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Energy Use in Mining – Are Renewables Being Integrated Enough?

Energy efficiency is predicted to be one of the biggest drivers for mining companies in the coming 5 – 10 years. With energy prices rising around the world, and huge volumes of energy being consumed on a daily basis by every mine site, many are looking to renewable energy and alternative sources to help with this cost. The biggest challenge with fuel prices isn’t even the escalating cost, it’s actually the volatility of pricing. It is very hard to accurately forecast as it’s can be knocked out hugely by individual countries’ events.

Renewable energy sources such as solar, wind and hydro all offer potentially attractive solutions to this challenge. The cost of solar PV has dropped significantly over the last 2 – 3 years, placing it now cheaper than diesel power and forecast to become more economical than wind power in the not too distant future. Wind power has been lower cost than diesel for some time, depending on scale of course, and hydro power continues to be a commercially attractive option.

However, mining companies around the globe have been rather reluctant to embrace renewable sources of energy as the main generation point for their sites. When cost cutting is such a focus, along with reducing emissions, why does this continue to be the case?

A big push back from many miners is the intermittency of renewable energy (in particular of course, wind and solar). Wind and solar are by nature not consistent in producing energy, so having them as the base load energy source for a mine site could cause problems when a site is due to produce 24/7, or has a strong focus on productivity. A drop in energy providence would have a significant impact on productivity. Therefore many plump for diesel as a reliable source. However, a big opportunity exists in utilising renewables as part of your energy source. A paper compiled by Aurecon on off-grid solar use in mining showed that “A 1.2 MW solar installation could reliably supply 5% of the electricity for a 5 MW mine, reducing diesel consumption by 600,000 litres per annum, saving around $6 million in diesel costs over ten years.” Hardly a number to be sniffed at.

Another challenge is the location of mines, as many are off-grid and remote, so cannot utilise existing renewable sources. Of the others, not every mine site is conducive to popping up a wind or solar farm on the site (especially if located close to communities who already may have environmental concerns over the mine, let alone if you throw a wind farm into the equation). Working with some of the experienced engineering firms in the renewables arena, such as AECOM, or Aurecon, can help with conducting the pre-feasibility studies required for determining if your site is suitable. However, even if your exact location isn’t, that doesn’t mean there might not be another nearby site, or existing wind/solar farm that could be tapped into.

Some are certainly embracing the possibility of renewable energy though. Endeavour Energy and Joule Power are in the process of building and financing a $700 million hydro-electric power project in Sierra Leone, Bambuna Phase 2. This project is expected to significantly reduce the cost of energy for iron ore mining projects located North of Sierra Leone, near the Bambuna Dam. Elsewhere in Africa, in South Africa, Novatek, who specialises in the manufacture of hydropower equipment for hard rock underground mines, are recording steady growth over the past 18 months due to miners looking to reduce electricity bills. Rio Tinto’s Diavik Mine in Canada has a wind farm that achieves up to a 50% peak penetration rate. British Colombia, also in Canada and a strong mining province, use hydroelectricity as their greatest source of electric power generation.

Governments elsewhere too are encouraging the uptake of renewables by the mining sector. In Australia, the Australian Renewable Energy Agency (ARENA), despite budget cuts across the board in 2013, remained firm with their programme to foster the presence of renewables in mining. In Australia over 77% of the off-grid electricity use is by the mining industry, so there is a huge opportunity to reduce costs by integrating more renewable energy. ARENA offer funding up to mining companies who are interested in piloting renewable projects to fuel their site.

A recent report by Navigant Research forecasts that by 2022, between 5 – 8% of the world’s mining industry power consumption will be provided by renewable energy, with the majority of that coming from solar PV. The executive summary from that report is hosted elsewhere on Mining IQ. Not bad when you consider we’re currently at less than 0.1%!

The topic raises a lot of debate within the industry, as evidenced recently on the Mining Industry Professionals Linkedin group.  Bob Michel, Senior Project Manager and Chief Operating Officer, MTB Project Management Professionals, Inc. posted the discussion topic of “How can solar power projects be integrated with mining projects?” and has generated a very lively debate!

Johanna Hoffman, Director Sustainability and Research at Mining Energy Advisors in Toronto, Canada said: “There are different options depending on whether the mine is on- or off-grid. In on-grid situations, the mine could enter into a power purchasing agreement with the utility for the power produced or enter into an agreement with an independent power producer to feed into the grid on their behalf. In an off-grid situation (most likely in combination with diesel gensets), mines will probably prefer to start at lower penetration levels, essentially having solar PV act as peaker power and hence helping with inefficient genset generation patterns. For heat requirements, another good technology to think of is solar thermal. Some of the Chilean copper mines have begun using it. I’d also consider whether there’s an option to work with the local community on implementing the solar project.”

Many others contributed their thoughts and experiences, so check out the full discussion!