Liontown Resources has executed a Letter of Award (LOA) with Australian independent power producer Zenith Energy for the supply of electricity to its Kathleen Valley Lithium Project in Western Australia for a period of 15 years.
Once fully constructed, the hybrid power station is expected to have the largest off-grid renewable capacity (46MW (wind and solar) plus 17MW BESS) of any mining project in Australia.
The LOA follows a competitive tender process and agreement on the key commercial terms: Zenith Energy will finance, design, construct, own, operate and maintain a 95MW hybrid power station at Kathleen Valley for an initial term of 15 years from commercial operation of the hybrid power station, which is expected to coincide with process plant commissioning in H1, 2024.
Liontown’s Managing Director and CEO, Tony Ottaviano, said awarding the power supply contract is an important milestone for Liontown and the development of Kathleen Valley.
“We are delighted to partner with Zenith Energy – an experienced and highly competent power producer – following completion of a thorough competitive tender and commercial negotiation process,” Mr Ottaviano said.
“We believe Zenith Energy is an ideal partner to deliver an industry-leading hybrid power station to meet Liontown’s energy needs and requirements for a high capacity renewable solution.”
The Hybrid Power Station will include wind generation from five wind turbines, each capable of generating 6MW, with a 16MWp fixed axis solar PV array coupled to a 17MW/19MWh Battery Energy Storage System (BESS) to provide additional clean energy.
The thermal power component will comprise 27MW of gas generation and 5MW of diesel standby generation.
The design of the hybrid power station was influenced by the need to achieve and maintain high levels of renewable energy penetration, meaning the facility will be able to run in “engine off” mode for significant periods of time.
Liontown hopes to meet and exceed its renewable energy factor commitments through a combination of incentives to produce renewable power over thermal power, and a renewable energy guarantee.
“When fully constructed, this hybrid power station will enable Liontown to exceed our target of achieving at least 60 per cent renewable energy at project start-up and beyond,” Mr Ottaviano said.
“We continue to deliver on our ESG credentials by taking real action to reduce the Project’s carbon emissions from the outset.”
The Letter of Award will allow Zenith Energy to begin the necessary planning, legal, engineering and design works required to facilitate the delivery of the hybrid power station in line with the Kathleen Valley project schedule.
The parties have also agreed to use their best efforts to finalise a binding Power Purchase Agreement within 90 days of the Letter of Award date.
Zenith Energy has also committed to working with the Tjiwarl Traditional Owners and recently announced a collaboration established with Tjiwarl Contracting Services (TCS), a wholly-owned subsidiary of Tjiwarl Aboriginal corporation.
This collaboration will see Zenith Energy and TCS work together to deliver low carbon emission power solutions for miners and communities on Tjiwarl native title-determined lands.
Zenith Energy’s Managing Director, Hamish Moffat, said the company is proud to play a lead role in the energy transition and to help Zenith Energy’s partners move towards net zero.
“The very thorough tender and commercial negotiation process conducted by Liontown has enabled Zenith Energy to demonstrate our innovation, flexibility, and ability to work as a valued partner to Liontown to deliver the Kathleen Valley power solution,” Mr Moffat said.
“The Letter of Award enables the partnership to move forward with the next stage of delivery of this industry leading, highly innovative, secure, low carbon emissions hybrid power solution to the Kathleen Valley project.”
