Mining sector looking toward hydrogen, battery storage to decarbonise

10th November 2021

By: Marleny Arnoldi

Creamer Media Contributing Editor Online


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The global energy landscape is changing amid a rush to net-zero emissions by 2050, and renewable energy is going from strength to strength, with these projects having captured nearly 50% of all new generation build capital in 2020.

Energy services company Wärtsilä Canada business development manager Mark Kennedy said during an Energy and Mines World Congress 2021 session on November 9 that, by 2030, this would likely increase to 67%.

He did, however, question whether a 100% renewable energy-driven mining sector was possible, stating that energy storage solutions and optimised management would be key.

A separate panel of experts during the conference echoed the sentiment, explaining that miners are increasingly looking to integrate battery energy storage solutions (BESS) to increase renewable energy penetration for remote hybrid solutions. 

Kennedy made reference to an example in the Graciosa Island of Azores, which used a 4.6 MW diesel power plant as its grid for years, before switching intermittently to a 5 MW wind farm, 1 MW of solar and 7.4 MW of battery energy storage.

The island’s power system is integrated with Wärtsilä’s GEMS software, which helps to optimise, dispatch and coordinate the different energy sources.

The GEMS system can process 1 000 data points per second to dispatch different resources in an optimal way. It supports a variety of battery and power electronics to achieve optimal system performance.

In 2020, the island had 128 days of 100% renewable power, and resultantly, the levelised cost of electricity has gone down. The next step is to switch the island’s use of fuels to possibly hydrogen, to see a 100% renewables rate all year round.

Kennedy pointed out that energy storage had become a critical part of the energy transition discussion.

Global energy storage capacity had grown from 1.8 GW in 2017 to 5.5 GW in 2020, and was expected to reach 11.5 GW by the end of this year and, ultimately, 26 MW by 2025.

Simultaneously, lithium-ion battery pack prices had fallen by 89% from $1 191/kWh in 2010 to $137/kWh in 2020.

However, as the technology matures, it does get difficult to further lower costs, Kennedy highlighted.

He cited data by research agency BloombergNEF, which forecasted a lithium-ion battery pack price of $92/kWh by 2024, before decreasing to $58/kWh by 2030 and further to $45/kWh by 2035. 

“Every time energy storage capacity doubles, the price drops by 18%.”

Looking at a mining example, Kennedy said B2Gold’s Fekola mine, in Burkina Faso, has a 64 MW heavy fuel oil thermal plant, together with a 30 MW solar field – which caters to 20% of the mine’s power needs – and a 17 MW BESS.

He said the project was testament to the success that a hybrid energy plant could achieve, in saving 13-million litres of fuel a year and avoiding 39 000 t of carbon dioxide emissions.

“As we talk about the path to 100% renewables, it is going to be difficult to get there with wind and solar alone, even with significant solar builds, particularly in the mining sector.

“Therefore, Wärtsilä is particularly focused on carbon-free fuel and is investing heavily in hydrogen research and development. It has been testing equipment with increasingly higher blends of hydrogen. Wärtsilä has a roadmap to getting to 100% hydrogen plants in 2025.”

However, hydrogen comes with the challenges of burning quickly and at high temperatures, which creates challenges in combustion. Hydrogen is also more prone to leaking compared with, for example, natural gas. There is also the issue of a lack of a hydrogen supply network and infrastructure globally.

“Miners can only adopt the technology if hydrogen fuel is available, and the technology will only be deployed once demand is there. It is a chicken and egg scenario,” Kennedy stated.

However, Wärtsilä was seeing more hydrogen investments by governments globally , which is a critical piece of the puzzle.

Kennedy believes the mining industry is facing an energy transition where renewables are increasingly becoming a baseload and, while thermal plants will still be needed for backup, this can be performed by alternative fuels.

“Software is becoming essential, optimising generation and maximising the potential of renewables, as system reliability and stability remains a concern, and therefore will require integrated solutions.”

Renewable energy company Scatec release application lead Bunty Kiremire mentioned that there were three key advancements happening – techno-economic sizing and stability assessment, power system control and reliability, and the emergence of standards.

He said that emerging software tools are allowing for less stability issues posed by renewables. “Power system stability comes first, before any economic considerations can follow. There is no point in having a cheaper system with less reliable power at an operation as sensitive as a mine.”

Speaking to financing options for microgrids for mines, BloombergNEF analyst Nelson Nsitem said costs continue to fall, which increases the potential sizings for BESS.

At the moment, he said, lithium-ion batteries remain the most cost competitive solution and the most attractive for financing, but there is rising interest in other technologies because of lithium-ion battery supply chain issues.

“Mining companies have a few ways to go about financing, one being the power purchase agreement approach, but it will be increasingly important for larger mine sites to consider financing for their own generation. It also makes sense for new mine sites to have renewable energy and BESS incorporated in the budgeting for the mine.

“We are seeing public investment interest in BESS growing. Historically, there was no clear vision of how BESS contributes to cash generation, but this view around the value proposition of BESS is changing,” he noted.

Responding to the question of how miners are responding to the need to decarbonise and how BESS relates to that, gold mining company IAMGOLD technology and business improvement senior director Luc St-Arnaud said net negative greenhouse-gas emission targets require a look at all technologies to achieve targets.

Kiremire summarised the challenges of mining companies integrating BESS into hybrid energy systems as being commercial aspects, since the business case for it, as well as the necessary technology solutions, are in place.

He said BESS often involved third-party agreements, which tend to be onerous and take too long to conclude.

St-Arnaud confirmed that BESS was becoming more important, with market needs rising. “Mines require full-time energy and so ensuring stability in power and in back-up power is key. By 2030, BESS will likely be standard on all mines."


Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online


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