Canadian Mining Journal IESO Roundtable 2015

WATTS happening A LOOK AT ENERGY EFFICIENCY AND THE MINING INDUSTRY

A SPECIAL REPORT

BASED ON A ROUNDTABLE DISCUSSION INVOLVING 12 TOP INDUSTRY PROFESSIONALS POWERED BY:

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ENERGY EFFICIENCY IN MINING A new way of thinking about

ENERGY EFFICIENCY Terry Young Vice-President, Conservation and Corporate Relations

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Over the past four years, businesses have stepped up their conservation efforts.

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Brought to you by the Independent Electricity System Operator and your local electric utility.

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onventional wisdom used to be that increased demand for electricity was a great indicator of economic growth. The logic was simple – the more we produce, the more energy we must need.

Not anymore. Today, businesses throughout Ontario have embraced energy efficiency as a key to greater competitiveness. For them, using less energy actually powers new business opportunities.

Between 2011 and 2014, Save On Energy business programs saved 4,077 GWh of energy and 389 MW of demand in the province. With energy efficiency, businesses can realize substantial energy savings, but also improve their cost structures, processes and overall competitiveness. Some businesses see improved employee engagement, for others it means reinforcing ties with their community, and for others still, it translates into a better customer experience. And perhaps most of all, many value the opportunity to contribute to the health and well-being of their communities by using energy wisely.

To help businesses continue to move forward toward greater efficiency and competitiveness, the province has introduced a new approach that puts energy efficiency ahead of all other supply options. This approach, “Conservation First”, is designed to take us to the next level of energy savings.

With ambitious new energy reduction targets in place, the bar is set higher now than it’s ever been. Save On Energy programs delivered by local electric utilities have been re-designed to ensure that, together, businesses can meet provincial goals while at the same time reaping the rewards of sound internal energy management practices. Looking ahead, there will be even greater opportunities for businesses to reduce their overhead through retrofits, energy audits, lighting and equipment upgrades.

This publication will help you find ways to take advantage of the many benefits of using energy wisely. In reading about different approaches to energy management, and business leaders’ determination to turn great ideas into great results, perhaps you’ll find the inspiration to do the same. To find out more about what energy efficiency can do for your business, visit saveonenergy.ca or contact your local electric utility (ieso.ca/findutility).

Terry Young Vice-President, Conservation and Corporate Relations Independent Electricity System Operator

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PANELISTS

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12 1 Chih-Ting Lo, Principal, EELO Solutions, Vancouver.

2 Nick Dalziel, Engineering Director, CLEAResult, Toronto.

3 Matthew Curtis, Energy Management Coordinator, Goldcorp, Red Lake, ON. 4 Dale Fitzgerald, Business Manager, IESO, Toronto.

5 Jana Jamnicky, Project Engineer, Cameco, Port Hope, ON. 6 Bill Scott, CDM Technical Energy Consultant, Toronto Hydro.

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7 Michael Kobzar, Regional Sales Manager, Siemens Canada, Toronto.

8 Stephen Power, Partner, Advisory Services, Ernst & Young, Toronto.

9 David Willick, Regional Leader, GE Mining, Mississauga, ON. 10 Emily Thorn Corthay, Senior Consultant, Energy Management, Hatch, Mississauga, ON. 11 Benoit Barbalat, Solution Sales Engineer, Schneider Electric, Mississauga, ON. 1 2 Jon Feldman, Engineering Lead, Industrial, IESO, Toronto.

13 Russell Noble, Editor, Canadian Mining Journal, Toronto.

14 Robert Seagraves, Publisher, Canadian Mining Journal, Toronto.

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WATTS HAPPENING

A SPECIAL REPORT

BASED ON A ROUNDTABLE DISCUSSION INVOLVING

TOP INDUSTRY PROFESSIONALS

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A look at Energy Efficiency and The Mining Industry

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ext to the staggering costs associated with developing and staffing a mine, maintaining an infrastructure to keep a mine operating efficiently,

Jon Feldman, Engineering Lead, Industrial, IESO, Toronto

and most of all, profitably, is a huge undertaking.

In fact, aside from the initial capital outlay of breaking ground, the top two costs of operating a mine are labour and energy. It takes significant resources and expertise to help ensure the entire mining operation performs efficiently and costeffectively.

In other words, Energy Management is everyone’s responsibility. Even a seemingly little thing like turning off a light after leaving a room can help improve the bottom line. It’s an easy task, but a hard lesson to teach.

However, thanks to an Energy Management program designed by IESO (Independent Electricity System Operator) of Ontario, the mining industry now has answers to critical questions; questions specifically pertaining to everything from energy audits, to formal energy management programs, and executive involvement, to an awareness and understanding of incentives and efforts to reduce energy consumption.

Monitoring and reporting of electrical consumption at a mine can often be neglected, and because of that, it’s every mine owner and operator’s responsibility to monitor their usage and identify opportunities to reduce consumption.

