Energy and Mines Magazine Issue 23

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RENEWABLE ENERGY NOW ‘COMMERCIALLY SUPERIOR’ TO DIESEL

RENEWABLE POWER MANAGEMENT IN MINES:

Recent Developments and Remaining Barriers

Issue

23

August

2020

story

50% renewable

energy now ‘commercially superior’ to diesel MELODIE MICHEL Reporter, Energy and Mines

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Beach at Esperance WA 3

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here may still be a long way to go to achieve commercially viable 100% renewable energy projects for mines. But according to Dave Manning, Global Head of Hybrid at juwi Renewable Energies, recent projects have demonstrated that 50% renewable penetration is now easier than ever to reach, and makes better commercial sense than using 100% conventional power. juwi was one of the partners in Gold Fields’ landmark Agnew hybrid power plant, having delivered the 4 MW single axis tracking PV installation, as well as a cloud forecasting and a microgrid control system, which were completed in the project’s first stage, in August 2019.

At the beginning of this year, project developer EDL completed its second stage, adding 18 MW of wind capacity and a 4 MWh battery storage system to the plant. On average, the Agnew gold mine now runs on 50 to 60% renewable energy.

“The solar facility has been operating since September of last year and has met or exceeded generation forecasts. The full system, including wind and battery, has been operational as scheduled since Q1 2020 and the initial data shows performance as planned,” says Manning. To him, the Western Australian hybrid proves how far renewable energy and control technologies have come in terms of efficiency and economics. “Agnew demonstrates that 50% renewable energy with day and night-time power is now commercially superior to diesel, gas or grid-only solutions,” he adds.

The addition of wind allowed Agnew to push renewable energy generation into the night, dramatically increasing the amount of clean energy that could be used to power the mine. According to Manning, Gold Fields’ experience is likely to serve as a blueprint for future projects: “We see many mines where a combination of wind, solar and battery will deliver the lowest cash operating cost and the highest carbon emissions reductions. We are supporting several mines now by assessing their wind and solar conditions and designing a seamlessly integrated hybrid solution.”

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In fact, juwi recently signed a contract with Pacific Energy for its next wind, PV and battery hybrid project. The project is being built for Horizon Power in Esperance, Western Australia, and while it is not a mine site, Manning says it shares many of the characteristics of remote Australian mines.

Site-specific

When it comes to the optimal percentage of a mine’s operational energy needs that can be delivered by renewable energy, Manning warns that there is no one-size-fits-all solution. “The right number is really site-specific, and while you can deliver well above 90% of renewable energy today, this will not deliver the best cash operating costs and be unbalanced towards high CAPEX,” he says. Still, juwi’s analysis shows that the best commercial outcomes for Australian mines with life of mines of 10 years or more is somewhere between 6

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Photo courtesy Gold Fields

50% and 80% renewable energy. “The optimum renewable energy share has been increasing every year,” he adds.

50% renewable energy with day and night-time power is now commercially superior to diesel, gas or grid-only solutions

Naturally, the mining industry’s focus on uncompromising power reliability has led to slower take-up of renewables than in other sectors, such as energy. Still, Environmental, Social and Governance (ESG) considerations are becoming key in discussions with miners, and Manning has observed a tangible increase in studies, expressions of interest or full blown project tenders in the past year. “COVID-19 has slowed down construction schedules and keeps pushing out final investment decisions on many projects. This means that short7

We see many mines where a combination of wind, solar and battery will deliver the lowest cash operating cost and the highest carbon emissions reductions.

term project starts and completions are delayed, while mid-term project volumes are increasing,” he points out.

Additionally, he believes the trend is set to pick up pace now that more and more real-life projects are coming to fruition.

“We have been investing a lot of time to provide real life data and case studies to mining professionals to distinguish between noise and proven solutions. With these insights, mining executives are able to make their operation more reliable and profitable,” he notes.

