The 10.6 million megawatt station, which is part financed by government green loans, is expected to provide Sandfire Resource's DeGrussa mine with 80 per cent of its daytime energy needs and slash carbon emissions by 12,000 tonnes a year.
Construction work on what will be one of the world’s largest integrated solar installations used to power a mine is due to begin in late July. Sandfire’s chief operating officer Mike Spreadborough said the power station will reduce the mine’s reliance on diesel fuel.
“By integrating diesel with solar power we’re significantly saving, it’s much cheaper than the historical costs of other fuels,” he said.
“It’s a double-whammy result in lowering energy costs with significant environmental benefits.”
More than half the $40 million solar power and battery storage facility’s cost was funded by federal government loans, with the Australian Renewable Energy Agency (ARENA) putting up nearly $21 million.
The federal government’s other green lender, the Clean Energy Finance Corporation (CEFC), committed up to $15 million while French renewable energy firm Neon, which will own the power plant, made up most of the difference.
Details about the project follow the federal government’s decision to redirect wind farm funding to bolster large scale solar projects.
The decision to direct the CEFC to pull funding for wind farms in favour of large-scale solar projects and new technologies drew criticism from the Greens, opposition and the Victorian state government.
ARENA was also instructed to refocus on larger scale solar and thermal energy products.
Sandfire’s sprawling project will feature 34,080 solar panels spread over 20 hectares.
The company hopes the solar plant, which will be about 900km north-east of Perth, will set new benchmarks for mines around the world using renewable power.
The plant will be integrated with the mine’s existing 19MW diesel-fired power station.
Mr Spreadborough acknowledged without government finance, the renewable energy project would have had trouble getting off the ground.
“It would be fair to say it would have been hard to get 100 per cent from normal commercial financing, that 50 per cent contribution was absolutely key,” he said.
However he was adamant Sandfire didn’t receive a free kick.
“CEFC and ARENA are expecting a return, with ARENA expecting to use the product to refund,” he said.
Mr Spreadborough hoped once the solar farm proved successful, Sandfire would attract other financiers for future projects.