All mines understand that the wholesale price of electricity is combined with the Global Adjustment to form the total commodity price.

Once that is understood, reducing waste and using electricity more efficiently should become a priority.With that in mind, Canadian Mining Journal, along with support from IESO, recently conducted a roundtable to discuss the challenges, obstacles, strategies, perceptions and attitudes towards implementing Energy Management programs within the Canadian Mining Industry.

With a panel of 12 people representing a true cross-section of miners, including representatives from mining companies involved in energy and suppliers to the mining industry, the half-day

session started with a quick look at an “Energy Efficiency in Business & Industry” survey conducted

by Annex Business Media and Northstar Research.

Surprisingly, the panelists learned that overall, the majority of the 510 companies surveyed had not yet taken measures to increase energy efficiency at their operations “because of a lack of staff or resources” and that 60 per cent of the respondents added that their companies are not planning to do so in the future.

Armed with this disturbing information, the panel discussions began on the topic of energy managers and whether mining companies in Ontario do, in fact, have energy managers?

Jon Feldman, Engineering Lead for the Industrial Conservation Performance division of IESO, was first to respond by saying: “Up until June 23, 2015, we (IESO) did not have funding for energy managers for the transmission-connected folks, but we did have for distribution-connected.

“But we are very encouraged,” said Feldman, “that we do now have funding for energy managers, and that more companies that don’t have one, or haven’t really participated in the program before, have applied for one.”

Cheryl Brownlee, Executive Assistant to the President of the Ontario Mining Association, added that the OMA is also helping coordinate an energy committee and that most of the people on that committee, whether they are energy managers or not, are involved with energy management, and that the majority of the major mining companies in the province are represented on the energy committee.

One of those on the panel representing a mining company was Matthew Curtis, Energy Management Coordinator from Goldcorp’s, Red Lake Gold Mine, who said his company started off with “only myself” in energy management but now Goldcorp is going to be full IESO by the end of next year, and that the

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We are very encouraged that we do now have funding for energy managers, and that more companies that don’t have one, or haven’t really participated in the program before, have applied for one.

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You can’t manage what you can‘t measure – David Willick Regional Leader, GE Mining, Mississauga, ON

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Even though we’re not a mining company per se, we’re a mining supplier, and being a large global company with a lot of manufacturing facilities, we set out on a path of energy efficiency 10 years ago.

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company’s intention is to actually take advantage of the funding from the IESO’s Energy Manager program.

David Willick, Regional Leader, North America, for GE Mining, said: “Even though we’re not a mining company per se, we’re a mining supplier, and being a large global company with a lot of manufacturing facilities, we set out on a path of energy efficiency 10 years ago and over the course of the last 10 years, we’ve done over 260 energy audits and we’ve now quantified the savings at $350 million in our own facilities.”

Energy management works for GE Mining, and Benoit Barbalat, Solution Sales Engineer, Energy and Sustainability Services, for Schneider Electric, agreed when he said, “We’ve had corporate programs at Schneider in place for all of our offices around the world to manage the energy.”

He says that managing energy is important, but something else he sees on the industrial side is the need for meters. “It’s absolutely a priority.”

And IESO agrees as it recently demonstrated by extending its Industrial Accelerator Program (IAP) to December 31, 2020, to provide financial incentives to eligible companies to encourage investment in process changes and equipment retrofits, including meters.

Dale Fitzgerald, IESO’s Business Manager for the IAP, says the new program is an energy-manager initiative that requires companies to hire a full-time dedicated energy management person.

When that person is in place, Fitzgerald said IESO issues $50,000 in initial, non-refundable funding, and then, once the energy manager starts working and starts submitting reports on the progress they’re making, a technical reviewer does an analysis of the energy savings.

Companies have to meet a 2000 megawatt-hour minimum target per year, and based on the energy savings that were achieved in that year, Fitzgerald says, “We pay $40.00 per megawatt hour so companies can achieve up to $200,000 a year.”

Metering

As mentioned earlier, the Process and Systems Initiative under IAP provides funding for Engineering Studies to investigate efficiency opportunities and capital funding for investing in those equipment upgrades and process changes.

Metering is an eligible cost under that initiative.

Emily Thorn Corthay, Senior Consultant, Energy Management, Hatch Management Consulting, warned, however, that before putting “in a ton of metering,” companies should do a proper study to understand where their metering is most beneficial.

“Sometimes you can use one meter to actually measure a few different things, and there’s lots of ways you can do that, but the bottom line is you do

EMILY THORN CORTHAY, HATCH MANAGEMENT CONSULTING

the study, and then the implementation funding.”

Matthew Curtis from Goldcorp said, “At Red Lake Gold Mines we have metering on all of our incoming lines. Our Red Lake site has two mills, two massive mills, plus five head frames, and each one of those is metered.”

