspective, the entire eastern Australian grid has a generation capacity of 54GW.

AREH has been 40% owned by BP since June 2022. The company is touting a potential USD $25.6 billion in hydrogen generated per year from renewable energy.

Meanwhile, the Perth-centred grid is also slated for massive upgrades. The Federal Department of Climate Change estimates the state will require five times its current grid capacity in 20 years’ time.

The money is finally flowing into building a clean energy future. The question is now, when most of the world is trying to do the very same thing, is there enough expertise and materials to get it done?

Feature image courtesy of @bencarless via Unsplash.

Sign Up To Our Free Newsletter To Receive Our Upcoming Report On A Low P/E Stock With An International Growth Runway