Pilbara Powers Up: Leading the Charge in Australia’s Green Energy Transition

Overview: Pilbara Energy Transition (PET) Plan

The Pilbara Industry Roundtable (the Pilbara Roundtable) which comprises key industry stakeholders and Government, is the driver behind the PET Plan’s implementation.⁵ The Pilbara Roundtable process commenced in August 2022, and was established to ‘discuss the unique opportunities and challenges for clean energy transformation in the Pilbara’.⁶  The Pilbara Roundtable was a catalyst for the PET Plan’s development, with its members coming to an agreement to implement CUI in the region after preparing future modelling and assessing the current framework.⁷

The PET Plan, led by Energy Policy WA (EPWA), will facilitate the development of the four CUI corridors which are intended to reduce environmental impact and enhance a strong, more interconnected electricity network.⁸ The PET Plan’s objectives include, accelerating decarbonisation through CUI, providing energy security through a diverse mix of renewables, driving private investment, and ensuring collaboration with Traditional Owners and local communities.⁹ It follows the recommendations made in the Climate Energy Finance’s 2024 Superpowering-Up report (CEF Report), which included developing a single CUI grid infrastructure plan in the Pilbara; working with the Pilbara Roundtable to identify CUI projects and unlock $3 billion of concessional finance from the Federal Government’s Rewiring the Nation (RTN) program; centring social licence and First Nations participation; and prioritising WA’s Pilbara region for strategic national-interest public investment.¹⁰

In the West Pilbara:

• The proposed Burrup (Murujuga) Corridor connects the Maitland Strategic Industrial Area (Maitland SIA), with Karratha and the Burrup Strategic Industrial Area (Burrup SIA). It seeks to reduce emissions from fertiliser and liquefied natural gas (LNG) plants in the Burrup SIA (including the Karratha Gas Plant and Pluto LNG Plant).¹¹
• The proposed Chichester Range Corridor connects the Maitland SIA with the high-quality wind zone proximate to the Chichester Range, seeking to make use of the strong wind conditions.¹²

In the East Pilbara:

• The proposed Hamersley Range Corridor connects the Boodarie Strategic Industrial Area (Boodarie SIA) and Port Hedland with the Hamersley Range. This corridor is likely to be the most significant, as the Hamersley Range boasts the WA’s highest mountains and is where the majority of WA’s iron ore mining is located. The link will be able to provide electricity to the iron ore and lithium mines in the region, with generation potential from high-quality wind sources located within the vicinity of the mining areas¹³
• The proposed Great Sandy Desert corridor connects the Boodarie SIA which is becoming an emerging hot spot for green iron, and Port Hedland with proposed renewable generation projects near the Great Sandy Desert.¹⁴

Image: Pilbara Energy Transition network modelling taken from DEMIRS Pilbara Energy Transition Request for Expressions of Interest for Priority Projects: Application Guidelines

Applying for Priority Project status

In mid-September, the WA Government launched an Expression of Interest (EOI) process, inviting project proponents to apply for Priority Project status for one or more of the four CUI corridors.¹⁵ Project proponents will only be awarded Priority Project status if they meet the eligibility criteria and the WA Government’s objectives prescribed under the assessment criteria, which require that the project: seeks to provide transmission infrastructure to service a priority corridor; is supported by the proponent’s organisation (and that support is evidenced); supports decarbonising the Pilbara; delivers or commits to deliver positive outcomes for Traditional Owners and the community; provides CUI; and ensures timely delivery and progress.¹⁶ Proponents who are awarded Project Priority status will then be invited to negotiate a Corridor Development Agreement with a State entity, and will receive a recommendation from WA Government to the Clean Energy Finance Corporation (CEFC), for the project to access finance from the RTN program.¹⁷

Investing in renewable energy infrastructure: Rewiring the Nation

Those who have been awarded Project Priority status under the PET Plan will be able to access and benefit from the Rewiring the Nation (RTN) program including, potentially accessing funds.¹⁸ In August 2023, the Federal and WA Governments signed the RTN agreement to strengthen the state’s energy security by expanding and modernising electricity grids, including the North West Pilbara.¹⁹ The effect of the agreement is that the CEFC, partnered with the Federal Government will act as a ‘green bank’,²⁰ providing $3 billion dollars through the RTN program by way of concessional loans (i.e. with below-market interest rates and sometimes grace periods) and equity investments.²¹ The RTN program intends to support new infrastructure and upgrades to WA’s electricity grids, including the Pilbara’s North West Interconnected System (NWIS).²² It is an additional initiative to the Pilbara Roundtable and subsequent PET Plan, which in conjunction, will aid economic development and accelerate decarbonisation in the Pilbara.²³