In keeping with the overall conversation of energy management and the growing importance of metering, Emily Thorn Corthay from Hatch hit it on the head when she said, “You can’t manage what you can’t measure.”

And Matthew Curtis gave an example of this from his underground mining experience at Red Lake.

He said that an underground mine has stopes and raises which is basically a big vertical shaft, and for one installation, they needed more air that required the installation of another 1000 horsepower of auxiliary fans.

“Knowing this, we went ahead and did an entire energy management plan so instead of installing a 1000 horsepower of fans, we used an old Alimak brace with moveable dampers and a 200 horsepower fan that went down to a further level to get the same effect, said Curtis.

“That’s a perfect example,” said IESO’s Dale Fitzgerald, “of why I think in mining, as much as you need metering, you also need people to understand mining, because you have to develop theoretical baselines when it comes to measurement and verification for energy savings projects. A mine’s energy consumption is often continually growing, so we work with each company to determine what the energy savings are for a project even if there isn’t an overall reduction in consumption.”

However, understanding the M&V side of planning is very important, as IESO’s Jon Feldman, added by saying, “There are two things around measurement and verification that I think are helpful. First of all, and the basis for M&V, what is the energy I would have used given the same circumstances? So, if you’re adding a new production line, or you’re digging deeper, you require more ventilation, and if you didn’t have the energy efficiency, you would have used more energy.”

In other words, Feldman said it’s not, “Has my electricity bill reduced, but have I avoided energy costs that I would have had.”

Concluding that meters are playing an increasingly important role in gathering information on energy consumption, Chih-Ting Lo, a Principal with EELO Solutions, Practical Energy Management, and who is the lead energy manager at Barrick Hemlo Mine, said that meters are being installed with good intentions but getting the data out often isn’t that easy.

Bill Scott, a Technical Energy Consultant with

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Image: Pavel Yakovenko_Thinkstock

Toronto Hydro, said, “That’s what we’re seeing in mining companies. Smart meters in the industry have created a whole bunch of data, but that value of it hasn’t really been unlocked in terms of it being able to do predictive analytics.”

Emily Thorn Corthay responded by saying, “If you had an energy management information system in place that brought in all the data from all of your metering, and there’s lots of them that exist out in the market, then you can set threshold and alarm levels.”

Data Analytics

Michael Kobzar, Regional Sales Manager, Siemens Canada, said, “On the data topic, Siemens spends an enormous amount of energy around data analytics and, at first, based on making our own equipment much more efficient or lowering our operating costs, which is the same as what mining companies are trying to do. We started off with a pilot of 10 or 15 data scientists providing data analytics available. The requests for information were absolutely phenomenal, so now we have 2,000 data scientists on staff that are just looking at energy-related data and doing predictive analytics.”

As an example of using data and making relationships between variables that are not obvious, Kobzar said, “We have a wind farm on Manitoulin Island that we’ve gathered many algorithms on how the wind blows across the island. And, based on the wind blowing, we can adjust the pitch and the orientation of the blades to capture the maximum amount of energy from the wind. And it’s all done through algorithms that all rotate and adjust automatically. There’s no human intervention whatsoever to maximize power flow.

We see this as an enormous future growth now that the data is available and we can start utilizing it more effectively.”

“From a maintenance perspective, this is where it hits home for the mining companies. We do

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our own maintenance. We have maintenance contracts, and we saw a significant trend with engines requiring significantly more maintenance than others, so we used data analytics to determine why, and once we figured out why, we were able to fix the problem and ultimately, save energy and costs.”

Energy Efficiencies

And speaking further about saving energy and reducing costs, panelists were asked what part of the process of operating a mine consumes the most energy and where can you find the most energy efficiencies?

Matthew Curtis was the first to respond by saying, “Ventilation and compressors are a big one. We did an audit of our Red Lake site and we ended up finding that between our shifts, when nobody’s underground, we’re running at three megawatts.

Our compressor is running because of leaks, which hence, actually started our leak-demand program underground. And, again, like we all know here in Michael Kobzar Regional Sales Manager, Siemens Canada, Toronto

From a maintenance perspective, we saw a significant trend with engines requiring significantly more maintenance than others, and once we figured out why, we were able to fix the problem and ultimately, save energy and costs.”

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Energy Efficiency and Mining 7

A look at Energy Efficiency and The Mining Industry Matthew Curtis, Energy Management Coordinator, Goldcorp, Red Lake, ON

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We did an entire energy management plan so instead of installing a 1000 horsepower of fans, we used a 200 horsepower fan that went down to a further level to get the same effect.

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mining, ventilation is another one. We just started a program between shifts where we dialled down our ventilation on surface through automation. We dial them down by 30 per cent between 3:30 p.m. to 5 p.m., so we still have time for blast clearing at the same time nobody’s underground. Because we blast twice a day, ventilation and compressed air are the biggest expenses for us.”

