Mining houses’ use of microgrids and renewable energy to generate power and supplement diesel energy at isolated mining operations has been steadily increasing, says renewable-energy and microgrid consultant THEnergy.
THEnergy founder and MD Dr Thomas Hillig notes that the company has been “observing the market closely for the past three years and, in this last year, more and more mining companies have become interested in using renewables”.
He cites Canadian gold miner Iamgold as an example, as the company announced in April that it would develop a 15 MW solar photovoltaic plant at its Essakane gold mine, in Burkina Faso. Essakane is the largest privately held business in Burkina Faso and produced 377 000 oz of gold in 2016. Owing to its isolated location, the mine operates off grid and relies solely on costly, carbon-intensive heavy-fuel oil power.
Iamgold signed a power purchase agreement (PPA) with French independent power producer (IPP) Eren for an initial period of 15 years. Multinational energy and marine equipment manufacturer Wärtsilä, headquartered in Finland, will integrate and build the solar plant for Essakane. The groundbreaking ceremony was held on May 26.
Additionally, Hillig says, Canadian miner Nevsun announced its plans last month to construct a 7.5 MW solar plant to reduce diesel consumption at its Bisha gold and copper mine, in Eritrea. He explains that, under the terms of the ten-year PPA, temporary generation equipment supplier Aggreko will provide 29.5 MW of solar-diesel hybrid power for the mine.
Hillig attributes these developments to growing confidence in renewables, stating that mining companies initially had serious doubts about renewables. “However, various prototypes, some of which were subsidised by government entities, or used battery storage, have proven the concept of combining solar or wind with fossil fuel.”
He notes that Africa and Australia are focused on hybrid solar-diesel power generation, while Canada and South America lead the development of hybrid wind-diesel plants.
Reliance on solar in the central and eastern mining destinations of Africa and Australia is not necessarily related to their comparatively similar climates, but “solar is also simply easier to implement”, says Hillig.
He adds that companies using wind power have to conduct wind-speed measurements over a year, at least, to determine the viability of a project, while logistic challenges can arise when transporting a large wind turbine to a remote site with limited road infrastructure.
Solar, however, is more flexible. Hillig says small solar power plants are relatively easy to build and at similar cost per kilowatt as large plants.
He acknowledges that, in locations that have excellent wind conditions, the cost per kilowatt could be lower than that of solar, but adds that wind conditions are “very site specific”.
The hybrid plant market is focused on “harvesting low- hanging fruit” and, compared with wind, solar is “easy pickings”, says Hillig.
“From a project development perspective, the developer has to find a mine that has relatively high diesel costs, good framework conditions for renewables – including a suitably long remaining life-of-mine, a willingness to commit to long-term PPAs and an openness for new technologies.”
He points out that the developer would also have to approach the mine at the right time – when existing supply contracts, such as diesel fuel supply, IPP contracts or diesel rental contracts, are coming to an end – to realise new on-site renewable- energy projects.
The benefits of the increased use of hybrid solutions, whether solar or wind, include reduced diesel consumption and the associated cost and environmental benefits, ease of implementation and improved security of energy supply.
Another factor in the favour of hybrid use is that brands known for conventional temporary generation, such as equipment suppliers Caterpillar, Cummins, Aggreko, Wärtsilä and ABB, are all active in the hybrid energy generation space. This increases the trust in off-grid hybrid solutions using renewable energy, adds Hillig.
“Declining prices for renewables and energy storage have considerably improved the business case for mines, which also feel more comfortable in entering long-term commitments of ten years or more.”
Further, he believes that mining companies have recognised that the advantages of renewables go “beyond pure cost savings”, as investment in such solutions could generate positive publicity and enable them to be positioned and perceived as progressive, attracting interest and investors.
Hillig comments that mines could theoretically go as far as using their excess generating capacity to supply or supplement the power requirements of the communities that inevitably develop around mining operations. He notes that the actual energy demand of these initial communities will be “a small fraction of the electricity demand of the mine, especially for off-grid mines in remote areas”.
Hillig also cautions that mining settlements typically show a drastic decrease in size after a mine closes. “So, while technically this idea is feasible, there may simply be a big mismatch of generation and demand once operations have concluded.”