Arrium are a major Australian mining company, recently acquired by the British holding GFG Alliance. OneSteel are among their business divisions, operating a large steel working facility near Whyalla, South Australia. On Monday October 30, 2017, the GFG Alliance announced a project to power the Whyalla steelworks with a hybrid solar and energy storage system. This is yet another example of a heavy industrial energy consumer betting on commercial solar to take advantage of Australia’s abundant sunshine.
There is a clear trend towards renewable energy in the Australian industrial sector, and in particular solar power due to its decreasing cost and availability. GMA Garnet are investing in a similar hybrid system in West Australia, although of much smaller scale.
The hybrid energy system is composed of three main elements: a 200-MW solar photovoltaic array, a large-scale battery with 100 MW of rated power and 100 MWh of storage capacity, and a pumped-storage hydroelectric facility with a capacity of 120 MW and 600 MWh. In addition, 100 MW of demand response will be installed at the Arrium steelworks and other neighboring industrial sites to further improve power network stability.
The total project budget is $700 million, and will be delivered by Zen Energy, where the GFG Alliance has a 50.1% ownership stake. Currently, the OneSteel hybrid solar and storage system is the largest project of its type planned in Australia, and there are plans to expand total installed capacity to one gigawatt (1,000 MW). The next step will be to increase solar power capacity by 480 MW, which represents an increase of 240%.
Pumped storage hydroelectricity has been characterized by being demanding in terms of site conditions. However, this project will use a depleted mining pit to store pumped water, reducing its upfront cost dramatically. The total capacity of the battery system and PSH facility is 220 MW of dispatchable power and 700 MWh of storage, dwarfing the capacity of the utility-scale Tesla battery being deployed in South Australia – 100 MW and 129 MWh. The local power network will become much more stable and reliable, not only providing benefits for OneSteel but also their neighbors.
The OneSteel solar power and energy storage system is proof of the industrial potential offered by Australia’s renewable resources. Homes and businesses are seeking for alternatives to electricity from the power network, since Australia has some of the highest power bills in the world. Even though energy generation is cheap in Australia, network and retail costs are very high, accounting for more than half of the power bill paid.
GFG Alliance are following an interesting strategy that could prove useful elsewhere. The own OneSteel and most of Zen Energy, which means that they keep most of the profit from energy sales between both companies. Large Australian mining and manufacturing companies have the resources to develop their own renewable energy divisions, which accomplishes two main goals: reducing their energy costs while minimising their carbon footprint.