Curtis continued by saying, “You know there’s one key point that I’d like to make. All of us here are professionals, and we understand about energysaving projects and initiatives, but the biggest hurdle for energy managers is that of the culture change for the people. Again, I’m going to go back to the example of our 30 per cent in reduction in the ventilation. As soon as we brought it out, hands in the air, ‘End of the world, oh my God! The guys are going to go underground. They’re not going to be free of the blast air, it’s not going to be cleared.’

Big issues.”

His team put together a significant change management program involving PowerPoint presentations, town hall meetings and numerous conversations with staff. They explained to employees how wet bulb values for the temperature would go up about five degrees, but only during shut-off and when nobody is underground. By the

8%

Executive mandate/request Internal staff Building owner Industry association Customers or suppliers Other

“We alleviated all those issues and a lot of those problems and then eventually the culture change happened and people accepted it. But we actually had to do it in stages. We ended up doing it the first two weeks; 10 per cent reduction, the next two weeks; 20 per cent reduction, and in the final two weeks; 30 per cent, that’s it. And then we indicated if anyone has any issues, any problems, you see anything, let us know. There were no issues, no problems.”

In keeping with this focus on being alert for any potential energy-related issues, Curtis explained that “One thing I did on my budget this year, was I put money aside for an energy contest, and what we’ve done for the work force (and it’s just for the hourly employees, and non-supervisory staff) is, every month we do a draw for an energy idea or an energy action. With an energy idea, you’ll get some knickknacks, you know, something like a

16% 14%

Corporate sustainability program

Equipment/machinery problems

Cultural Changes

49%

Cost savings Incentives or audit funding program

Part of certificate (eg. ISO)

time the staff go underground, no impact would be felt, he explained.

“Then they asked about early entry? What if the guys go to early entry in the shops? They’re right by the shaft station, you have natural flow. You have enough for whatever you have to do.

4% 2% 2% 1% 1% 1% 2%

Motivations Half of those respondents whose companies did conduct an energy audit identify “cost savings” as the motivating factor, followed by incentives and funding programs.

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Jana Jamnicky Project Engineer, Cameco, Port Hope, ON

little flashlight, stuff like that. For the energy action, however, which has to be verified by a Supervisor, an example is; Balmer Creek Lodge, which is where our fly in/fly out people stay, one of the gentlemen went in there and the gym has everything on -- the TVs are on, lights are on, and it’s been on forever.

So he goes in there and every day, he starts to turn this stuff off, right? [He’s] thinking while he’s not really doing much, but he is, it’s the culture change.

So, we identified that and said, “Hey, that’s an energy action, you’re going to go in the draw this month and you’re gonna win a prize.” And what we have done is we base the prizes on the area we’re in. We’re up in the middle of nowhere, we’re 3,000 km from Toronto. So, obviously, fishing, hunting and outdoor activities. We have fishing poles, St. Croix rods, hunting equipment, stuff like that. The guy goes into a draw and he wins a fishing rod and a line and jigs. And the guy was just happy.That guy is going to continue to do his energy actions. And the first thing he said was, “I’m going to tell everybody.

I didn’t know that I could actually get something.”

So that’s what we’ve started now in Red Lake. It’s getting traction as people start to know it. And

I’m hoping next year, it’s going to be even better because it’s going to be throughout the mine site.

Waste Management

Jana Jamnicky, Project Engineer for Engineering and Maintenance at Cameco added that, “In my company, we have a program called ‘Waste Management’ where every employee is asked to come up with some waste management idea and implement it as well. At the end of the year there’s a winner, and this year that person gets an iPhone.

It can be very simple ideas just like putting a little label on a switch, you know, “switch off.”

Chih-Ting Lo, said, “(At Hemlo), we promote cost savings in general, not just for energy, and we do a lot of workshops, workshops that result in people going around and doing a lot of different things. It’s all about the culture change. People have to see that cost saving is a benefit for everybody, and that makes a huge difference for the operation and the bottom line.”

Once again Matthew Curtis talked about his operation at Red Lake where he said, “We currently have a Vice-president who is really energy-focused

83%

Electricity

56%

Natural gas

40% 33%

Water Fuel/diesel Air Steam Biomass/waste material No areas Other

11% 9% 9% 8% 3%

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In my company, we have a program called ‘Waste Management’ where every employee is asked to come up with some waste management idea. It can be very simple ideas just like putting a little label on a switch, you know, “switch off.

Energy Tracking

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Electricity (83%) natural gas (56%) and water (40%) top the list of resources whose consumption is tracked at respondents’ companies.

Respondents reported their companies track energy consumption in the following areas of operation most frequently: lighting (49%), vehicles/fleets (32%) and machinery (high load motors/equipment) (30%).

