The BHP Group Ltd (ASX: BHP) share price is down 2.99% even though the ASX mining share just announced a significant agreement to purchase renewable energy.
BHP is aiming to lower its emissions in the coming years. An important step with this plan is changing its electricity usage to renewable energy.
Olympic dam in South Australia represents "one of the world's most significant deposits of copper, gold and uranium" according to BHP.
Image source: Getty Images
Renewable power purchase plan
The resources giant has signed a power purchase agreement with Neoen. This is expected to meet half of Olympic Dam's electricity needs from FY26, based on current forecast demand.
BHP said that it would enable Olympic Dam to achieve a net zero emission position for the contracted volume of supply.
How much power are we talking? It's expected to supply 70MW of electricity to Olympic Dam and will support Neoen to construct the 203MW Goyder South stage 1b wind farm, assuming all consents are obtained.
BHP revealed that this wind farm is to form part of the larger 'Goyder renewables zone' in South Australia, and will introduce new renewable generation into the South Australian electricity grid.
Neoen will also construct a large-scale battery energy storage system in Blyth, South Australia to support the purchase agreement, which will also "assist in improving the stability of the South Australian electricity grid".
This is part of BHP's actions to contribute to its medium-term target to reduce operational greenhouse gas emissions (scope 1 and 2 from operated assets) by at least 30% by 2030, compared to FY20. This could be important for BHP's share price in the future, to attract green-focused investors.
Renewable electricity is also helping power other BHP facilities in Western Australia, South Australia, Queensland and Chile.
Leadership commentary
BHP Olympic Dam asset president, Jennifer Purdie said:
The world needs South Australia's high-quality copper to build renewable technologies and infrastructure, and BHP is focused on producing that copper more sustainably.
This agreement will support BHP on its decarbonisation journey, and provide new firmed renewable energy and increased stability to the South Australian grid.
Adding to that, the BHP chief commercial officer Vandita Pant, said:
BHP is consciously working towards our target of at least a 30% reduction in our operational emissions by FY2030. Renewable energy partnerships, such as this agreement with Neoen, are important steps towards that outcome, and our longer-term 2050 net zero goal.
Why is the BHP share price down?
At the moment, most of the ASX share market is down, with the S&P/ASX 200 Index (ASX: XJO) down by 1.73%.
The Rio Tinto Limited (ASX: RIO) share price is also down by 2.47%, so it's not as though BHP is alone in its decline.
This is happening despite the iron ore price climbing overnight, according to Commsec.
The decline in the ASX share market appears to be because the US Federal Reserve is going to get to a higher peak interest rate than previously expected, and perhaps stay there for longer.
