Australia-based Genex Power has signed an agreement to supply 337.5MW of solar power to iron ore company Fortescue for 25 years.

The energy company will supply solar power from its 2GW Bulli Creek Solar and Battery Project (BCP) to Fortescue’s subsidiary, Fortescue Metals Group, the first stage of its long-term power purchase agreement (PPA).

The solar plus storage project is being developed by Genex, Electric Power Development (J-Power) and Solar Choice.

Fortescue will use the energy to produce 385,000 tonnes of green ammonia from green hydrogen generated through a 550MW hydrogen electrolysis facility at its Gibson Island project.

The PPA is subject to financial close by Genex on the project by the end of 2024 and Fortescue's final investment decision on its Gibson Island project by the end of 2023.

Genex and J-Power are committing to the first stage of the project with a minimum capacity of 450MW. The PPA is expected to account for 75% of the revenue stream.

Genex is simultaneously negotiating terms with other parties for further solar offtake, which could bring the initial capacity of the project to 775MW. The project will also include up to 400MW of battery energy storage.

The final investment decision on the solar project’s first stage could be reached in the second half of 2024, with the first energy production anticipated in 2026.

Genex CEO Craig Francis stated: “Today’s announcement marks a major milestone, not only for Genex’s 2.25GW development portfolio but also for the Australian energy transition to renewables.

“Genex acquired the up to 2GW Bulli Creek Battery and Solar Project in August 2022, initially envisioning a stand-alone battery energy storage system as a first stage for the project.

"However, securing this long-term 25-year offtake agreement with Fortescue for 337.5MW of solar capacity at Bulli Creek has reshaped the first stage of the project into a large-scale solar farm.”