European Energy signs major green PPA with Rio Tinto

European Energy has signed a major green power purchase agreement (PPA) with Rio Tinto. It is one of the largest renewable energy PPAs signed in Australia.

European Energy will supply all the electricity generated by its Upper Calliope Solar Farm in Queensland to Rio Tinto for 25 years. The energy will help power Rio Tinto’s operations in Gladstone.

The Danish renewables giant will develop, build and operate the 1.3GWp (1.1GWac) solar farm, subject to development and grid connection approvals. Construction is expected to begin in 2025–26. Once operating, the solar farm has the potential to lower Rio Tinto’s operating carbon emissions by 1.8 million tonnes a year.

‘The Upper Calliope Solar Farm is a landmark project for European Energy,’ says Knud Erik Andersen, European Energy’s CEO. ‘With a capacity that makes it the largest solar farm we’ve ever developed, it highlights the transformative potential of solar power in regions like Queensland.’

The solar farm is expected to contribute 5% of Queensland’s electricity. Rio Tinto’s Gladstone operations will support over 1,000 existing jobs in the region. The project will create up to 1,000 new direct and indirect jobs during construction, and 100 jobs during operation.

European Energy has also started constructing a 56 MW solar farm in Hume, regional Victoria. It is the company’s first operating project in Australia. When complete, the solar farm will provide renewable energy to over 15,000 households.

Sourcing green energy from Australian projects

Rio Tinto has also signed a green PPA with Australian renewable energy company Windlab. The company will buy 80% of the electricity from Windlab’s planned 1.4GW Bungaban wind energy project for 25 years.

Once approved, the project will start construction in late 2025. It is expected to employ up to 600 people during construction and support up to 30 jobs when operating.

The two PPAs support Rio Tinto’s goal of halving its global Scope 1 & 2 carbon emissions this decade. They could also provide the core of a solution to repower the company’s three Gladstone production assets.

Rio Tinto will continue to engage with potential partners to assess other proposals to help meet the energy needs of its three production assets in the Gladstone region. These assets require more than 1GW of reliable power to operate, which equates to over 4GW of quality wind or solar power.

Green PPAs across Australia

Australia’s large pipeline of renewable energy projects makes it a prime location for renewable energy PPAs. Rio Tinto is one of several companies that have signed PPAs to purchase green energy from Australian renewables projects. Others include:

Microsoft will source 300 MW from the Walla Walla Solar Farm. Anglo-American will source 234 MW from the Clarke Creek wind farm and Blue Grass Solar Farm.

BHP will source 203 MW from Neoen’s Goyder South wind farm.

Equinix will source 155 MW from Portugal’s TagEnergy to power its 17 data centres across Australia. State-owned energy retailer CleanCo will source 126 MW from UK energy firm Octopus’ wind farm in Queensland. Telstra will source 111 MW from the Macintyre Wind Farm. State-owned energy company Stanwell will source energy from Acciona’s 380 MW solar farm (under development in Queensland). Electricity retailer SmartestEnergy will source energy from Enel Green Power’s 93 MW solar project (under development in Victoria).

Australian advisory firms with expertise in energy procurement can help investors structure and negotiate PPAs.