Esperance is on track to slash yearly carbon emissions by close to 50 per cent with the construction of a more efficient power station, battery storage system and renewables hub for the region.
Horizon Power announced on January 9, that West Australian business, Contract Power Australia, would be awarded the Power Purchase Agreement for the future supply of electricity to Esperance.
The 20 year deal will see the company supply greener, cheaper electricity to Horizon Power from 2022, when the current agreement with Esperance Power Station expires.
The power arrangement will reduce the cost of supplying electricity by an estimated 39 per cent.
Horizon Power chief executive officer Stephanie Unwin said the agreement was an excellent outcome for Esperance customers
"A new renewables hub will be constructed as part of the project, bringing together solar and wind power to generate up to 46 per cent of Esperance's electricity annually," she said.
"This will include a 4.0 megawatt solar farm and two new wind turbines, each capable of generating 4.3 megawatts of power."
Improvements in design and technology means the two new wind turbines are set to produce 58 per cent more wind power annually than the region's six existing wind turbines combined.
Providing complimentary power, the solar farm will feature more than 10,000 solar panels, making it the largest of its kind in Horizon Power's portfolio.
After years of lobbying for a community owned renewable energy model for the town, Esperance Community Power Project Chairman Karl Raszyk said the group welcomed the announcement.
"It is good to see that Contract Power's new power plant will be fast response and able to run back using a lot less gas allowing more renewables," he said.
"It also creates opportunities for a community model which we have been lobbying for for three years now.
"We would like our model to build on the 46 per cent announced and bring that up to a higher level over time, our community model is for 100 per cent solutions into the future."
Ms Unwin said Horizon Power recognised the Esperance community's strong support for renewable energy.
"Not only are we doubling the amount of renewable energy being provided to our customers, we will also be exploring, in consultation with the community, their interest in, and the possibility of, a future shared ownership model for the solar farm," Ms Unwin said.
Esperance Community Power Project community relations officer Megan McDowall said the group were pleased to see the community's desire for involvement acknowledged, and hoped to see innovation continue during the 20-year contract.
"Whilst it's good the new power generation will reduce the cost of delivery for the state government, and will benefit the WA taxpayer more broadly, that won't necessarily directly flow to the consumer in Esperance," she said.
"We are very keen on working with Horizon Power towards a community owned component of that power generation in the future which will deliver a more tangible local community benefit.
"We think a 46 per cent renewable component is a good starting point for our future power generation, but, as technology and pricing evolves, feel it is critical we continue to improve on this, inside the life of this contract.
"I think the community is quite happy to embrace an innovative power arrangement and to continue to encourage Horizon Power to progress in that space."
Construction on the power station to be located in the Shark Lake Industrial Park will begin in September 2020 and is expected to create more than 50 jobs over the 15-month build.
Horizon Power and Contract Power Australia said they would work closely with the Goldfields Esperance Development Commission, the Esperance Tjaltjaark Native Title Aboriginal Corporation and local contractors.