Lithium developer Liontown Resources [ASX:LTR] has tasked Zenith Energy to supply power at LTR’s Kathleen Valley Lithium Project.
Liontown said it expects the project to be the ‘largest off-grid wind-solar-battery storage hybrid power station for a mining project in Australia’.
LTR shares were largely flat on Monday, however, with the market seemingly indifferent to the news.
LTR shares are up 30% over the past year but have traded sideways year to date.
Source: www.tradingview.com
Liontown’s award for Zenith
LTR has awarded a letter of award (LOA) to Zenith Energy, an Australian power utility.
The award includes a 15-year term based on a Build, Own, and Operate (BOO) basis.
Zenith will provide 46MW of emissions-free power generation for LTR’s planned 95MW hybrid power station in Kathleen Valley, WA.
Zenith will be expected to not only maintain the 95MW power, but also to finance, design, and construct it.
The power station is expected to enter the commissioning stage in the first half of 2024.
The Hybrid Power Station includes:
- Wind generation from five wind turbines (each capable of generating 6MW)
- A 16MWp fixed axis solar PV array with a 17MW/19MWh Battery Energy Storage System (BESS)
- Provision of clean energy, with reliable synchronous condensers providing system stability and resilience
- A thermal power component comprising of 27MW of gas generation and 5MW of diesel standby generation
- The added ability to run in ‘engine off’ mode for substantial periods of time
Liontown also said that the facility will enable the company to strive for renewable power production (over thermal power), supporting Liontown to ‘meet and exceed its renewable energy factor commitments’.
Both Zenith and Liontown are hoping to finalise a binding Power Purchase Agreement within the next 90 days.
LTR and rising demand for lithium
Liontown’s CEO Tony Ottaviano commented:
‘We are delighted to partner with Zenith Energy, an experienced and highly competent power producer, following completion of a thorough competitive tender and commercial negotiation process. We believe Zenith Energy is an ideal partner to deliver an industry leading hybrid power station to meet Liontown’s energy needs and requirements for a high-capacity renewable solution. When fully constructed, this hybrid power station will enable Liontown to exceed our target of achieving at least 60% renewable energy at Project start-up and beyond.’
And Zenith’s Managing Director Hamish Moffat offered his thoughts:
‘The very thorough tender and commercial negotiation process conducted by Liontown has enabled Zenith Energy to demonstrate our innovation, flexibility, and ability to work as a valued partner to Liontown to deliver the Kathleen Valley power solution. The Letter of Award enables the partnership to move forward with the next stage of delivery of this industry leading, highly innovative, secure, low carbon emissions hybrid power solution to the Kathleen Valley project. Zenith Energy is proud to continue to play a lead role in the energy transition and to provide our partners with a glide path to net zero.’
Lithium stocks and the green future
Liontown expects the lithium market deficit to grow into 2030 due to tight supplies, while greenfield projects take 8–10 years to reach first production, slowed by permit issues, funding limitations, and geopolitical impacts.
The International Energy Agency (IEA) states demand for lithium will increase sixfold to 500 kilotonnes by 2030 and will need 50 more mines to cater for the incoming wave.
UBS and Macquarie have also been expressing concerns over increasing demand and current production channels not yet forecast to meet demand.
Now, back in 2021, eight out of 10 of the top performance stocks were lithium stocks.
And while lithium stocks have eased off somewhat in 2022, the demand outlook for the white metal itself is still strong.
With the easy money already made in the lithium sector, are there still any overlooked lithium stocks out there?
Yes, according to our latest research report on the lithium industry.
In a free research report, we have profiled three Aussie neglected lithium stocks we think are worth checking out.
Regards,
Kiryll Prakapenka,
For Money Morning
