Renewable power management in mines: RECENT DEVELOPMENTS AND REMAINING BARRIERS

MELODIE MICHEL, Reporter, Energy and Mines

As 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 renewables 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.

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.”

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 operator 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.

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.

“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.