THEnergy

The year 2019 was the turning point for renewable energy projects at remote mines. More than a dozen projects were commissioned or announced. Mining companies have adopted solar and wind power to reduce their energy cost and carbon footprint in a rather lengthy process.

In the last years, successful flagship projects have removed concerns about production loss and independent power producers (IPPs) have started financing solar and wind plants at remote mining sites. IPPs sell electricity to miners on a power purchase agreement (PPA) basis. To mining companies, the PPA cash-flow is similar to what they are used to from diesel contracts – but it comes with cost reductions. IPPs are highly specialized in electricity generation, they are also looking at other solutions for cost reduction. It is no surprise that diesel genset efficiency optimization have also sparked interest. Diesel engines only convert 40 % of the fuel energy into electricity, while the rest is not used. Waste heat recovery can reduce diesel consumption by approximately 7 %. The approach is based on conventional steam turbine technology, but advances have allowed this to be deployed at a smaller scale. It is already proven in applications like biogas engine heat recovery, biomass combustion, industrial waste heat, and geothermal heat.

“Waste heat recovery is the low hanging fruit in the diesel reduction game”, points out Thomas Hillig, Managing Director of THEnergy, a Germany-based management consultancy in Munich specialized in cleantech innovations. “Renewables have recently opened the door for new approaches because they have increased the acceptance of more capital-intensive solutions in the mining industry.” The report “System optimization of renewable energy microgrids with heat-recovery in remote mining” shows that heat recovery can also go hand-in-hand with renewable energy approaches for diesel reduction. In a time when cost optimization and carbon mitigation are gaining importance, the question is not which of the two solutions to choose. The answer is to combine both solutions together.

The Dutch manufacturer Triogen has developed a containerized “e-box”, a solution that is tailor-made for remote mine sites (Figure 1). It has been designed for easily upgrading any diesel genset without changing its operations and thus without affecting maintenance or warranty requirements. The solution is based on the conventional steam turbine technology, yet is fully automated, compact and simple to install. Two standard 20 ft shipping containers are connected to the exhaust gas stack of diesel gensets and the e-box generates electricity from the waste heat. The electricity is fed into the local grid, so that diesel gensets do not need to produce this power and subsequently consume less fuel.

Triogen’s technology has accumulated over 1 M operating hours on 50 installations. The e-box solution has successfully been field-tested for mining applications and is now being deployed at the remote site of a blue-chip mining company. Henning von Barsewisch, CEO of Triogen adds: “Our containerized e-box has created sustained awareness from mining companies, IPPs, diesel genset OEMs and rental companies because of its short payback time of two years and its quick and easy deployability.” Since the Triogen e-box converts waste heat, it is a zero-carbon technology which addresses the drive for cleaner mining. A single e-box saves 300.000 l/a of diesel. This is approximately the same as a 0.7 MW solar power plant in a rather sunny region. Annual CO₂ reductions amount to 800 t per e-box. In the quickly growing market of renewable energy solutions for remote mines, efficiency improvements of gensets can generate competitive advantages for mining companies and energy providers by pulling all the cost-efficient diesel reduction levers of onsite power plants. (THEnergy/Si.)

In the last few years, more and more mining companies in Africa have adopted wind and solar systems to reduce their energy costs at remote off-grid mines. In this first phase, the initial focus was on the integration capabilities as miners were afraid that adding intermittent renewables such as solar and wind could affect the reliability of power supply and even lead to production losses. In various microgrid applications, renewables combined with diesel, HFO, or gas have proven to provide reliable power supply to remote mines (Figure 1).

For almost all mines, the integration of renewables will have a positive impact on their energy cost position. Mining companies do not have to invest their own money. Independent power providers (IPPs) invest in the renewable energy infrastructure and sell electricity to mines through power purchase agreements (PPAs).

“This second market phase is characterized by price competition”, explains Thomas Hillig, managing director of THEnergy, Munich/Germany. “With the support of a leading renewable energy player, the new report analyses how IPPs can offer extremely competitive PPAs to remote miners.”

Large IPPs take advantage of economies of scale on components for solar and wind power plants not only for remote mining projects but also for much bigger grid-connected plants. Market leaders have managed to optimize the planning and construction processes substantially. However, conducting projects in remote locations, especially in Africa, requires an extended experience. Amongst the challenges of undertaking projects in Africa is financing, which requires an excellent relationship with local and international banks.

Cost optimization does not necessarily mean minimizing CAPEX but rather focusing on the total lifetime of the project and including O&M. It is also important to take the interplay of the different energy sources into consideration. Not every kWh of solar and wind energy generated means equivalent fossil fuel savings. When gensets run at suboptimal loads, they lose efficiency and require additional maintenance.

