Miners are finally starting to look at ways to get their power generation off the grid with renewable energy sources.
Although the technology is burgeoning, the way of the future lies with hybrid power generators.
Global economies are always driven to expand, and with that the demand for metals and minerals continues to increase. But the current market has been putting a lot of pressure on the big miners and their service contractors to reduce operating expenditure while they weather the storm.
In remote locations where there’s little to no access to grid power, which means most Australian resource sites, the problem of power generation needs in mining camps, construction projects, exploration crews, and telecommunications is usually dealt with by traditional diesel fired generators.
Large, standalone diesel gensets can run 24/7, and are the most common option given that they are easily installed and need virtually no infrastructure, not even a foundation pad, meaning low up-front capital expenditure. Portability is also a major factor for easy mobilisation in construction or exploration.
However, they require large supplies of diesel, daily refuelling, and regular maintenance and servicing. They’re also noisy and harmful to the environment, meaning CO2 emissions, as well as the additional cost of the carbon tax.
All of these downsides mean that diesel genset running costs actually become pretty expensive in the long run.
With the growing focus on reducing operational expenditures (OPEX) and being more environmentally responsible, operators have started turning to more cost-effective and clean alternative energy solutions.
Thanks to modern tech developments, there are a number of options, but operators always face the inevitable trade-offs.
Cycled gensets (CDC) have a large battery bank connected to the DC power system.
Typically the site runs from the batteries and mainly uses the genset for recharging, which is better for fuel efficiency and life, but cyclic batteries are more costly and require a cyclic smart controller.
There is also solar and/or wind power generation, but this requires over-sizing of the solar panels or photovoltaics, wind turbine, and battery banks due to seasonal variation of the available light and wind.
While the running and emissions costs are extremely low, a setup like this is very expensive from a capital expenditure perspective.
Hybrid power generation
Hybrid power generators are the new “fourth estate” in remote location, off-grid power generation.
Exclusively, this is a combination of two or more energy sources coupled with a large battery bank connected to the DC power system.
When available, a hybrid system can run on solar or wind, run a site, and charge the batteries, but if renewables aren’t available, the site can be configured to function much like a CDC gen-set. This reduces operating expense by charging the batteries with any excess power harvested from renewable sources. In doing so there is less need to use the gen-set for battery charging. The only major downside to a hybrid solution is the large initial CAPEX outlay.
Leading the Charge
Started up in July 2012, the Australian Renewable Energy Agency (ARENA) is a government body dedicated to stimulating growth in the renewables sector, to make renewable energy solutions more affordable, and increase the amount of renewable energy around Australia.
Taking expressions of interest for renewable energy production grants last year, ARENA is now assessing projects for their viability, and the mining sector in Australia has shown a lot of interest with 30 separate applications for funding renewable projects.
CEO Ivor Frischknecht has a long history of dealing with renewable energy initiatives, having worked on clean technology investments at venture capital firm Starfish Ventures as the investments director, as well as directing new ventures at renewable energy start-up investor Idealab, among other renewable investment roles.
“We have an existing program, the Regional Australian Renewables program, with around 30 mining applications right now,” Frischknecht told Australian Mining.
ARENA is now at the stage of assessing the various funding projects and expressions of interest, with some mining companies having been asked to submit a full application.
“All of those players are interested in exploring how renewables will work, and without exception, their motivation is cost related,” he said.
“More than that, renewables cost a whole lot more up front than a conventional diesel genset, but they cost a whole lot less to run than a genset does, so those two things trade off against each other.
“They’re obviously interested in the lower cost of energy overall, taking into account both the capital cost and the operating cost. And so both the mining companies and ARENA believe that ultimately renewables will be cheaper.”
“There’s also some perceived risk in relation to operation, you know, people are worried that the technology might not work as intended, or that somehow the system will go down, so as a result we provide the incentives required to overcome some of those risks, both real and perceived.”
Frischknecht says these risks aren’t simply limited to the up-front purchase costs of hybrid power generation.
“The biggest barrier to projects like these is a lack of knowledge. How do you plan it? How do you get approval for it internally? What are the external approval processes that you need to go through before you can start construction on a renewable energy project,” Frischknecht said.
“There are a whole bunch of early costs and additional risks because [for the mining companies] it hasn’t been done before: for example, there are transportation and construction issues that you wouldn’t have with diesel gensets because you know exactly what you need to happen with them.”
There’s a whole host of questions that need to be answered in planning a renewable off-grid project such as this, and people don’t know the answers, so there’s a whole bunch of additional effort that’s required.
“For example, how do you transport this equipment in, is it sensitive, is it going to shake to bits on the road and does it have to be flown in? Can you use standard construction workers or do you need to have specialised technicians?
“So this isn’t core business, even though there might be a saving involved, it’s a hurdle to get over.”
Despite the hurdles, Frischknecht said that the mining industry, although a little shy about risking the money on such brave new projects, is one of the best places for ARENA to make investments, to offset those risks and help industry to find the confidence to get involved in experimenting with renewable energy sources that, in the long run, will deliver lower operating costs for everything from small exploration camps, right up to production level power generation.
“From our perspective, this is a very important initiative as energy demands in the resource sector are growing pretty strongly,” he says.
“So this off-grid market, particularly in the resources sector, is exactly where you want to be focussing investment, on the opportunity for making long-term cost reductions through renewable energy.”