Long-term power supply from Fortescue's Green Grid

Overview

Building on the first stage of the 2023 Pilgangoora Power Strategy, Iluminex identified Fortescue’s nearby Green Grid as an innovative opportunity with the potential to outperform other power supply options for the Pilgangoora Project and support the P2000 expansion. Iluminex presented the concept to PLS and opened discussions with Fortescue.

From there, Iluminex partnered with PLS to develop the commercial solution and led the process through to execution of a 20-year power purchase agreement, under which PLS becomes Fortescue’s first external Green Grid customer, delivering long-term, lower cost and lower emissions power to Pilgangoora.

Scope

• Identified and validated the credibility of the opportunity to source long-term power from Fortescue's Pilbara network and initiated discussions between PLS and Fortescue.
• Built the commercial case for a third party supply arrangement, modelling the options and value against alternative supply and technology pathways.
• Developed the contracting framework and commercial risk allocation for a non-firm supply arrangement supported by retained on-site generation.
• Supported commercial negotiations on behalf of PLS and guided the PLS team through to approval and execution.

Outcome

• 20-year power purchase agreement with Fortescue to supply a minimum of 325 GWh per annum from 2029, supporting the P2000 expansion.
• Expected reduction in FOB unit operating costs of approximately AUD 15 to 20 per tonne once supply commences.
• Expected reduction in power-related emissions of approximately 80% against the FY23 baseline, delivering on the 2023 Power Strategy developed by Iluminex.
• Non-firm supply with on-site generation retained, preserving security of supply and flexibility as the operation grows.

"Iluminex played a key role in shaping our power strategy and navigating the complexity of this unique arrangement with Fortescue. James and the team worked closely with us throughout, from identifying the opportunity and initiating discussions through to negotiation and execution, helping secure a long-term power solution that delivers lower costs and emissions for Pilgangoora. Iluminex's industry knowledge and expertise was invaluable in securing the PPA with Fortescue." - Paul Laybourne, Project Director, PLS

ASX announcement

Long Term PPA to Reduce Costs & Emissions