“During the last 14 years, we have gained experience in renewable energy projects including solar-diesel hybrid microgrids, projects in remote locations and in developing countries”, points out Alexis Goybet, Head of Hybrid Solutions at Voltalia, Paris/France. “Our experience adds up to our economies of scale in procurement and translates into significant overall cost-reductions in the range of 20 to 30 % in comparison to new market entrants.”

These overall cost reductions will make solar and wind energy extremely attractive for many mines. The number of remote mines that add renewables to diesel, HFO or gas is expected to grow quickly all over Africa. (THEnergy/Si.)

Iamgold has announced it is adding a new 12.5 MW solar PV plant to its Essakane gold mine in Burkina Faso. The Canadian company has signed a power purchase agreement (PPA) with the French independent power producer (IPP) EREN for an initial period of 15 years. The multinational Wärtsilä headquartered in Finland will integrate and build the solar plant.

Another Canadian miner, Nevsun, followed by announcing a 7.5 MW solar plant to reduce diesel consumption at its Bisha mine in Eritrea. Under a ten year PPA, Aggreko will provide a total of 29.5 MW of solar-diesel hybrid power to the gold and copper mine.

Africa and Australia are turning into “solar-for-mining hotspots”, while Canada and South America lead the development of wind-diesel hybrids (Figure 1).

“This upturn has become apparent during the last few months”, according to Thomas Hillig, managing director of THEnergy, a Germany based consultancy specializing in microgrids. “We have been observing the market closely for the last three years. In the past twelve months, more and more mining companies have become interested in renewables.”

Several factors contribute to this development. In the beginning, mining companies had serious doubts regarding the reliability of renewables. Various prototypes, some of them subsidized, some with and some without battery storage, have proven the concept of combining solar or wind with fossil power sources. In addition, brands known from conventional energy such as Caterpillar, Cummins, Aggreko, Wärtsilä and ABB – that are active in hybrid markets – increase the trust in renewable energy off-grid solutions. Declining prices for renewables and energy storage have improved the business case for mines considerably. Mines also feel more comfortable entering long-term commitments of ten years or more. Mining companies see that the advantages of renewables go beyond pure cost savings in that they could generate positive publicity and also position them as progressive toward investors. Internally, renewables have turned out to be an attractive platform for ambitious employees to qualify for further management challenges.

Maybe even more important are the lessons learned on the part of the renewable companies. They started to speak the language of miners and to understand the necessity of tailor-made solutions for individual mines. Renewable energy players have realized that many mines are not willing to invest their own capital or to commit to long-term PPAs that correspond to the physical lifetime of solar or wind assets. The formation of financing solutions for relatively short-term PPAs was crucial. This also calls for the emergence of a plan B in case that PPAs are terminated earlier or are not prolonged as expected. Solar companies in particular dedicate resources for making solar plants more flexible through semi-mobility concepts that facilitate their dismantling and redeployment at different locations. Finally, renewable energy players have started to apply modern sales and marketing tools to spread the message to mining decision makers. “The newly announced projects will speed-up the uptake. If everything turns out well, mining companies could sign another five to eight PPAs for renewable energy supply before the end of 2017”, says Hillig. (THEnergy/Si.)

Due to the remote locations, power generation for mineral exploration camps is particularly expensive. Typically, power is generated by gensets, and the diesel fuel needs to be transported over long distances by truck or sometimes even by helicopter. The cost of solar and wind energy has declined dramatically over the last decade. Renewable energy could potentially contribute substantial cost savings in comparison to diesel power.

The new study “Mobile Solar and Wind Diesel Hybrid Solutions for Mineral Exploration” presents the analysis of the power generation requirements of the mineral exploration sector and identifies fields of application for renewable energy solutions. One of the main challenges consists of dealing with the relatively long lifetime of traditional renewable energy power plants. They are normally laid out for operations of 25 years or more. Mineral exploration camps typically cover only a relatively short part of the mining value chain. Power requirements are still low in comparison to the consequent extraction operations. Often, mineral exploration is performed by specialized exploration companies. Finally, at the exploration stage, there is no guarantee of finding enough mineral deposits to justify setting up a mining infrastructure. All the factors demonstrate that exploration companies have no interest in committing to 25 or more years of electricity supply at specific sites. Exploration companies require semi-portable, flexible solutions that minimize the effort of dismantling them and rebuilding them at a new location.

PFISTERER Holding AG, Winterbach/Germany, has developed a containerized microgrid solution tailored to the needs of the exploration sector (Figure 1). An integrated storage component ensures the reliability of the system. It improves the power quality, allowing the shift of energy during periods with insufficient wind or solar irradiation. At the end, that allows the diesel gensets to be completely switched off for longer periods, increasing the share of renewable energy in the system. The study can be downloaded at http://www.th-energy.net/english/platform-renewable-energy-and-mining/.