49%

Lighting

32% 30% 27% 26% 24% 21% 21%

Vehicles/fleets Machinery – high load motors/equipment Compressors Water/wastewater Chillers/air conditioning Ventilation/fans Machinery – low load motors/equipment

12% 7% 5% 2% 21%

IT/servers Plug loads Grinding/blasting Mineral processing No areas

9%

Other

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A look at Energy Efficiency and The Mining Industry Chih-Ting Lo Principal, EELO Solutions, Vancouver

right now, to get everyone involved in energy management, he’s showing them the money… the money that’s being wasted. We have what’s called peak demand protocols showing the cost for production and I’ve noticed specifically, the more information I keep pumping out over and over, the more support we get. And, again, the biggest thing with the managers and the upper management is, as long as you give them the information, the more support you get.”

Energy Management

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We promote cost savings in general, not just for energy, and we do a lot of workshops, workshops that result in people going around and doing a lot of different things.

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Chih-Ting Lo added, “It’s about aligning the energy initiative with what’s also important to the management team because it goes into their cost savings requirements that they have to deliver.

They know what’s important to them, so if you can relate to them on the right things that they do, certainly, it will help with implementing an energy management program.”

Jon Feldman, of IESO, “I’d like to comment about the staff who are asked to change their behaviours.

You have to make it real to them to. So what’s in it for them? And the example of describing the benefit in the number of days mucking that would then be avoided. Those are the things that staff can understand. Because you say, ‘We’re going to save 3 per cent off the cost per ounce,’ that’s not really hitting home with them, but if you told them their job’s going to get easier, or they’re going to, have extra free time here, or something that they can relate to, it goes a long way to helping them get on board for the change, too.”

Getting the message across to staff is something Jana Jamnicky said she was very familiar with because, “I know when I started with Port Hope Conversion, Cameco went through reducing the amount of people working in the plant because the economy was very tough and it’s still pretty tough.

And, so the only way I tried to explain it to people was, ‘Hey, you need to reduce the operational costs, because when it comes to the time when the company has to act on the economy, the easiest way is to reduce the number of people.’

So, if we can reduce operational costs, we can save the people’s positions, rather than go to those measures. I find out it kind of resonates with the people, all of a sudden, “Oh. Maybe, I’m more secure if I start to take care how I approach using energy.”

“And, especially in mining,” said Matthew Curtis, “they want to care about that environmental stewardship, but often they don’t feel like that’s necessarily aligned with their day-to-day job. And I think some of the things we’re talking about here actually are. Like, here’s what you need to do, and we’re going to maybe justify this on lowering costs. But that also extends mine life, and that’s bringing what you want to be doing and how you want to feel about your job and your employer into alignment. Because, to just focus and try to justify things on the environmental pillar, you’re not going to get very far. Until you operationalize that into how is that good for the company and good for your job.”

Self-funded Projects

Benoit Barbalat spoke from a non-mining perspective by saying that energy projects have to be self-funded. “They have to make sense financially from day one. They cannot have even a one-year payback, and a two-year payback is too long. If it’s energy it should be self-funded.

“We are in the business of making parts or producing something, we’re not in the business of making energy.” That’s a shift I see and it’s really problematic. “Hey, you want to invest in those meters, you want to invest in an energy management program.”

Emily Thorn Corthay said she thinks it depends on the company. “There are some companies contributing to the community, but if that company is not investing in the community and doing the right thing environmentally, they are actually going to pollute the community where everybody lives and works. So, I think that, again, some companies don’t care and it’s all about finances. But I’ve definitely seen, and it includes in the mining sector,

Benoit Barbalat Solution Sales Engineer, Schneider Electric, Mississauga, ON

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We are in the business of making parts or producing something, we’re not in the business of making energy.

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Nick Dalziel Engineering Director, CLEAResult, Toronto

some leading companies where the corporate social responsibility is actually a key driver. So I think it depends on the company.”

Continuing along the topic of corporate social responsibility, Chih-Ting Lo said she thinks CSR is definitely very, very critical, especially from mines, because a lot of them are in remote communities.

“We have what we call five communities of interest, two First Nations, and three communities that don’t fully rely on the mine, but basically there aren’t really very many things around. So, we certainly do a lot to address that, whether that directly relates to energy projects, that’s a different story. There are different things about communities other than energy. But I would say the message is: Let’s not talk about an energy project. Let’s talk about a project that really benefits the company as a whole. And that can be energy and that can be related to energy and that’s what we try to push.

But it’s not an energy project. If you say, ‘Well, my job is to put in a VFD,’ that is not a job. My job is to help you make the same ounce of gold cheaper, then that is my job. That is the job that they understand that I do, which benefits the company.”

Nick Dalziel , Engineering Director, CLEAResults, backtracked a little on the topic of CSR to referring to what Matthew Curtis said earlier about getting employees engaged. “I liked what you said, Matthew, you’d mentioned talking to the folks at

the mine and the repetitive message. I’ve seen a lot of energy managers that can’t understand why people aren’t listening. Like, ‘I told them to do this…’ The reality is it’s a psychological step.

