Fortescue Future Industries does deal with another Andrew Forrest-controlled company for Queensland renewables hub

Fortescue’s green energy arm will partner with a company controlled by Andrew Forrest’s Squadron Energy on the development of a renewable energy hub in Queensland.

Fortescue Future Industries will partner with Windlab on the development of a Queensland renewable energy hub.

Andrew Forrest’s Fortescue Future Industries has done a deal with one of the mining magnate’s privately controlled companies over the development of a 10 gigawatt renewables hub in North Queensland.

The Fortescue Metals Group subsidiary said on Monday it would partner with renewables Windlab – 75 per cent owned by Dr Forrest’s Squadron Energy – to develop the so-called “super hub” precinct, one of a group of renewable energy zones targeted by the Queensland government as part of its $62bn plan to phase out the use of coal-fired energy by 2035.

While FFI did not give details of its agreement with Windlab on Monday, the company – taken off the market in a $68.2m buyout with Federation Asset management in 2020 – is already in the process of winning approvals for an 800MW wind farm near Hughenden in Queensland, about 300km south west of Townsville.

Windlab has not given a capital cost for its Prairie Wind Farm project, or the 1000MW Wongalee project that is also part of the deal. Squadron Energy has said its 450MW Clarke Creek wind farm precinct will cost about $3bn.

Fortescue Future Industries chief executive Mark Hutchinson. Picture: Lyndon Mechielsen

It is understood Windlab will be responsible for developing the renewable generation assets, including finding funding for their construction. The search for that project funding will be underpinned with an energy offtake agreement with FFI, which plans to use some of the energy generated to produce hydrogen.

FFI chief executive Mark Hutchinson said the agreement would help FFI realise its hydrogen production goals in Queensland, where the company is building an electrolyser manufacturing facility at Gladstone.

“The North Queensland Super Hub will provide the quantity of renewable energy we need to support large-scale green hydrogen production right here in Queensland,” he said.

While FFI is likely to be one of Windlab’s biggest offtake partners, chief executive John Martin said the company’s plans for the region would include “multiple offtake opportunities”.

While Windlab is still working through approval processes for Prairie Wind Farm, the two companies said they expected construction on the first stage of the hub to begin by 2025, with first power expected by 2027.

Squadron acquired the Clarke Creek wind, solar and battery project in February, and construction work at the $3bn project, 150km north west of Rockhampton, began in July. Future stages of the project are tipped to take its capacity to more than 1000MW of energy generation, backed by 2GWh of storage.

Clarke Creek’s construction was underpinned by 15-year 350MW offtake agreement with the Queensland government-owned Stanwell Corporation.