World’s largest microgrid for renewable energy shut down

Mining giant BHP’s plans to supply a new economic region with clean energy have been shelved, but one outback town will remain without lights.

A recent decision to cease nickel exploration, mining and refining will result in the relocation or dismissal of over 3,000 workers and have knock-on effects for hundreds of small businesses.

It also covers what it calls the “groundbreaking” decarbonisation and electrification of major industrial facilities, as well as plans to develop a new resource-rich region 500 kilometres west of Uluru.

In response to a global nickel oversupply and stubbornly low nickel prices, BHP will cease operations at Nickel West and development of a massive West Musgrave project in central Australia.

Mining and processing operations at the Kwinana nickel refinery, Kalgoorlie nickel smelter and Mt Keith and Leinster operations in Western Australia, as well as development of the West Musgrave project, will be on hold from October until at least 2027.

So what happens to the Northern Goldfields solar and battery storage project, touted as a groundbreaking renewable energy facility to replace diesel and gas power?

Commissioning is scheduled for 2023 and is seen as a major step towards BHP’s goal of decarbonising operations by 30 percent by 2030.

These included a 27.4 MW solar farm at Mount Keith and a 10.7 MW solar farm and 10.1 MW battery in Leinster, which were integrated into TransAlta’s Northern Goldfields electricity grid.

“Projects like this set a global standard for what a modern mine looks like, with a strong focus on the environment and reducing carbon emissions,” said then Western Australia Mining Minister Bill Johnston.

Apparently, BHP Nickel West’s electricity needs in the Northern Goldfields region will fall and coal will no longer be needed to supply the nickel refinery near the outback mining town of Kalgoorlie-Boulder.

“However, there will continue to be electricity demand for the operation and the city during the temporary suspension,” said a BHP spokesman.

“Transalta will continue to operate the power plants while also maximizing the output of the northern solar project to keep emissions as low as possible.”

BHP still makes a good profit from iron ore and has invested $4.4 billion in its loss-making Australian nickel business since 2020 in anticipation of producing for the battery and electric vehicle markets.

This included Australia’s first nickel sulphate plant, the construction of two new mines and the development of two solar farms and battery storage facilities.

BHP’s acquisition of copper-nickel developer OZ Minerals in 2023 is also linked to plans for the world’s largest microgrid for renewable energy. The grid is to be built in a remote location at the intersection of Western Australia, South Australia and the Northern Territory.

On Ngaanyatjarra Aboriginal land, approximately 1,300 km northeast of Perth and 1,400 km northwest of Adelaide, the nearest towns include the Indigenous communities of Jameson (Mantamaru), Blackstone (Papulankutja) and Warburton (Milyirrtjarra).

Infrastructure giants worked on concepts for an off-grid system to supply a 20,852-hectare development with the potential to transform one of the world’s most energy-intensive industries and create a new economic zone.

A microgrid of solar and wind energy, supported by a battery energy storage system and a diesel backup power supply, should enable “carbon-free mining” by 2038.

There were plans to start production in a year or two as shortages in the nickel market were expected due to demand for battery metals.

“No other metals will be used as intensively as the world moves to cleaner energy and electrification, electric vehicles, wind farms and solar panels,” said Andrew Cole, CEO of OZ Minerals, two years ago.

With two large open pit mines and a processing plant, engineers developed the latest technologies to reduce energy demand. But a Chinese-funded oversupply of cheaper Indonesian nickel thwarted these plans.

“The West Musgrave hybrid renewable energy plant will be decommissioned as part of the temporary closure of the West Musgrave mine,” the BHP spokesman said.

The mine was expected to produce 35,000 tonnes of nickel and 41,000 tonnes of copper annually in the first five years.

A spokeswoman for Energy Minister Chris Bowen said the “Future Made in Australia” measures announced in the last budget will transform the economy and create jobs in new industries such as renewable hydrogen production and solar energy.

The proposed legislation also supports the mining of critical minerals needed for batteries, transportation and communications.

While the federal government’s $20 billion “Rewiring the Nation” program is tasked with connecting communities outside the national electricity market, decisions about electricity transmission are largely left to the states and territories.

However, there is no Musgrave Transfer proposal to support the extraction and processing of the nickel and copper deposits.