A recent report from Climate Energy Finance (CEF) underscores the critical need for Australia to accelerate the electrification and decarbonisation of its Pilbara region to leverage the rapidly growing global demand for green iron.
Entitled “Superpowering-Up,” the report warns that inaction could endanger Australia’s ambition to significantly increase its iron exports to $250 billion annually by shifting to green iron production.
Current Energy Reliance and Future Needs
The Pilbara, renowned as Australia’s resource powerhouse and the world’s leading iron ore exporter, currently depends heavily on fossil fuels.
The region consumes 2.4 billion litres of diesel every year. The report suggests that transitioning to renewable energy would necessitate approximately 16.66 terawatt hours of electricity annually, which is about 7.8% of Australia’s National Electricity Market.
Presently, renewable sources account for only 2% of the Pilbara’s electricity supply.
Recommendations for Green Infrastructure
To address these challenges, the report advocates for the establishment of a common-user electricity grid infrastructure (CUI) in the Pilbara.
This infrastructure is considered essential for decarbonising the region and unlocking $50-100 billion in new investments in renewable energy, battery storage, and transmission infrastructure.
Such developments would enable the processing and value addition of the Pilbara’s extensive reserves of critical minerals and strategic metals using zero-emissions power.
Key Recommendations and Strategic Measures
The report outlines several key recommendations to support the green transformation:
- Prioritising First Nations Equity: Emphasising the importance of including First Nations communities in energy projects to ensure equitable participation.
- Expediting Environmental Approvals: Introducing “Overriding Public Interest” principles to streamline environmental approvals and accelerate project timelines.
- Leveraging Federal Legislation: Utilizing the federal government’s Future Made in Australia Act to attract private investment and foster growth in the green energy sector.
The WA and federal governments are encouraged to utilize the $3 billion Clean Energy Finance Corporation concessional financing to support the Pilbara’s transition.
Expert Insights on the Transition
Tim Buckley, Director of CEF, highlighted the Pilbara’s strategic significance in the global effort to decarbonise, noting that Western Australia has the potential to become a leader in the green steel supply chain.
Matt Pollard, Net Zero Transformation Analyst at CEF, acknowledged the challenges of developing large-scale infrastructure in the region but stressed the importance of collaborative efforts between government and industry to accelerate the transition.
Former Chief Scientist Dr Alan Finkel emphasized the need for regulatory reforms to facilitate quicker deployment of renewable energy projects. Meanwhile, Marilyne Crestias, Interim CEO of the Clean Energy Investor Group, pointed out the substantial investment opportunities in the Pilbara.
Conclusion
The report concludes that adopting these measures is vital for Australia to maintain its competitive edge in a world increasingly focused on carbon pricing and to establish itself as a frontrunner in the global green transition. Embracing these recommendations will be crucial for harnessing the full potential of the Pilbara region and advancing Australia’s role in the global clean energy landscape.