An $8 billion investment in transmission storage infrastructure will be needed if Tomago Aluminium, the state's largest power consumer, is to make the switch to clean energy.
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Likewise, the energy sector will need to spend more than $2 billion on new infrastructure if Orica's Kooragang Island plant is to fully decarbonise its operations in coming years.
The challenging figures, contained in a Australian Industry Energy Transitions Initiative report, put the financial reality of transitioning the Hunter's heavy industries to clean energy into perspective.
The initiative brings together key industry and finance companies to accelerate action towards achieving net-zero emissions in supply chains by 2050.
Rio Tinto, which is a part-owner of Tomago Aluminium, and Orica are members of the project.
The initiative's report 'Setting Up Industrial Regions for Net Zero', features an analysis of Australia's key industrial regions, including the Hunter. It identifies major abatement opportunities which depend on zero emissions electricity, abatement of nitrous oxide process emissions and green hydrogen.
The report says a $3.9 billion capital investment in renewable energy infrastructure and a further $4 billion for battery storage will be required to allow Tomago Aluminium to decarbonise.
It is presently in discussions with a range of renewable energy suppliers regarding potential supply contracts.
An Orica spokeswoman said the company and the state government were co-investing $37million in tertiary abatement technology, designed to eliminate at least 567,000 tonnes of carbon dioxide emissions a year, which would reduce the Kooragang Island plant's total emissions by 48 per cent.
"This week Orica announced its target to source 100 per cent renewable electricity by 2040, with the first phase in achieving this target underpinned by a power purchase agreement with (solar energy company) Lightsource BP to move to 100 per cent renewable electricity in the Hunter region from 2025," she said.
"Partnering with a renewable energy developer and transacting a power purchase agreement has been identified as the most commercially attractive option, rather than 'own and build' projects with high capital costs."
Orica has also partnered with Origin, to progress feasibility of a green hydrogen production facility in the Hunter Valley, and to assess ways the hub could support a green hydrogen industry in the Hunter Valley and beyond.
Hunter Jobs Alliance spokesman Warrick Jordan said the report highlighted the scale of the challenge that needed to be addressed if the goal of operating on 80 percent renewables in eight years was to be achieved.
"There's been progress with renewables, but there's a heavy industry sized hole at the heart of the energy grid in NSW and we need to get on to that yesterday. It's not like you can duck down to the shops and grab a pack of Triple As to keep an aluminium smelter going," he said.
"It's a constant surprise there's not more focus in NSW on getting that reliable renewables supply for heavy industry. In Victoria we're seeing major companies like Alinta pursuing huge offshore wind farms to power the Portland smelter, and in Queensland Rio Tinto have just gone out to market for over 1000 megawatts of wind and solar to power alumina refineries and smelters in Gladstone."
"You can see the hard work by Orica and Tomago to set and deliver on decarbonisation targets, but other governments are ahead of us in getting their transition right for heavy industry. There's effort underway from NSW, and now there's a federal government who isn't just sticking their fingers in the ears, we've got a much better chance of tackling this critical issue for workers and the Hunter economy. We definitely need to get cracking, otherwise we will run out of runway before the coal power stations retire."
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Matthew Kelly
Matthew Kelly has worked as a journalist for more than 25 years. He has been working as a general reporter at the Newcastle Herald since 2018. In recent years he has reported on subjects including environment, energy, water security, manufacturing and higher education. He has previously covered issues including the health and environmental impacts of uncovered coal wagons in the Hunter Valley, the pollution of legacy of former industrial sites and freedom of information issues.
Matthew Kelly has worked as a journalist for more than 25 years. He has been working as a general reporter at the Newcastle Herald since 2018. In recent years he has reported on subjects including environment, energy, water security, manufacturing and higher education. He has previously covered issues including the health and environmental impacts of uncovered coal wagons in the Hunter Valley, the pollution of legacy of former industrial sites and freedom of information issues.