The average person needs to be told something five times before they understand it, or before they’ll remember it. So, a very important statistic to keep in mind in terms of employee engagement, employee awareness, is if you feel like you’re just repeating yourself, you probably are and you probably need to. You could try different messages, different media, for sure, but I think that’s a really good point and an important point that you made.

You’re not just uselessly repeating yourself; there’s a need to reinforce the message.”

Matthew Curtis responded by saying, “The thing is the face time. The thing is a lot of energy managers lose the face time because you get into the kind of a lull of, I run an office, I do reports, I send stuff to, you know, all the people that’s going to give me free money and I’ve got to send reports to them. And I’m going to hang out in my office all day. That’s where you lose a lot of your traction.

You lose a lot of your credibility. If people don’t see you in the field, they don’t know who you are.

They don’t know what you’re going to do. They’re not going to trust you just because you say things.

So, again like Chih-Ting, she does the same thing I do. You go to the huddle meetings, I think, as we

Water usage vehicles/fleet Upgraded yo higher efficiency machinery/equipment Energy audit Reduced demand on equipment Staff training or support Installed variable frequency drives (VFD) Right sized equipment Air usage Ugraded to other high efficiency building systems Installed energy meters & tracking systems Heat recovery /stack improvements Alternate fuels or fuel reduction Steam usage Production scheduling Installed combined heat & power systems Process integration Other No changes

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54%

Electricity usage

40%

Upgraded to high efficiency facility lighting Natural gas usage

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I’ve seen a lot of energy managers that can’t understand why people aren’t listening.

The average person needs to be told something five times before they understand it, or before they’ll remember it.

28% 26% 24% 21% 21% 18% 18% 17% 13% 13% 11% 10% 10% 8% 7% 7% 5% 2% 4% 9%

Energy Efficiency Projects 54% of companies focused on reducing “electricity usage” in the past five years, while “upgraded to high efficiency lighting” was cited as second most important at 40%.

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A look at Energy Efficiency and The Mining Industry Dale Fitzgerald Business Manager, IESO, Toronto

say huddle meetings this morning and say [our piece]. And since we have over 1,500 people on site, I can’t make every huddle meeting. So to make every huddle meeting of the entire mine site takes me two three months. That’s to reach everybody.

And cross shifts. But you’ve got to do it. You’ve got to go one meeting at six o’clock, talk to the guys.

Talk about what’s important that day, repeat stuff that we already went through. And, as long as you have that, you get the effectiveness. I think that’s one key element that kind of gets left out.”

Working with Suppliers

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There’s a lot of opportunity for suppliers and third-party consultants to help out the mines and then the energy management people that you’re working with.

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Dale Fitzgerald responded that he thought “there’s a lot of opportunity for suppliers and third-party consultants to help out the mines and the energy management people that you’re working with.

We have dedicated IESO employees who support vendors and suppliers in learning about our programs, how to apply on behalf of a customer and assist a customer with applications to our programs. We call vendors and suppliers our channel partners because they are vitally important in reaching out to the customer about the benefits of energy efficiency and our incentive programs.”

Fitzgerald continued to explain that if a company does a study at a mine, it’s fully funded by IESO, “unless you do a preliminary engineering study, which is up to $20,000, and then if a vendor helps to install the equipment, it can be included in the cost of the project.”

And Jana Jamnicky added, “Definitely those programs help to bring the consultant in and do the audits and take the benefits. We’ve just done

recently a steam traps audit, but initially no one really had a clue about how many traps were around? We eventually discovered we had 1,000 taps so we did the inventory and figured it out that 50 per cent of them failed.”

Dale Fitzgerald talked a little more about the Industrial Accelerator Program. He says some of the energy managers don’t have the on-the-ground resources or face time with operations to get the support they need to be more effective. Many have ‘nominal’ energy teams but these are somewhat informal and it can be difficult to translate these conversations into action. He’d like to see the role of energy manager grow to a point where it isn’t as isolated. Energy managers are already working on that, “but ultimately you are making the value proposition of how you’re helping them do their jobs better, aligning these tasks with their roles and you’re able to delegate and then get really meaningful contributions from your energy teams.”

“You need CEO leadership,” said GE Mining’s David Willick, who continued by saying, “We started this program at GE 10 years ago and our CEO at the time said, “Okay, we’re going to cut greenhouse gas emissions by 25 per cent, we’re going to cut water use by 25 per cent, and we’re going to cut electrical energy use by 30 per cent.

We don’t know how we’re going to do it, but we’re going to do it.” And then everybody scrambled to figure out a way and we exceeded those cuts on every single count. So now at the 10th anniversary we said, ‘Okay, we’re going to do it again.’ But now there are new programs to cut another significant

72%

Cost savings Environmental goals Government & utility financial incentive programs Competitive positioning Corporate social responsibility/sustainability program & goals Create a greener product Regulatory compliance Individual leadership/legacy of key executive(s) Employee morale/retention Shareholder/investor influence Reporting requirements Risk mitigation Community pressure/community relations There are no motivations to invest in energy efficiency at my company Don’t know Other

26% 25% 21% 20% 15% 12% 12% 9% 8% 5% 4% 4% 7% 7% 7%

Investment Drivers The primary driver to invest in energy efficiency solutions is “cost savings” (72%).

