Energy consumption and greenhouse emissions.

BHP to use half of state's electricity

Jeremy Roberts | March 27, 2008,25197,23437824-5013404,00.html

BHP Billiton will need nearly half of South Australia's current electricity supply to power its vastly expanded Olympic Dam copper and uranium mine.

The mining company wrote to potential suppliers this month revealing that power demand for the mine was expected to top 690 megawatts when it reaches full production in 10 years.

This 30 per cent increase on previous forecasts for the mine 600km northwest of Adelaide is equivalent to nearly 42 per cent of South Australia's total electricity consumption and nearly half of Adelaide's power supply.

An industry insider yesterday described as "staggering" BHP's new power needs, which exceed previous forecasts by 170mW.

It would require the building of new power stations in the state at a time when incentives for business to invest in traditional power generation are clouded by efforts to combat global warming.

The new BHP forecast comes a week after the Rudd Government's Garnaut report on greenhouse emissions recommended power generators not be compensated in a carbon trading scheme.

South Australia has been an importer of electricity for several years, and its power distribution system was stretched to capacity to meet demand during the record heatwave earlier this month.

BHP is the state's largest single power consumer, taking 120mW. The company will use the aditional 570mW to power on-site mineral processing to separate uranium, copper and gold, as well as for the expanded Roxby Downs township, a larger airport and the new open-cut mining operation.

The instability in the power generation sector adds to the challenges BHP faces in developing Olympic Dam.

A company spokeswoman yesterday described the request for 690mW of power as an estimate. "The expansion project remains in pre-feasibility and is yet to be approved," she said. But in correspondence to the state's power suppliers, dated March 5 and marked "commercial in confidence", BHP calls for expressions of interest to supply the power.

The correspondence was followed by in-person briefings on March 12, and asks suppliers to address three supply options: power generation at the Olympic Dam site, elsewhere in the state, or a combination of both.

The company says 60MW of the power would be used to run a desalination plant planned for the coast of the Upper Spencer Gulf, and to pump the water 320km north to Olympic Dam.

Providing the additional power within a 10-year timeframe will challenge South Australia's energy planners.

Gas-fired power stations normally take up to three years to build, industry sources said. Queensland's largest coal-fired power station, Kogan Creek in the western Darling Downs, which was opened last December, took four years to build.

Sourcing base-load renewable energy from "hot rocks" geothermal sources in the north of the state may become an option, but the technology has not yet been proved viable.

The South Australian Government has not imposed any mandatory requirements on BHP to source renewable energy.

South Australian Greens MP Mark Parnell said the lack of renewable energy sources for Olympic Dam would make the state a "greenhouse pariah".

"Our state risks being left with a huge carbon black hole as we become the greenhouse dump for one of the world's richest companies," Mr Parnell said.

BHP snubs SA carbon reductions

Jeremy Roberts

November 29, 2007
The Australian

BHP Billiton has distanced itself from South Australia's ambitious greenhouse gas reduction and renewable energy targets, vowing to use the "most economic" power source for its massive Olympic Dam expansion.

On a hot, dry day in Adelaide, new chief executive Marius Kloppers said the company's "local" operations - dominated by the proposed Olympic Dam expansion 600km north of Adelaide - would not be singled out to generate greenhouse gas reductions.

"It is a global issue - it is not a local issue," he said after addressing his first annual general meeting in Australia as chief executive.

Mr Kloppers rejected "any specific item" in BHP's portfolio of 33 current and proposed projects, including an expanded Olympic Dam, as producing emissions cuts.

"What we need to do is deploy every dollar in the most effective way - not target it towards any specific item which might, or might not, be the most effective one in the portfolio," he said.

Mr Kloppers' stance was backed by chairman Don Argus, who was asked if he would like to see significant renewable energy supply an expanded Olympic Dam copper and uranium mine.

"We will work on the most economic way to power what we have to power in this development," he said.

With Olympic Dam already the state's biggest consumer of electricity, the proposed expansion would more than triple its power demand to about 400 megawatts.

The company has committed itself to a 6 per cent cut in greenhouse gas emissions from its operations by 2012.

But the comments by BHP executives fly in the face of the Rann Government's target of cutting greenhouse gas emissions in South Australia to 60 per cent of 1990 levels by 2050.

The target was written into Australia's first climate change law, passed in July, which also aimed to have 20 per cent of electricity consumption coming from renewable sources by 2014.

The targets have been criticised for being voluntary. But Mr Rann said yesterday that the Government "was working with big and small business, to help meet these ambitious targets".

He pointed to the emerging hot rocks energy sector, based in the mid-north and northeast of the state, which "may prove to be a vital source of energy for our booming mining industry".

The expansion of the Olympic Dam mine has been delayed since company statements last year pointed to the release of an environmental impact statement by mid-2007.

The release of the massive document is now expected in late 2008 or early 2009, as the company addresses state government concerns over the project's environmental and greenhouse effects. The delay also stems from BHP's examination of a radical redrawing of its project.