With renewable energy sources fast-becoming reliable, cost-efficient sources of electricity, many mining companies are reevaluating their power options. Hybrid power systems—combining two (or more) means of power generation—afford mining companies with a balanced approach to mitigate the risks associated with power outages while also lowering operating costs and improving sustainability.
Previously, concerns about the reliability of renewables limited their adoption. Wind and solar energy were seen as inconsistent and intermittent sources of electricity that could not be fully depended upon. In recent years, there have been significant improvements in renewable energy technology, making hybrid systems competitive options.
The energy efficiencies of solar panels and wind turbines have been significantly improved, as have reliable renewable energy storage solutions. These advancements have made it possible to develop effective and sustainable solar, wind, and battery hybrid power plants. The manufacturing and operating costs of renewables has also been falling over the years, which has made hybrid power plants very attractive to mining companies.
Reasons for Shifting to Hybrid Power
Energy is a significant expense for most mining companies. According to a 2018 study by Columbia Center on Sustainable Investment, energy accounts for 15% of total costs. For metals mining, this figure rises to a staggering 40%. As costs for diesel rise and that of renewables falls, hybrid power presents a great opportunity for mining companies to make considerable reductions in power costs. Mining companies clearly understand the criticality of energy in enabling production and mining operations. Companies are also aware of efforts, both grassroots and government-driven, to drive accountability and sustainability in industry. Hybrid power is an attractive solution on many fronts.
Hybrid power helps mining companies to decarbonize by incorporating renewable energy solutions. The mining industry has been under immense pressure from the government and climate change organizations to cut down their carbon emissions. Recently, US President Joe Biden appointed John Kerry as the United States’ first Special Presidential Envoy for Climate. The United States also rejoined the Paris Agreement, another indication that the US government will continue to push to have every industry reduce its carbon footprint. Renewable hybrid power systems are a great option to help mining companies drive down their energy costs and curtail emissions in the process.
Mining Companies are Continually Installing Hybrid Power
Several mining companies around the world are already incorporating hybrid power in their operations. For example, in May 2020, Australian Gold Fields’ Agnew Gold Mine in Western Australia installed a 56MW hybrid system that combines solar, wind, and battery energy storage system with off-grid gas/diesel generation.
The completion of the project made it the largest hybrid microgrid in Australia as well as the first gold mining company ever to use wind-generated electricity in the country. The mining company will have up to 50-70% of their electricity requirements being met by renewable energy.
Granny Smith gold mine is another company that has adopted hybrid power to address their energy needs in Western Australia. Aggreko Power Company integrated about 7.7MW of solar energy with Granny Smith’s existing gas power station.
Hybrid solutions are also being employed in Africa by companies such as Aggreko. For example, Resolute Mining’s Syama gold mining complex in Mali has partnered with Aggreko to install a 40MW thermal, solar, and battery power plant. Aggreko will be responsible for installing and operating this hybrid system. The power plant will incorporate a 10MW battery storage system, with about extra 20MW solar power planned for installation in 2023.
It is clear that mining companies are rapidly shifting to hybrid power due to the many benefits and cost-saving solutions that come with them. The rapidly changing renewables landscape will continue to drive hybrid power’s adoption in the mining industry.
According to a report by Deloitte, ‘miners have the opportunity to drive down energy costs by up to 25% in existing operations and 50% in new mines through an effective energy management program, of which renewables are a major component. In addition to cost savings, the ability to reduce emissions and preserve the mine’s social license to operate increases the size of the prize even more.’
At VECKTA, through our assessments for mining companies, we have seen similar statistics with the ability to realize cost savings typically ranging from 30-50% over business as usual practices with CO2 reductions of 50-70% and higher driving payback periods as low as 3 years.