BHP has announced four new renewable power agreements, to meet power demand for its Escondida and Spence copper operations in Chile.
The new contracts will meet Escondida and Spence’s current energy needs and also contain flexibility to help manage future demand as well. BHP aims to supply Escondida and Spence’s energy requirements from 100% renewable energy sources from the mid-2020s.
“These new renewable energy contracts will increase flexibility for our power portfolio and will ensure security of supply for our operations, while also reducing costs and displacing CO2 emissions,” said Daniel Malchuk, President of BHP Minerals Americas.
“From a commercial perspective, these contracts will deliver an estimated 20% reduction in energy prices at Escondida and Spence operations.”
“Good business considers the financial and social value in making decisions in the long term interests of shareholders.”
“This is an important step in our transition to sustainable energy use over the medium term in Chile.”
“Our path to 100% clean energy in Chile began earlier this decade when the Kelar power plant environmental permit was switched from coal to gas, enabling power supply from lower emission sources.”
The separate contracts agreed by Escondida and Spence are 15 year contracts for 3 TWh/y to ENEL Generación Chile and 10 year contracts for 3TWh/y to Colbún, following a competitive tender process. The ENEL contracts will begin in August 2021 and the Colbún contracts in January 2022.
The contracts will effectively displace 3 million tpy of CO2 from 2022 compared to the fossil fuel based contracts they are replacing – this is the equivalent to the annual emissions of around 700 000 combustion engine cars.
The new renewable energy contracts will be value accretive even including a provision of approximately US$780 million related to the cancellation of the existing coal contracts which will be recognised in BHP’s 2H19 financial results.
Read the article online at: https://www.worldcoal.com/power/21102019/bhp-targets-100-renewable-energy-at-escondida-and-spence-operations/