Achieving the Zero-Carbon Dream

Transitioning to zero-carbon mining is a global trend and Africa is no exception. African mining companies are committing to ambitious climate and decarbonisation goals which has created new urgency for integrating low-carbon technologies to meet these targets. Peter Drager, Head of Development - Hybrid and Offgrid - EMEA at juwi Renewable Energies, discusses key trends, projects and technologies contributing to the net-zero journey.

Peter Drager: The African continent is an interesting market in that it is made up of numerous countries with varying political structures and electrification strategies, so there is no one-size-fits-all approach. Each jurisdiction (or even each specific mine/location) has its own set of constraints and opportunities that require a specific technical and commercial approach, whether it be a grid-connected mine in South Africa or an off-grid mine in Egypt. A key consideration is the lack of maturity in local regulations around power generation, which limits the contracting options or adds uncertainty around key commercial inputs to the project financial model.

A key trend we see at the moment is jurisdictions transitioning from a monopoly-run power generation structure to a more distributed system with various ownership structures. This is a very positive move, however, it does require time for regulatory structures and frameworks to evolve/change into an efficient system.

There are other considerations that add complexities to developing long term net-zero roadmaps such as political instability, resource price uncertainty, and security challenges, however, mines in Africa are fortunate enough that there is no uncertainty around the commercial and ESG benefits of implementing renewable energies at their mines as the cornerstone of the net-zero/decarbonization process in the coming years.

PD: There are a number of factors that are assessed by juwi as part of determining the most cost-effective energy solution for mines, and in most cases, the optimal solution is quite site-specific as it is based on an assessment of the existing electricity supply options, life of mine, the available renewable energy sources and project financing costs.

Furthermore, the renewable energy options and cost are determined by a few important considerations, including the available land area on the mine site, proximity to an existing grid, access to off-site solar/wind facilities through existing grid infrastructure (“wheeling”), reliability of the existing electricity supply, the required integration technologies and the wind/solar resource at the site. Often the lowest cost form of electricity is from on-site solar PV or wind generation that is coupled with cheap project financing, either directly from the mine or from a third party IPP.

It is also worth noting that there has recently been a lot of focus on assessing how integrating the mining loads with the power generation system (or changing the mine operating times) can reduce the cost of energy, as shifting mine load to times of high renewable energy generation can yield cheap or free energy. This will become quite a significant opportunity in the future when the amount of excess renewable energy increases.

PD: Having teams that have developed and deployed projects on mine sites in multiple countries has no doubt generated experience that is highly valuable to juwi, but also the industry as a whole. In the early stage of markets, proof of concept is quite important for key stakeholders to be confident in moving forward with particular technologies. This is evident in the DeGrussa project proving the technical capability of such projects and thus opening up a number of opportunities in Australia and around the world, and also the Elikhulu project in South Africa, which is important in blazing the regulatory path with Eskom to ease the process there; juwi has 11 off-grid / mining projects either completed or under construction in Australia and Africa, and we have found that the intricacies of these projects have informed how we develop and plan for the future, particularly the following items:

Development of our juwi HYBRID IQ micro-grid control system and pushing the envelope on maximizing RE penetration (or minimizing curtailment) and also integrating with mine-site processes; understanding where the solar PV / Wind / BESS market is at from a cost perspective so as to ensure that the correct balance of RE penetration and LCOE is maintained – in most off-grid sites the best solution (if mine life allows it) is a combination of on-site solar PV, wind and battery storage integrated with the existing generation source.

From a regulatory perspective in South Africa, we are seeing tangible improvements, but challenges remain in the details of grid interconnection regulation and associated costs. Again, there is no one-size-fits-all approach for these projects, so strategic planning, engineering, and development are required from an earlier stage for projects to be a success.

PD: Similar to where Australia was 2-3 years ago, 2021 was an inflection point in Africa where the discussion in board rooms is now “how much” renewable energy should we deploy, not “if”. Even in locations such as Senegal where the HFO price is quite low, renewable energy projects such as Eramet’s Grande Cote Operations site (solar PV and BESS) can obtain meaningful amounts of decarbonization while providing the lowest cost energy solution.

In South Africa there is also a very strong push for the deployment of either on-site renewable energy or off-site wheeled renewable energy, which will help to sure up reliability of supply, reducing the current cost of electricity, and hedging against future price increases. As mentioned earlier, the demand is so great here that the availability of good sites is quickly becoming a constraint.

PD: It is abundantly clear that energy storage is required in order for miners to meet the future decarbonization targets relating to electricity generation. A trend we are seeing is that longer-duration storage will become more prevalent as the cost of renewable energy decreases and the requirement for renewable energy capacity increases. There are a number of different storage technologies available to miners for these projects, with the selection being based on the scale of the project, price of electricity, and proximity to resources. At this point, however, lithium-ion battery storage is the most suitable solution for the majority of applications, with alternative technologies such as sodium ion, vanadium flow, hydrogen, pumped hydro, and more recently gravity storage as alternatives for some sites.

PD: Further cost reductions and new low-cost storage technologies combined with higher fuel and grid electricity prices will continue to make an impact on the ability of mines to increase renewable energy penetration and reduce LCOE. Aside from electricity generation, the electrification of mobile plants is an important part of the decarbonization strategy for mines. We also see mine site integration and optimization of mining processes to access low-cost or unutilized renewable energy, which is the major reason why we have developed juwi HYBRID IQ.

It is also worth touching on hydrogen technology, which gets a lot of attention. While in most cases there has been no clear economic benefit for hydrogen technology in projects that we have analyzed, the development of hydrogen production (electrolysis), transport, and usage is very dynamic and we expect H2 to become more relevant in the near future.

PD: We are a renewable energy solutions provider to the mining industry, and pride ourselves on assisting mining companies to achieve decarbonization goals while maintaining or even reducing cash operating costs. As part of this process, our key focus is to not negatively impact mine site operations/production and to maintain/improve the reliability of the electricity supply in operations.

Our 11 off-grid / mining projects in Australia and Africa include several global flagships such as DeGrussa, Sukari Gold, and now Northern Goldfields. This shows that our solutions add value to the mining community.