Andrew Forrest banks on $3bn green scheme in Queensland to exit coal by 2030
The billionaire’s private business arm will fund construction of the renewable hub in central Queensland, billed as the largest in the southern hemisphere.
Andrew “Twiggy” Forrest has joined Mike Cannon-Brookes in predicting the early exit of coal from the power system, with the iron ore mogul committing to fast-track a move away from the fossil fuel through bankrolling a $3bn Queensland clean energy project including one of the world’s biggest batteries.
The billionaire’s private business arm will fund the construction of the renewable hub in central Queensland, billed as the largest in the southern hemisphere, signalling the business mogul’s intention to plough his own cash into speeding up Australia’s bid to hit net zero emissions.
After tech billionaire Mike Cannon-Brookes put the Morrison government on notice a week ago that he would use a $8bn takeover bid for AGL Energy to close the company’s coal plants by 2030, Mr Forrest has weighed in and said Australia’s entire coal fleet should be shut by the end of this decade as part of the renewable switch.
“I would see that coal as a future use in energy, particularly for Australia, will be either scaling out completely or fully scaled out by 2030,” Mr Forrest told The Australian on Sunday. Coal plants, including stations in Queensland, are currently due to remain operating into the mid 2040s even as the state has a 50 per cent renewable target by 2030 and is pushing the funding of renewable energy projects.
“This project will power 660,000 homes, the equivalent of 40 per cent of Queensland households, all with green energy,” Mr Forrest said. “So it’s a really significant step in Australia’s march and the world’s march to say that energy doesn’t have to come from fossil fuels. Fossil fuel is but one alternative. Energy can come from several other alternatives now, and they’re huge, and they’re reliable, and we can make them a reality.”
The emergence of two of Australia’s richest men using their considerable family funds to aggressively push away from coal has loaded new pressure on the federal government as it battles the faster than expected exit of the fuel that provides up to 70 per cent of electricity for the national electricity market.
It’s also opened up a fresh debate about whether households may be more vulnerable to blackouts and higher prices if coal exits before enough renewable generation and back up is in place to bridge the supply gap.
Mr Forrest described the move to renewables as unstoppable and said he expected the record scale of Queensland’s Clarke Creek project to quickly be beaten by other rival developers.
“It is a record like the electrolyser record, which we look forward to being broken quickly by others. We hope to come along and then break them again ourselves because this is part of a massive trend. What’s even more exciting for us is that other people will quickly usurp those records,” Mr Forrest said.
The Clarke Creek wind, solar and battery farm, located 150 kilometres northwest of Rockhampton, will boast at least 1 gigawatt of wind generation, 400 megawatts of solar and a battery up to 2GW in size.
The investment is being made through Mr Forrest’s Squadron Energy unit, an arm of the Forrest family’s Tattarang business which owns 36 per cent of the iron ore giant Fortescue Metals Group.
While Fortescue is given the right to develop projects first, he opted to make the investment privately as the nascent FFI business was not at the scale required several years ago when it first started working on Clarke Creek.
“FFI had of course the right to do it under the Fortescue First policy,” Mr Forrest said.
“Now FFI just wasn’t at the maturity scale, which could ever put on a multi-billion dollar wind, solar and battery farm. But very soon it can and will be and the whole of the finance market has moved to support the FFI to the world. I have no issue that FFI from here will be able to attract and be able to allocate the capital.”
The West Australian businessman made the renewables announcement at a sod turning event for Fortescue Future Industries’ Green Energy Manufacturing Centre in Queensland with 2GW of electrolysers — which make hydrogen out of water — expected in 2023, as well as making wind turbines, solar panels and electrical cables.
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FFI started construction of the world’s largest electrolyser facility at Gladstone on Sunday. The green arm of Fortescue plans to use the first electrolysers manufactured at the facility in early 2023 at its proposed green hydrogen to ammonia project at Gibson Island.
Mr Forrest has committed to spending 10 per cent of Fortescue Metals’ profits on FFI projects. But he has said that any projects FFI commits to will be externally funded without having recourse to the Fortescue Metals balance sheet.
Analysis last year by The Australian of publicly available information suggested the cost of building just 13 of the projects identified by FFI as development candidates would be up to $US148.5bn ($195bn).
Since then, FFI has added another seven hydropower and 11 geothermal energy projects in PNG alone, plus new projects in Canada and New Zealand.
The federal government sees “clean hydrogen” as being an essential part of the nation’s technology-led move to zero carbon by 2050.
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