The chief executive of APA group, Australia’s biggest gas infrastructure company, was clearly chuffed. The company’s recently completed cyclone proof solar farm and battery at Port Hedland in the north-west of Western Australia had withstood everything that a major cyclone could throw at it.
The Port Hedland facility combines a 45 megawatt (MW) solar farm and a 36.5 MWh battery, and has been reinforced with steel piles driven 2.2 metres in the ground, strong cross-sections and a 10° tilt on its panels.
“The Port Hedland project was designed to withstand wind speeds of up to 288 kms per hour, a one in 500 year event,” CEO Adam Watson told analysts at the start of the company’s annual results presentation on Wednesday.
“In February 2025, Cyclone Zelia brought destructive weather to the region (it packed up to 240 km/h winds before landfall about 50kms north of the project. “It was pleasing to see that, not withstanding these challenging conditions, APA infrastructure enabled operational continuity for our customers and all of our people were safe.”
It’s noteworthy because Port Hedland is the first big solar project to be sited in coastal areas most vulnerable to cyclone activity.
And such projects will be needed as the huge Pilbara mining province transforms from being the country’s most emissions intensive economic powerhouse to its cleanest. Fortescue is leading the charge with a goal of reaching “real zero” at its iron ore mines by 2030.
BHP and Rio Tinto are being dragged along in its wake, and BHP flagged this week – in its own results presentation – that its efforts to electrify its trains and haul trucks has slowed with much of its own spending pushed into the 2030s.
APA is well positioned to deliver some, or even a loth of that infrastructure. Watson says there is a $33 billion market opportunities from decarbonising mining activities with renewables, firming and transmission in the Pilbara – where APA has a 4 GW pipeline of projects – along with Kalgoorlie to the south and Mt Isa in Queensland.
But that is about where the conversation on renewables started and finished. APA’s earnings from such projects jumped in the last year, thanks to new Port Hedland facilities and the Pilbara portfolio to bought from Alinta, and its existing operations at Darling Downs (solar), and Badgingarra and Emu Downs in W.A. (both wind and solar).
But the total earnings of its generation portfolio, including gas, amounts to $298 million, a fraction of the $2 billion it returned in the last year. It also owns Basslink, which returned $55 million.
And Watson – and the share market analysts – are clearly more interested in the $40 billion market opportunity for gas “firming” plants to support renewables in Australia’s main grid, and the $12 billion in new pipelines Watson says will be needed to transport the fossil fuel to the turbines.
There is huge debate in the Australian energy industry about the future of gas, a fossil fuel whose “clean” credentials are being rapidly undermined by the identification of increased methane emissions.
Gas has also proved expensive, gas turbines are going up in price and getting harder to get hold of, and its major technology competitor battery storage is enjoying another sharp fall in cell prices, is readily deployable and is not suffering any supply bottlenecks.
Which is why many companies, including those heavily committed to the gas industry, are now choosing big battery projects and sidelining their plans for peaking gas generators. See: Australia’s biggest gas advocates are quietly swapping out peaking gas plans for big batteries
Many in the gas industry, however, is deeply attached to the Australian Energy Market Operator’s prediction that between 13 gigawatts (GW) and 20 GW of new gas generation capacity is needed to replace coal. And Watson sees a huge market opportunity.
“So for every GPG (gas powered generator) that needs to get built, it also needs a pipeline to connect that GPG to the the pipeline transmission asset.” Watson said.
“It obviously needs (gas) storage … because when the GPG is required, you can’t just call up APA and say, Hey, I need some more (gas) volume. It’s a really compelling thing for us (because) it creates its own network (which have long term regulated returns).”
That’s important to remember. New gas generators need transmission and storage. APA is building such facilities for Snowy Hydro’s new Kurri Kurri plant, which will have 10 hours storage, not much more than a big battery.
Watson’s position is that there is no gas shortage in Australia. There is plenty of it in the Beetaloo Basin, as long as it can be piped south. And he insists that LNG import terminals are a dumb idea, which puts him at odds with the likes of Squadron Energy, owned by Fortescue chair Andrew Forrest, which has built one at Port Kembla.
“I don’t know how anyone can sit there and say that it makes any sense,” Watson said.
“There’s an LNG import terminal in Port Kembla that hasn’t been able to sign a customer, but it’s still there. The real point is, when you look at the abundance of supply, that there is no issue about domestic supply in Australia.
“The only issue is making sure that there’s the appropriate regulatory and policy settings to enable the producers to produce it.”
Which brings us to the question of emissions, which was put to Watson by several of the analysts. He said APA might have to cop more emissions, but this would be worth it if it helped deliver lower emissions to the rest of the economy – an argument the Australian fossil fuel industry has used to justify its massive exports.
“We’ve got a role to play in the energy transition,” Watson said. “But we’ve also got a role to play for our security holders, and that’s all about capital allocation and focusing our capital and focusing our people on those projects that deliver the best returns.”
Giles Parkinson is founder and editor-in-chief of Renew Economy, and founder and editor of its EV-focused sister site The Driven. He is the co-host of the weekly Energy Insiders Podcast. Giles has been a journalist for more than 40 years and is a former deputy editor of the Australian Financial Review. You can find him on LinkedIn and on Twitter.