Renewables help cut energy bills in half: Deloitte

Miners could drive down energy costs by up to 50 per cent through the implementation of effective energy management programs, according to a Deloitte paper.

The Renewables in Mining paper explores the role renewable energy sources play in the sector and how they can offer an operator a distinct competitive advantage while demonstrating genuine intent to reduce greenhouse gas emissions and better manage energy use at operations.

According to Deloitte Consulting mining leader David Cormack, energy is one of the biggest expenses for mining companies, constituting approximately 30 per cent of operating costs.

“Our analysis shows that having an effective energy management program in place, and with renewables a major component of this, miners can substantially reduce their energy costs, by up to 25 per cent in existing operations and 50 per cent in new mines,” Cormack said.

“With renewable energy fast becoming a mainstream energy source, mining companies have a material opportunity to use renewables to lower costs, improve safety, reliability and sustainability, and mitigate risks to ultimately gain a competitive advantage.

“The ability to reduce emissions and preserve, or enhance, the mine’s social license to operate increases the size of the prize even more.”

The benefits are greater when new mines are planned, designed and built with renewables included as part of the energy mix, Deloitte reported.

“Acknowledging they are major producers and consumers of fossil fuels, we’ve seen leading mining companies go public with aggressive targets toward becoming carbon neutral,” Cormack said.

“With the traditional barriers of cost and reliability diminishing, renewables have reached a position where they really have to be in the consideration set, at the very least for new mines.”

Realising the full benefits from renewables involves more than installing a solar array or wind turbines, Deloitte continued. Cormack explained that it required a willingness to rethink operational processes and to reconsider the way work is done.

However, while miners need to challenge their capital projects groups and design teams, they do not necessarily have to go it alone.

“Renewables developers are seeking industrial customers who can offer utility-scale opportunities, new ecosystems are developing, and business models exist for defraying the upfront costs and sharing the value opportunity,” Cormack said.

“In many instances, developers are willing to work with commercial and industrial customers, such as mining companies, to create innovative, customised solutions.”