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PLS has secured a minimum of 325 gigawatt-hours per annum of electricity for its Pilgangoora operation in Western Australia, supporting the project’s forecast power demand under the P2000 operating model.
This comes after PLS subsidiary Pilgangoora Operation executed a 20-year power purchase agreement (PPA) with Fortescue subsidiary FMG Clean Energy.
According to PLS, this PPA underpins its Pilgangoora power strategy in delivering a materially lower cost of power, enhanced long-term energy security, capacity for future growth and a substantially higher share of renewable energy in the site’s power mix.
“We are pleased to partner with Fortescue and become their first external Green Grid customer,” PLS managing director and chief executive officer (CEO) Dale Henderson said.
“We commend Fortescue’s leadership in bringing its vision for large-scale, lower-emissions power infrastructure across the Pilbara to life, and strongly support the opportunity for shared infrastructure to benefit industry across the region.”
Under the agreement, PLS expects to reduce its forecast unit operating costs by approximately $15–20 per tonne compared with the recently approved P2000 expansion’s 10-year average operating cost estimates.
The company said it will invest approximately $150 million in transmission connections and power infrastructure between the 2026–27 and 2028–29 financial years, with electricity supply targeted to commence in 2029.
The project will connect Pilgangoora to Fortescue’s Turner River solar farm through approximately 25km of new 220-kilovolt transmission infrastructure, with PLS funding and owning around 20km of the connection.
The network will have capacity exceeding 100 megawatts, accommodating potential future developments such as underground mining and fleet electrification.
“This agreement further strengthens our low-cost position at Pilgangoora, improving our competitiveness and resilience through lithium market cycles,” Henderson said.
“Access to lower-cost, lower-emissions power will deliver further improvements to the economics of our recently approved P2000 Project expansion, beyond those announced at FID, while providing capacity to support future growth.”
Fortescue chief executive officer Dino Otranto said the agreement represented an important step in expanding the company’s role as a regional energy supplier.
“We started building the Green Grid for our own operations, but we could see strong demand for cheap, green, reliable power across the Pilbara and an opportunity to supply other customers too,” Otranto said.
“This agreement is an important first step and cements our role as an energy supplier. It will help power PLS’ expansion, support economic growth in the region, and create a new, long-term revenue stream for Fortescue.”
PLS expects the new power arrangement to reduce Pilgangoora’s power-related emissions intensity by up to 80 per cent from its 2022–23 baseline by 2030.
The agreement remains subject to conditions, including construction arrangements and regulatory approvals, while PLS will retain and expand on-site generation to manage potential supply interruptions.
“PLS is our first customer, with a strong pipeline of others across the Pilbara looking to our Green Grid for greater choice and flexibility in how they source their power,” Otranto said.
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