“Environmental goals” falls into second at 26%.

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double-digit percentage in the next 10 years. So, it’s that constant challenge, but it’s led from the top and it really has to be part of that culture.”

An Energy Strategy

Matthew Curtis agreed and said that at Goldcorp, “we have a corporate energy strategy which aligns all of the percentages we need to achieve. And I think the other factor you have to consider for energy managers is the people factor. A lot of times we (energy managers) are there because sometimes you have to be a bulldog and sometimes you have to be Type ‘A’ personality.

And, again, I like what’s being said about having the support for a lot of people that don’t have those attributes.”

Hatch’s Emily Thorn Corthay added, “Sometimes, bizarrely, within your own internal organization people may not listen to just you, or they might not listen to just a consultant, but if you have two people, a vendor or whatever, you have multiple people, and you have that outside perspective, saying, ‘Hey, yes, you know, your energy manager is absolutely correct and this absolutely needs to be done.’ Sometimes that helps provide the push that will actually get the support needed.”

Toronto Hydro’s Bill Scott agreed by saying, “That push from the top is extremely important.

David Willick from GE mentioned earlier about that 25 per cent goal. I’ve been with large multinationals sitting in their corporate offices where they’ve come out and said, ‘We have to reduce 15 per cent this year.’ It came right from the top, great discussion for an hour and a half, but then, somebody whispers over, ‘And it’s got to be less than a one-year payback.’ I basically say, ‘Well, thanks for wasting an hour and a half of my life. If you want to change something that’s production-

related, you’ve got to have everybody on side, because the person that’s involved with that production line isn’t terribly risk-averse.’”

Near the end of the two-hour roundtable discussions, Moderator Robert Seagraves, Publisher of Canadian Mining Journal, asked about Alternative Energy and whether it’s a valid topic for the mining industry?

Matthew Curtis responded immediately by saying, “It goes back to your return on investment.

The return on investment for renewable projects is just so long. At Goldcorp, for example, I’m pushing for solar installation on our Cochenour Water Treatment Plant, and the reason why is, I think I mentioned before, that it’s going to be there for the next 25 years so my business case is now based on 25 years, not a 3-year plan.”

Chih-Ting Lo said, “I would say it goes down to whether it makes sense or not. One of our projects is on a transmission-connected line. We are adjacent to a highway, so for us to get away and say we want to build a renewable energy project, it’s not really a very reasonable idea. That being said, some other mines in Central or South America that have really good renewable resources, and are off the grid, and have to truck in fuel, then there there’s an opportunity. Certainly for mining it is important if you look at the cost of generation in those places.”

Stephen Power from Ernst & Young added that because, “The technology is improving significantly, and I think every year that goes by, it gets better and better, whether it’s solar, or wind, energy storage, or the integrated system approach that is coming our way.”

“And the wind turbines,” said David Willick, “that we just modified to capture an additional 25 per cent more power out of the same turbine by just putting a couple of things else on it and proving that

32% 29% 29%

Barriers to Investment

Bill Scott CDM Technical Energy Consultant, Toronto Hydro

“

If you want to change something that’s productionrelated, you’ve got to have everybody on side.

”

Lack of capital budget or financing Lack of budget Low rate of ROI

21% 20% 20%

The primary barrier to investing in energy efficiency at these companies is “lack of capital budget or financing” (32%), followed by “lack of budget” (29%) and “low rate of ROI” (29%).

Not an executive priority Lack of staff/internal resources Don’t have an energy efficiency plan

8% 8% 7% 11% 9% 3%

Don’t know what area to focus on Unsure where to get help Don’t know where to find energy efficient solutions No barriers Don’t know Other

Energy Efficiency and Mining 13

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A look at Energy Efficiency and The Mining Industry Stephen Power Partner, Advisory Services, Ernst & Young, Toronto

“

The technology is improving significantly, and I think every year that goes by, it gets better and better, whether it’s solar, or wind, energy storage, or the integrated system approach that is coming our way.

”

not only is the technology on solar improving, but now all of a sudden, just like extending the mine life, now some of these wind turbines that can generate more power, and have a threshold for a lower wind regime to generate the same amount of power.”

Emily Thorn Corthay said that Hatch has a large renewable energy group that focuses on renewable energy in mines and, “We certainly know it’s coming and in remote areas for sure.”

“When you look at progressive provinces, and some are really contributing heavily towards subsidizing renewable energy projects, then they’re not economically viable, but those provinces understand that if they can subsidize them to make them viable, then there’s going to be learnings associated with that. They’re going to push the technology and then it will become more viable, said Stephen Power.