Social licence: Empowering First Nations people and local communities

The social licence to operate, has been, and will continue to be crucial for Australia’s decarbonisation, and the proposed priority projects under the PET Plan.²⁴ The Pilbara holds archaeological and cultural significance, and is where one of the world’s greatest and most diverse rock art works is located.²⁵ Relevant to the PET Plan, the Burrup SIA, located on the Murujuga peninsula, (which is part of the Burrup (Murujuga) Corridor), is a sacred place which exhibits thousands of ancient petroglyphs.²⁶ Currently, 33 Traditional Owner groups are impacted by the PET Plan.²⁷

The PET Plan signals Traditional Owner and local community participation as a priority. It does so through its objective to support Traditional Owners, their members, and communities to participate in the energy transition, to ensure meaningful and lasting benefits from the energy transition.²⁸ Proponents can also only receive Project Priority status if they can demonstrate such commitment. It is therefore crucial that proponents ensure they design projects with minimal disturbance to Country and continue to engage with Traditional Owners directly impacted by their project (including in the design and development, during and after the project), to establish meaningful and shared benefits.²⁹ These commitments follow from the Pilbara Roundtable’s agreement that all ‘electricity infrastructure development should support rights to self-determination and empower Aboriginal people to realise opportunities from the clean energy transformation’.³⁰ The WA Government has already been consulting with Traditional Owners regarding the Burrup (Murujuga) Corridor, following concerns that the capacity of the line would lead to future duplication, and is addressing these concerns by seeking to increase the capacity of the project in collaboration with Traditional Owners and industry.³¹

Demand for renewables will bolster employment security

Employment security is at the top of the minds of policy makers, and projects such as those under the PET Plan are expected to unlock new business and job opportunities in the Pilbara. The PET Plan aims to create new local job opportunities on the Burrup Peninsula, while simultaneously meeting the demand for renewable and reliable energy, and boosting economic growth.³² Relatedly, the RTN program is also expected to create new jobs in energy, mining and manufacturing industries, support approximately 1,800 construction jobs, and lead to the development of further projects in WA.³³ Ensuring that people in the mining industry will continue to have job security during the energy transition and decarbonisation of the Pilbara is essential to sustaining economic growth, and empowering regional communities.

Australia’s biggest export opportunity: Positioning Australia as a green export superpower

The Pilbara is the world’s biggest iron ore mining region, and a leading global producer and exporter of iron ore, which is Australia’s top export commodity by both in volume and earnings.³⁴

According to the CEF Report, a single CUI in the Pilbara is the key to accelerating decarbonisation and unlocking more than $50-100 billion worth of new investment in ‘renewable energy generation and firming, grid transmission and value-added refining of critical minerals, strategic metals and energy transition materials’.³⁵ Iron ore represents approximately 55% of metal and mineral exports.³⁶ Between 2022-23, Australia earned $124 billion in revenue from 895 million tonnes worth of iron ore exports. With the new opportunities emerging from the PET Plan, Australia can redefine itself as a green exports superpower, with the potential to double its iron ore exports to $250 billion per annum by producing green iron.³⁷

The CEF Report sees this opportunity as once in a century. Australia’s largest resource trading partner, China, is the world’s largest iron ore importer. Over the past 3 decades, Australia has exported over 13.9 billion tonnes of iron ore, making more than $1.35 trillion in export revenue.³⁸ China is yet to lead on the green iron front, presenting an opportunity for Australia to act on this potential. This potential can only be realised if Australia acts quickly to decarbonise its mining industry, while prioritising key trade partnerships, to avoid missing out on pivotal export opportunities.³⁹

Next steps

For many decades, the Pilbara region has driven WA’s economic prosperity using traditional energy sources. However, as the Smart Energy Council points out, we can no longer continue down the ‘dwindling fossil fuel pathway’. The PET Plan is the path forward for WA to fulfill its potential as a ‘renewable and critical minerals superpower’ and bolster its economic growth.⁴⁰ Stakeholders in the industry should act quickly to seize important investment and green export opportunities under the PET Plan.