But at the end of the day, the biggest argument in favour of renewable energy is that it is now, in many cases, more economical than diesel or gas. “ESG is relevant for renewable energy, but I feel that the main driver now is lower cost and technical maturity and reliability of wind, solar and batteries,” adds Manning.

Focus on Australia

In the past 12 months, juwi RE’s team has been busy with projects such as an off-grid mine in Western Australia with around 10 to 12 MW off-grid power need, where they plan to integrate a wind, PV, battery hybrid with a gas fired power station. The team has also worked on large grid-connected mines, with the installation of utility-scale PV systems to deliver the lowest cash operating cost. Other exciting opportunities shared by Manning include a mine in Africa with existing HFO genset fleet, which the team plans to hybridize with more than 30 MW of PV and battery capacity.

“I feel that Western Australia has led the way in hybrids for mines,” he says, “because of a combination or world class expertise, supporting policy framework such as ARENA funding, and a strong and dynamic mining community. This has enabled WA to remain at the forefront of innovation and led some years ago to our decision to expand our 8

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The right number is really site-specific, and while you can deliver well above 90% of renewable energy today, this will not deliver the best cash operating costs and be unbalanced towards high CAPEX

The Western Australian hybrid proves how far renewable energy and control technologies have come in terms of efficiency and economics DAVE MANNING Global Head of Hybrid, juwi Renewable Energies 10

operations from the eastern seaboard to WA.” juwi now has a team based in Perth delivering projects and working with key clients in WA. Still, Manning believes that the successes and experiences from Australia are transferrable and scalable and can be replicated in most locations globally, with Africa and Canada in particular following fast in Australia’s footsteps.

Integration is key

As renewable energy becomes a pillar in mine site energy systems, the growth of these technology is accelerating the existing drive toward fleet a nd p rocess electrification, enabling mines to operate without producing carbon emissions. This is leading juwi to focus particularly on integration. “This is why we have developed juwi Hybrid IQ. This mine-focused microgrid control system adapts to changing ore bodies and lowers cash operating costs with the best combination of wind, solar and storage in combination with fossil power stations. juwi Hybrid IQ is also ready to power electric fleet vehicles and provides data for process optimisations,” explains Manning.

The team has already conducted studies for mines that aim to achieve up to 100% renewable energy for their power needs, and identified commercial barriers at above 90% renewable energy. Still, Manning seems to believe these barriers can be taken down with the right amount of industry collaboration. He says: “Our ambition is to overcome even these barriers by working with mining experts to engineer solutions in mine design and process optimization with a mix of wind, solar and different storage technologies.”

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story

Renewable power management in mines: RECENT DEVELOPMENTS AND REMAINING BARRIERS MELODIE MICHEL Reporter, Energy and Mines

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s renewable generation and storage technology reaches maturity, the focus is on power management systems to push clean energy penetration rates higher and increase the overall efficiency and financial viability of projects. Energy and Mines catches up with Mohamed Mostafa, Head of Industrial Storage Solutions at SMA, to understand how these systems have evolved over recent years, and what is needed to take them to the next level.

According to Mostafa, the most recent developments in solar and battery technology have revolved around inverters and storage. On the inverter side, improvements are allowing for the integration of higher levels of renewables into a microgrid, without compromising on stability. He explains: “In the past, the intermittent nature of renewa14

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bles caused issues on the alternative current (AC) side for the generators, particularly in the context of mines’ weak grid connection or local energy generation. New control algorithms on the battery inverter side enables a higher renewable share in the microgrid system which were not possible before.”

At the same time, the declining price of storage, as well as improvements in safety and durability, and innovation in multiple battery chemistries, brought the levellized cost of energy (LCOE) for renewables-plus-storage solutions to a very competitive level. “Based on the goals of the customer on a specific site, you now have a range of competitive high-power, high-energy technologies. This is making economic calculations for any mining site much more convincing,” Mostafa notes.