“I think there’s no silver bullet here,” said ChihTing Lo, “But if we want to look at the large users of energy, it’s the comminution. It’s where they’re grinding, the typical use is about 50 per cent of your mill, there’s the ventilation which uses, could be 50 per cent of the underground power, there’s the associated activities of moving things around with conveyors and pumps, and the ventilation and all that kind of stuff. They’re definitely the biggest opportunity for savings. They’re definitely the biggest opportunity of users, so, you focus on them to say, okay, well, how can I make some incremental improvement or step change on those big users? Understanding your baseline and understanding where you’re using the most energy and focusing on those aspects to see if there is an opportunity to save, or not, is where it all starts… and ends.

W

e hope this discussion has given the industry a lot to ponder as you grapple with the increase in energy prices versus the spreadsheet demand to lower said costs.

The need to benchmark results is crucial to measuring the efficiency of your

operations. The unique challenge for hard-rock mining is that those benchmarks change with every metre in depth. The deeper you go, the more energy you have to expend, not to mention that the rock is harder too, so even more energy is needed. Unlike the supply-chain side of the industry, nothing is fixed. But the desire and need is there. As Ms. Jamnicky of Cameco alluded to, it has become a matter of saving jobs by reducing energy costs. This is helping prompt a culture change amongst all employees. The writing is on the wall: It is time to take energy management seriously.

Those of you reading who have not taken advantage of the incentives offered by the IESO are strongly encouraged to visit them at www.saveonenergy.ca. Based on the evidence heard here, there are strong incentives to start the process by hiring a dedicated Energy Manager now.

Emily Thorn Corthay Senior Consultant, Energy, Hatch, Mississauga, ON

“

Hatch has a large renewable energy group that focuses on renewable energy in mines and, we certainly know it’s coming and in remote areas for sure.

”

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POWERFUL INCENTIVES

T

here are many reasons to focus on upgrading or modernizing systems for energy efficiency, ranging from reduced operating costs and increased sales to improved employee comfort and effectiveness. Fortunately, there are also incentives available as well as non-financial tools and resources.

In Ontario, these incentives and resources can be accessed through the Save On Energy program (for distribution-connected businesses) and the Industrial Accelerator Program (IAP), for transmission-connected customers.

The IAP is designed to assist eligible transmission connected companies to fast-track capital investment in major energy projects conservation projects. Both the IAP and Save On Energy facilitate retrofits, energy managers and other conservation projects.

Program

Industrial Accelerator Program (IAP)

Retrofits PRESCRIPTIVE TRACK: Provides the

ease of selecting from a defined

list of end-use measures that come

with a corresponding per-unit

incentive.

ENGINEERED TRACK: A series of

pre-set calculation worksheets that

help estimate the reduction of

electricity consumption through

more energy-efficient equipment.

CUSTOM TRACK: Available for

more complex or innovative

solutions not covered in the

prescriptive or engineered tracks.

New construction The High Performance New

Construction (HPNC) initiative

financial incentives for facilities

that exceed typical electricity

efficiency standards.

Process and systems • Detailed engineering study

• Preliminary engineering study • Energy Manager program (New)

Process and Systems applications

can involve capital investments for

a single project, a small capital

project, a portfolio of projects, or a

self-generation project.

Save On Energy PRESCRIPTIVE TRACK: Ideal for

quick system upgrades.

ENGINEERED TRACK: For more complex equipment upgrades; provides the potential for higher incentives.

CUSTOM TRACK: Designed to provide flexibility for more comprehensive projects with opportunities for increased energy savings. Incentives are based on energy savings over pre-project baselines.

The High Performance New Construction initiative provides design assistance and incentives for building owners and planners who design and implement energy efficient equipment within their new space.

• • • • •

Capital incentives Energy Managers Engineering studies Opportunity accelerator Monitoring and targeting

saveONenergy.ca

BRING IDEAS TO REALITY

FOR MORE INFORMATION ON THE ABOVE PROGRAMS VISIT

www.industrialaccelerator.ca OR saveONenergy.ca Energy Efficiency and Mining 15

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Energy Managers Mean Business

Energy Managers are trained to find energy savings, make smart energy investments, boost their organization’s bottom-line and unleash competitive advantage. Can your business afford not to hire one?

Incentives through Save on Energy and Industrial Accelerator are available to help bring an energy manager into your workforce. Contact your local hydro company or the Independent Electricity System Operator (IESO) to see what programs are available in your area.

“The best part about being an energy manager is that I’m helping my company to stay competitive. The less energy we use, the more efficient we are.”

Behdad Bahrami, Energy Manager, Vision Extrusions Ltd

saveonenergy.ca

industrialaccelerator.ca

Subject to additional terms and conditions found at saveonenergy.ca.

Subject to change without notice. OM Official Mark of the Independent Electricity System Operator.

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