THE REALITIES OF RENEWABLES FOR MINES
By now, miners have enough on-the-ground experience implementing renewables for some real-world realities to be clear. Dornier Suntrace COO Martin Schlecht summarizes what has been learned to date in a superb interview with Energy and Mines. One example:
“Implementing solar and wind in a size matching the mine load at its peak generation is a straightforward task,” Schlecht begins. “However, maximizing carbon savings will require a higher share of renewables, which requires oversizing the renewable generation capacity and implementing energy storage for shifting the excess energy to times of low renewable generation.”
Let’s unpack this. 
It means that it’s not enough simply to substitute renewables for fossil-fuel-based (or grid-supplied) energy at an equal capacity to the maximum needs of the mine. Solar and wind are intermittent. Their generation curves often don’t match the power demands of the mine. To compensate, renewables must be installed at a far greater capacity than the maximum required to operate the mine, so there is excess energy to charge batteries to provide power when the sun is not shining, the wind is not blowing, or both.
As power costs from solar and wind continue to decline and costs of natural gas and diesel skyrocket, the business case for oversizing renewables is increasingly attractive. However, “It is the energy storage,” says Schlecht, that is still the most expensive element.”
The path forward
Schlecht says that by themselves, “Solar and wind each can reach renewable shares of 25-35% in most locations. The occurrence of solar (during the day) and wind (during evening-night-morning) can complement each other well, and it may also have a seasonal benefit of more wind blowing during the winter season.”
“Using both technologies together,” he recommends, “will limit the size of energy storage to those hours when both solar and wind are not generating sufficient energy. This storage will be much smaller compared to a solar (only) + battery plant. It can thus achieve higher shares of renewable energy at affordable cost.
Storage is key
Batteries are the key to achieving the high levels of renewable penetration necessary for most mines to meet their decarbonization targets. “Very high penetration renewable power,” says Schlecht, “will also require large energy storage to be integrated, which will make the renewable energy more expensive. [However, energy] storage prices are expected to come down in the next years … Lower cost of batteries will expand the business case for larger renewable energy shares.”
“Another aspect,” he continues, “is the cost of fossil energy: the prediction of the fossil fuel price development of the next years, and also the potential for a carbon tax will impact the fossil-based energy cost. This can improve the business case for renewable significantly. From my perspective, it is therefore beneficial to maximize the renewable share within the commercial criteria of the initial phase, and ‘pushing the envelope’ going for a reasonable profitability rather than making the highest IRR the decisive criteria.”
There are many other real-world insights in the interview. Read it in the latest edition of Energy and Mines, available here.
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EY: ESG STILL TOP RISK & OPPORTUNITY FOR MINERS
Image: EY Canada
“How can mining and metals companies navigate immediate challenges, such as rising costs and supply chain disruption, while progressing their transformation into purpose-led, low-carbon, digitally enabled organizations?”
So asks consultancy EY Canada in the summary of their just-released Top 10 business risks and opportunities for mining and metals in 2023 report. Environment, social, and governance (ESG) tops the list again, as it did in 2022. Supplanting climate change as the #2 concern is geopolitics, based on both heightened global conflict and growing resource nationalism. Climate change follows at #3, while supply chain disruptions, previously not included, enter their list of major issues for the first time at #6.
Read EY’s executive summary where you can also download the full 56-page report.
FORTESCUE TO EXIT FOSSIL FUELS BY 2023
We’re often drawn to news about Fortescue, perhaps the most aggressively forward-looking mining company in the world when it comes to addressing climate change and embracing the energy transition. See our recent segment about their home-grown initiative to repurpose an American coal plant to produce green hydrogen.
Now, a pledge announced in September commits to hitting net zero emissions, company-wide, without carbon offsets, by the end of this decade. As reported in Australian Mining, Fortescue founder and chairman Andrew Forrest says his company’s decarbonization strategy and associated investment, when fully implemented, will reduce annual operating costs by $US818 million ($1.21 billion), avoid three million tonnes of CO2 equivalent emissions per year, and supply a carbon-free iron ore product.
AM quotes Forrest, speaking at a CEO roundtable as part of US President Joe Biden’s First Movers Coalition and the United Nations Global Compact, as saying:
“We must accelerate our transition to the post-fossil-fuel era, driving global-scale industrial change as climate change continues to worsen … It will also protect our cost base, enhance our margins and set an example that a post-fossil-fuel era is good commercial, common sense.”
We say, “Amen.”
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