Of course, every business case is different depending on specific site conditions, but the attractiveness of a project is mostly based on the current and forecasted price of diesel and gas, and the level of renewable penetration the clients aims to achieve. He points out: “Currently, renewable generation is even cheaper than the cheapest diesel or gas prices. However, you cannot typically consume all of the theoretical renewable generation you can have on a specific site. This means that if the load is e.g. 10 MW, and 2MWp solar is installed, all generated PV energy will be consumed. If however if you need to install 20 MWp of solar capacity, and place the over-generation into storage and increase the renewable share, this will work fine at this ratio. But after a certain ratio of energy penetration, the additional savings for each additional MW installed stops being linear, and the curve saturates.”

The most economically attractive ratio for mines can be found around 50% to 70% energy penetration, beyond which the amount of extra PV or wind equipment and storage capacity that needs to be installed makes the project unjustifiable both economically and environmentally.

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Importance of financial models Among remaining barriers to the adoption of renewables in the mining sector, Mostafa cites the lack of innovative financial models to support the CAPEX required. “Typically, mines would like to continue to pay monthly for their power, so they need the initial investment to be covered by someone else like banks, investors or IPPs. IPPs’ challenge is to combine know-how, trust in the technology and financial models,” he says.

Naturally, the more projects see the light of day, the more the economies of scale will apply to them, and as prices go down, so do investment margins. But Mostafa believes governments should provide support, not just in the form of funding, but by covering some of the risk perceived by investors. “People tend to add margins and risk factors for things they don’t really know,” he says. “The LCOE is the result of all costs, and if all of them are subject to higher margins, the overall project becomes less attractive.”

Need for standardisation Among its latest projects, SMA delivered the PV and battery inverters with advanced voltage source control for EDL’s Agnew Hybrid Renewable Project for Gold Fields’ Agnew Gold Mine in Australia. According to Mostafa, this landmark project proved not only that the control systems can be successfully implemented on a large-scale power project, but that renewable generation and advanced control of the storage inverter can actually be a stabilizing element, as opposed to what some may think. “The system acts as a back-up in case of generator failure, and can avoid blackouts,” he explains.

Working on this project also helped SMA realize that there is a need for the engineering sector to come up with some form of standardization for power control systems.

“There is still no standardized interfaces when it comes to microgrid management and control, so while a grid op18

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Photo courtesy SMA

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erator for grid connected applications will have a very clear protocol for communication, interface, deployment and functions, in microgrids we have to redefine big share of these things at each new project,” notes Mostafa. This lack of standardization places a heavier burden on the engineering team, and while some unions of engineers have started working on a common standard, efforts are still far from implementation.

Combining power sources The hottest questions around renewable integration for the mining sector usually revolve around whether 100% renewable penetration will one day be achievable technically and economically, and when. To this, Mostafa stresses the distinction between 100% renewables at a specific point in time, and 100% consistently over an extended period.

Based on the goals of the customer on a specific site, you now have a range of competitive high-power, high-energy technologies.

This is making economic calculations for any mining site much more convincing MOHAMED MOSTAFA Head of Industrial Storage Solutions SMA 20

“Technically speaking, running the load fully on renewables and storage is possible on an hourly basis, but in order to generate enough energy to do that every day of the year, covering the whole consumption of a site, wind and solar alone will not be enough — you would need way too much extra capacity,” he says.

Among the developments that could help push renewable penetration to higher thresholds, he suggests applying tracking to PV to flatten the curve, using hydrogen as a deferrable load and means of storage, and exploring the options to use biodiesel. “You could come up with innovative ideas to adjust the load to the renewable generation, which is not very common in the mining industry, or you can combine wind and solar with other sources of power, like biodiesel,” he adds.

Since the fundamental climate and geographical patterns that rule renewable sources of energy cannot be controlled, Mostafa suggests that new technologies may get miners towards 100%, but that balancing and financial innovation will probably remain a necessary exercise to cover the hardest carbon emissions to displace. “For the mining sector, we suggest a mix of renewable energy up to 70%, and covering the remaining 30% differently, bio-diesel or for instance with CO2 certificates,” he adds.

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