Further information/Weitere Informationen:
Pfisterer Holding AG
http://de.pfisterer.com

THEnergy – Dr. Thomas Hillig
www.th-energy.net

In recent years, an ongoing drought has caused a severe power crisis in Zambia. The new analysis “Power crisis and consequences for solar energy in the Zambian mining sector” from the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, Eschborn/Germany, in its role as facilitator of the Project Development Programme (PDP) and the consulting company THEnergy, Munich/Germany, shows that the framework conditions for investments in solar have become more attractive. The power crisis has caused Zambia to take emergency measures at extremely high costs to close the gap between generation and electricity consumption. The mining industry is by far the biggest consumer of electricity in Zambia and is suffering greatly. Production is impaired by load shedding and power outages. Sometimes the only remedy is to use stand-by diesel gensets for baseload electricity generation. Power from diesel is expensive, and so is grid power for mines. At the beginning of the year, the rates for miners have been raised to 10.35 US-ct./kWh, with further increases expected – and this in a country that used to have an abundance of inexpensive electricity from huge hydropower plants. A sustainable improvement of this situation is not in sight, as some new power plants will be completed in the next few years, but at the same time, the output capacity of the Zambian mines is expected to double, as significant investments have been made in past years.

A recent solar tender by Zambia’s Industrial Development Cooperation for two 50 MWp solar power plants has caught the attention of the mining industry. The best offer was at 6.02 US-ct./kWh, which is a significantly lower price than Zambia pays for emergency solar power and than mining companies pay for either grid or diesel electricity.

The analysis shows that local solar-diesel hybrid microgrids have become an interesting alternative (Figure 1). Zambia has excellent sun irradiation, which has a positive effect on electricity prices from photovoltaic (PV) power plants. A PV price of 6.02 US-ct./kWh is competitive with any kind of conventional energy, especially in a region that suffers from a lack of peak power during the day.

Decentralized power generation in the form of solar-diesel hybrid microgrids has advantages beyond price. It allows for a robust power supply in off-grid or weak-grid areas, such as Zambia, where the grid sometimes poses severe reliability issues. In microgrids, solar power, grid electricity and diesel back-up power can be integrated. Typically, solar energy has priority in these power plants, as hardly any direct cost is associated with the operation of a PV system. The mines can invest their own capital or can secure long-term solar power supply through power purchase agreements with investors who build a PV plant and sell the electricity to the mine. (THEnergy/Si.)

The study “A hybrid solution with concentrated solar power (CSP) and fuel for baseload mining operations” analyses the fit of Stirling Hybrid solutions for the mining industry. The Stirling engine based solution combines in an integrated system solar with gas or diesel as an energy source. The CSP-solar component relies on making it particularly appealing for extremely sunny regions. In many mining regions irradiation is high and this criterion is satisfied.

The business case for Stirling Hybrid solutions is particularly attractive if mines are very remote. Transport costs and “losses” increase the fuel costs largely, whereas the CSP plant is installed once and then provides energy. New built off-grid mines face often choices of paying for expensive grid-connection or generating the power onsite. On-site power stations often consist of diesel gensets. Stirling Hybrid solutions are an attractive alternative to diesel gensets. If the solar irradiation is high the CSP plant can generate the total output power. If the solar irradiation is not at its maximum the heat that is needed for the highly efficient Stirling engine can also be produced by various secondary fuel types. This makes the fully integrated system ready for baseload applications as in mining. A variety of fuels can be used, e. g. natural gas, CNG, LNG, LPG, biogas, industrial off gas, coal methane gas or even diesel. A combination of CSP and biogas is completely renewable energy generation.

In combined mining and metal processing plants off-gas that otherwise would be flared can be used in the Ripasso Stirling Hybrid solutions. It has extremely positive consequences on the sustainability and cost position. Further, the other gas types are cleaner than diesel or heavy fuel oil, especially if the high efficiency of the new hybrid solution is taken into consideration. The Stirling engine itself operates combustion free, which has many advantages regarding maintenance and operation of the power plant. The expected lifetime of the system is well above 25 years. The modular design allows for scalability in 33 kW steps and ensures a robust power generation, as the different power modules operate completely independently. The modularity of the Stirling Hybrid solution reduces the probability of production losses due to power outages to a minimum. Finally, the study identifies advantages regarding the use of land and water. Both can be very critical for mining operations at remote locations.

The Stirling solution is proven in naval applications and units of the Ripasso CSP system are installed in Southern Africa (Figure 1).

Further information/Weitere Informationen:
Ripasso Energy AB
www.ripassoenergy.com

THEnergy
www.th-energy.net