Fortescue’s experience at its Australian iron ore mines shows how an integrated renewable energy network can cut costs, reduce reliance on diesel, and shield industry from price volatility and supply disruptions.

For decades, energy was just another item on industrial companies’ cost lists: a bill to pay and, wherever possible, reduce. But as industry gradually shifts toward electricity, a different question is coming to the fore: What if energy itself could turn from an operating burden into a source of competitive advantage?

Many executives fear that replacing fossil-fuel-powered equipment with electric alternatives could weaken their competitiveness. But access to abundant, reliable renewable energy—and control over it—could turn that equation on its head.

What is Fortescue doing in Australia?

Fortescue is one of Australia’s largest diesel consumers, and it is testing this idea in its iron ore operations in the remote Pilbara region of Western Australia. There, it is building what it calls the “Green Grid”: an integrated energy network that brings together renewable electricity generation, storage, transmission, equipment charging, and digital management.

The network is part of a broader program the company calls “Real Zero,” which aims to eliminate Scope 1 and 2 emissions from its onshore iron ore operations in Australia by the end of 2030, without buying carbon offsets. The network forms part of the program’s planned $6.2 billion in investment, equivalent to around 23 billion riyals.

What are Scope 1 and Scope 2 emissions?

Scope 1 emissions are direct emissions from sources owned by a company, such as diesel trucks at mines. Scope 2 covers indirect emissions from the generation of electricity a company purchases. The “without offsets” goal means the company will not simply buy carbon credits to balance out its emissions, but will work to reduce them directly.

Why is a mining company turning to electricity?

Alongside reducing emissions, the company cites clear business reasons: cutting reliance on diesel, limiting exposure to supply risks and price volatility, lowering operating costs, and strengthening long-term competitiveness.

Energy independence becomes even more valuable amid geopolitical instability, wars, and threats to vital trade routes such as the Strait of Hormuz. The company’s chief operating officer, Katie Charooga, points to gas supply disruptions after Cyclone Zelia hit the Pilbara coast, as well as the risks to diesel supplies posed by conflict in the Middle East.

According to company executives, once the transition is complete, it is expected to replace up to 1 billion liters of diesel—or its equivalent—annually, while reducing direct cash production costs by an estimated $2 to $4 per wet metric tonne of iron ore.

Charooga sums up the idea by saying that energy should be seen as a genuine competitive asset—not merely an operating input, but something the company can use to its advantage.

How does the Green Grid work?

Fortescue’s Pilbara operations span five mining sites, with around 800 pieces of mobile heavy equipment and a further 3,000 light vehicles included in its electrification program. The company is working with manufacturers including Liebherr and XCMG, and the first Liebherr T 264 battery-electric haul truck is expected to arrive in the Pilbara this year.

To power this equipment, the network—expected to be complete in 2028—will rely on four main components:

Solar power: 1.5 gigawatts of capacity, including a 100-megawatt solar farm that currently supplies around a quarter of the Iron Bridge mine’s electricity needs.

Wind power: More than 900 megawatts of capacity from a wind farm under construction, extending renewable generation beyond daylight hours.

Batteries: 5 gigawatt-hours of storage capacity, enough to supply a city the size of Perth with electricity for several hours.

Transmission network: Around 660 kilometers long, with 550 kilometers completed so far.

A digital management system ties these components together. The remote operations center coordinates energy supply and equipment, while battery management technology uses physics-based and AI-powered software to optimize charging and performance.

The virtual battery

One of the most interesting aspects of the project is that connecting the five mining sites to a single network makes it possible to transfer electricity from one site to another when clouds block the sun at one location. The most energy-intensive trucks can also operate more during daylight hours, when solar power is plentiful, to stockpile iron ore for processing at night.

The company’s project director, Corey Dennis, describes this approach as working “like a virtual battery.” Instead of storing electricity, the most energy-intensive work is scheduled for when power is available, making equipment use more efficient.

Is renewable energy really cheaper?

The idea is based on a measure known as the “levelized cost of electricity,” which is the average cost of generating a megawatt-hour over a power plant’s lifetime, including construction, operations, and fuel.

According to the “GenCost 2025-26” projections published by Australia’s CSIRO and AEMO, the levelized cost for new power plants in Australia in 2030 is expected to range from A$29 to A$76 per megawatt-hour for solar, and from A$64 to A$104 for onshore wind, compared with A$108 to A$184 for gas. These estimates apply to the Australian market and vary from country to country.

Can the approach be replicated?

Dennis believes the idea could be adapted for other energy-intensive industries by designing renewable energy systems around each site’s actual operating loads. He cites the cement industry as an example: knowing when a plant is running at full capacity, undergoing maintenance, or producing less makes it possible to design an energy system that adapts to those changes.

But whether the approach can be replicated depends on each facility’s age, design, and operating requirements. Alison Reeve, director of the Energy and Climate Change Program at Australia’s Grattan Institute, cautions that older facilities cannot simply follow the same approach, because “the real benefit comes from building something new.”

Roy Green, emeritus professor at the University of Technology Sydney, says the company has thought the project through and has a business plan, adding that “a lot could go wrong, but it looks like a logical sequence of steps.”

In heavy industry, the value of energy is measured not just by its cost, but by every hour of downtime a plant avoids and every supply crisis it escapes.

That is why the best way to describe energy in factories may not be as a cost to be reduced as much as possible.

It is more accurately a strategic decision that determines a facility’s ability to produce at stable cost and withstand price volatility and supply disruptions. This question is especially important for economies with abundant sunshine and major industrial and mining ambitions, such as Saudi Arabia.

That is what makes Fortescue’s experience worth examining from an economic perspective—not simply as the story of an Australian mining company, nor as a ready-made model for every facility, but as a window onto a broader transformation:

from treating energy as a bill to be paid to treating it as a competitive asset to be built.

Note: This article is for informational purposes. It aims to explain the news in clear, accessible language. The information is drawn from promotional material published by the Financial Times as partner content for Fortescue. All figures and statements cited come from the company and have been adapted and simplified; they do not represent the official position or statements of any other organization. This information may be updated after publication, so readers are advised to consult official sources for full details.