60-second interview: KRISHNAN RAJAGOPALAN The next stage for power hybrids

The economics of renewable energy for mines have never been more attractive, yet higher penetration still appears difficult to reach. Sterling and Wilson, a leading renewable solution provider, is working with miners in Australia and beyond to support the higher integration of renewable power in hybrids.

In this 60-second interview, Krishnan Rajagopalan, Head – Business Development, Hybrid & Energy Storage, Sterling and Wilson, shares his insights about why it is taking so long to reach critical mass for renewables in the mining sector, and which upcoming trends are likely to tip the balance.

Energy and Mines: Now that small-scale solar is well proven for miners, how can projects get to the next stage with high-penetration solar and battery storage?

Krishnan Rajagopalan: The current financials and the economics for miners who are operating on off-grid (diesel, HFO or gas-based) power generation systems, are proven to be viable. However, the effectiveness of battery storage for mining applications with respect to load side demand management when surges happen is yet to be demonstrated for larger data points. But the technology has matured to address this. We believe that as more installations happen in the off-grid space with solar and storage penetration, slowly the comfort for mining companies will increase to adopt large-scale solar and storage solutions. The current level of penetration with solar + storage with existing distributed generation (DG) is around 35 to 40% renewables, but if we are able to combine wind as well (with micro wind turbines), the renewable penetration can increase, displacing more diesel and CO2 emissions. Also, today most of these projects are funded by development finance institutions (DFIs) and a few IPPs. As commercial bank lending increases, the deployment of such projects will also increase.

E&M: How have the economics of battery storage improved — are the economics there for mining hybrids?

KR: Yes, battery pricing has substantially come down in the global market with the large-scale deployments happening in the electric vehicle market, as well as grid-scale batteries. This is expected to come down further. The current cost level of batteries, around US$200 to US$250/KwH (battery alone) needs to further go down to US$100 to US$150/KwH. The economics for the hybrid energy sources compared to an existing off-grid power plant operating on diesel are well established. The arbitrage is around US$10c/KwH, which is very compelling for customers to adopt hybrids.

E&M: Can you share some recent example of hybrid power plants including energy storage solutions that have applicability for miners?

KR: Some of the mines which have adapted these solutions are gold mines in Burkino Faso, mines in Mali, and mines in Western Australia. Agnew Mines has also installed a hybrid power project in its mine in Australia. Some of the large miners like RioTinto, Fortescue, and BHP have announced their targets to reduce carbon emissions by way of shifting to hybrid power sources. All these mining companies were operating on either diesel or gas. The hybrid systems have delivered more than 40% of renewable energy (clean green solar power) plus storage facility into their internal captive grid. This has reduced its power cost outflow by 30 to 40% yearly. This also provides a sustainability measure to all these miners who are constantly trying to reduce carbon emissions. More greenfield and operating mines have started looking at hybridization of solar, wind + storage technologies with their existing generation sources.