The Chichester solar gas hybrid project will involve the construction of a 60MW solar photovoltaic generation facility, as well as a 60km transmission line linking the hub's Christmas Creek and Cloudbreak mines with Alinta's Newman gas-fired power station and a 35MW battery facility.

The project is due to be completed in mid-2021, after which up to 100% of daytime stationary energy requirements at the Chichester Hub will be provided by solar generation, with the remaining power requirements to be met through the integrated battery storage and gas power station facilities.

The project is expected to displace around 100 million litres annually of diesel used in the existing Christmas Creek and Cloudbreak power stations.

"Reliable and competitive energy generation remains an important consideration for the mining sector in Western Australia and as a significant consumer of energy, we continue to identify opportunities that have the potential to lower our costs while also improving our carbon footprint," FMG CEO Elizabeth Gaines said.

"This landmark project is a first on this scale for the Pilbara and will reduce carbon emissions from stationary generation by around 40% at Fortescue's Christmas Creek and Cloudbreak mining operations, while driving long-term sustainable cost reductions to maintain Fortescue's global cost leadership position."

Gaines said FMG would invest an estimated US$250 million in energy transmission infrastructure, which would complete the integration of the company's Pilbara iron ore operations into an efficient energy network.

Alinta will receive funding of A$24.2 million from the Australian Renewable Energy Agency (ARENA) and $90 million from the Northern Australia Infrastructure Facility (NAIF).

"The project will highlight the benefits of integrating renewable energy into mining processes and demonstrate how renewable energy can help reduce emissions in the sector," federal minister for energy and emissions reduction Angus Taylor said.

"The combination of solar and gas means the mining operation will have clean, secure and reliable energy supply from morning to night.

"Importantly, as mining operations move away from a reliance on diesel, and the costs for firmed renewable technologies decrease, electricity costs will fall and mines will become more competitive."