Could miners and renewable energy companies collaborate to benefit both? 

That’s the question National Mining Chronicle asked following the release of a new paper by Deloitte, which highlighted the cost-saving benefits of renewable energy site integration.

Titled Renewables in Mining: Rethink, Reconsider, Replay, the report suggested miners could drive down energy costs by up to 50 per cent through the implementation of effective energy management programs.

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

Deloitte Consulting Mining Leader David Cormack said energy was one of the biggest expenses for mining companies, constituting approximately 30 per cent of total cash operating costs.

“Our analysis shows 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,” he 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.”

Realising the full benefits of renewables involves more than just installing a solar array or wind turbines. Mr Cormack said it required a willingness to rethink operational processes and to reconsider the way work was done.

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

Australia’s Clean Energy and Finance Corporation (CEFC) invests in renewable energy and energy efficiency across the Australian economy.

The organisation has previously funded Energy Developments Limited in its capture of waste coal mine gas to generate electricity and onsell to miners, as well as feed back into the grid.

It was also offered financial support for Sandfire Resources’ Western Australian DeGrussa copper mine, which includes a $40 million solar project.

With more than 34,000 solar panels, the 20-hectare solar farm is the largest integrated off-grid solar and battery storage facility in Australia, and potentially the world.

The DeGrussa Solar project supplies around 20 per cent of the annual power requirement of the copper-gold mine.

CEFC Chief Origination and Transaction Officer Paul McCartney said collaborations between miners and renewable energy companies were already starting to happen, but a high upfront capital cost and intermittency issues stood in the way of many miners getting on board.

“One of the barriers for implementing renewable energy is the larger upfront capital cost versus the rental cost of a diesel generator onsite,” he said.

“If the mine has a shorter mine life it’s very hard to make solar renewables stack up onsite.”

However, for miners more focused on ongoing operating costs, Mr McCartney said renewables offered a significant long-term cost saving over diesel and gas generation.

“The cost now of solar installations is probably well under $100 a megawatt hour, compared to onsite diesel prices which is up to about $300 a Mwh” he said.

“There is a substantial cost advantage and I don’t think fossil generation is going to get any cheaper into the future, whereas renewables are continuing to fall in cost.”

The price of solar panels and the time required to install them has fallen significantly over the last few years, making a renewable energy option more and more attractive.

Nonetheless, there is still the hurdle of intermittency issues if days are cloudy or conditions don’t lend themselves to solar generation.

“I think we probably do need better renewable solutions that have a balancing capability with batteries onsite,” Mr McCartney said

“Most sites have a mix of solar and diesel. The two systems need to talk to each other so that as the solar profile of generation declines the diesel generators know when and how much to kick in as the site demands.”

At Galaxy Resources’ Mt Cattlin operations in WA, power is provided by a dedicated diesel generator supplemented by 14 giant solar trackers and two wind turbines. The solar tracking feature allows the panels to follow the sun in all directions to maximise the power generated.

Galaxy Resources General Manager Brian Talbot said the solar panels produced 8-9 per cent of the mine’s power in the summer months, resulting in significant monthly savings.

Mr Talbot said he would consider using solar again, but believed higher quality wind turbines were the way to go.

“Wind turbine technology might be our preference for a more continuous load, in the sense that it’s not daytime dependent – solar really only reduces your daytime consumption,” he said.

“We are now evaluating upgrading our wind turbine units to newer industrial-scale technology that power providers use, which, based on our research, we believe are more robust and efficient than the earlier generation units.”

Echoing Mr McCartney’s statements, Mr Talbot believed more miners would get on board with renewables if they didn’t have to fund such a large upfront capital cost.

“For that to change there would have to be some sort of contractual way of buying the power at a rate that includes the capitalisation of the equipment over time,” he said.

CEFC, Deloitte and Galaxy Resources were unanimous in believing all mines would eventually incorporate renewables.