Alinta Energy has locked in $175 million in financing for its transmission line project to supply power to the Roy Hill iron ore development – Australia’s biggest mining construction project to date.
Alinta Energy has secured $175 million in financing for development of a power solution to ensure the long-term requirements of Hancock Prospecting’s $10 billion Roy Hill iron ore project – a 55Mtpa mine, including a processing plant, airport and permanent accommodation village.
The package includes a $3.3 million working capital facility.
The funding will be used to upgrade Alinta Energy’s Newman Power Station (a 155MW gas-fired power station) and construct a transmission line from Newman to the Roy Hill project.
Alinta’s transmission line project comprises four elements: Newman 66/220kV substation including connection to the existing Newman Power Station 66kV switchyard; 123km 220kV 160MVA HV transmission line; Roy Hill 220/33kV substation including 6MW diesel power station; and 5km 33kV mine feeder distribution system, which delivers power into the Roy Hill mine processing facility.
It crosses over state and private landholder properties, including the Mining Act 1978 tenure of 12 different companies, three pastoral leases, two native title claim areas, crown land, freehold tenure vested in Western Australia, and the Newman Township.
“The whole project has been designed with security of supply to Roy Hill as a paramount consideration and, as such, all systems have redundancy with the exception of the overhead line, which has been constructed to withstand the worst cyclonic conditions experienced in the region,” Alinta Energy’s general manager power development Gary Bryant told Energy Source and Distribution.
Site construction commenced in January and the transmission line will be mechanically complete before the end of the year, ready for service on time and on budget. The project is scheduled to be operational as early as next March.
As gas-fired generation has a significantly lower cost than diesel, the line not only brings a reliable, but also a competitive power solution to additional customers in the region.
“Most existing mines or prospective mines in the East Pilbara region would use diesel as their fuel source for power supply. If the transmission line was extended at a future time those customers would have access to power through the gas-fired generation at Alinta’s Newman and Port Hedland power stations,” Mr Bryant said.
“Those power stations have high reliability, more than 95 per cent availability historically, ensuring transport of diesel – which can be an issue in the wet season – is not an issue.”
Housing the largest iron production in development globally is good news for Western Australia, with the Roy Hill project creating railway and port infrastructure, around 3600 construction jobs and ongoing employment for an additional 2000 people.
“Cost of operation in the Pilbara is high and energy is a significant proportion of these costs. Anything that enables the region’s commercial contributors to operate more efficiently maximises their profitability and, therefore, sustainability in the region and state,” Mr Bryant said.
“Commercial customers – large and small – want energy affordability without sacrificing the security they rely on. This is what Alinta Energy can provide, and building the transmission line allows us to expand who we supply it to, beginning with Roy Hill.”
Alinta Energy commenced development activities for the transmission line project in July 2012, with Mr Bryant saying the company worked collaboratively with stakeholders, including the West Australian government, to complete several major milestones.
“The entry into land tenure arrangements across the 123km transmission line corridor involved arrangements with traditional owners, pastoralists, government authorities and mining tenement holders and securing licences from the state government to construct and operate the transmission line,” he said.
“We worked closely with stakeholders – side by side – which enabled Alinta Energy to obtain the necessary approvals in a very short timeframe for a project of this nature,” he said.
In addition to being ontrack to complete the project against demanding deadlines both by, or before, schedule and onbudget, Alinta Energy’s safety record on the project has been outstanding. Currently, 300,000 hours have been worked through Alinta and its contractors and subcontractors with zero lost time injuries.
Mr Bryant says the record is a credit to Alinta’s focus on safety.
“Alinta Energy has sub-contracted Leading Edge helicopters to string the wire along the 239 transmission towers. This method is safer and has less impact on both surrounding infrastructure and the environment,” he said .
“The hauling and conductor wires can be strung without contacting the ground, which is important in the difficult terrain. Sections of the transmission line are strung in 10km sections, with a tower every 500m. Therefore, for every section strung, Alinta’s method avoids having construction personnel climb the tower 20 times, or more than 500 times through the course of the line.”
While Alinta Energy is currently focused on its existing customers, including successful construction and commissioning of the transmission solution to Roy Hill, Mr Bryant said there would be room for expansion looking forwards.
“Once this solution is complete, there is additional capacity available at both the Newman and Port Hedland power stations that we’d be interested in working with customers – including the mining and commercial and industrial sectors – to provide a competitive energy solution,” he said.