Lowest Cost of Energy Mining

Energy and Mines caught up with Jeff Nitsch, Senior Manager, Sales and Policy from Acciona to get his informed views on opportunities for remote and grid-connected Australian mining operations to invest in renewables as well as lessons learned from utilityscale power purchase agreements with Chilean and Australian industrials.

Energy and Mines: How do you view the current contract opportunities for mines with Australian operations?

Jeff Nitsch: Miners are focused on mining. They don’t want to deploy capital unnecessarily into energy assets but they do want the lowest cost of energy. The lowest cost of energy, particularly in remote mines, is renewables given the ability to replace both diesel and gas. The market for renewables supporting mine sites is growing, because it makes rational economic sense.

E&M: Are you focusing on grid-tied or remote mines in this market?

JN: The largest benefits are available for remote mines given the ability to offset diesel fuel consumption, however, Acciona Energy also has a “front-of-meter” offering for grid-tied mines, metals, and other industrials which offer long-term savings hedges against rising electricity costs.

E&M: How has Acciona adapted its IPP-model to suit the business needs and demands of mining customers?

JN: Miners want reliability at the least cost, but they also need flexibility. Acciona Energy seeks to match its IPP offering to its customers’ requirements, which may include the ability to terminate contracts early under changing conditions and looking at ways to benefit from future innovations.

E&M: Acciona recently signed a deal with the National Mining Company (ENAMI) in Chile: Can you tell us about the drivers behind this power purchase agreement?

JN: The National Mining Company (ENAMI) is a state-owned company that processes the copper mineral produced by medium and small sized mining companies. ENAMI’s goal was to become the first mining company to operate with 100% renewable supply at a competitive price, under a 24/7 supply scheme and to unlock the development of new renewable projects in the Atacama region of Chile.

The solution provided by Acciona consists of a long-term PPA (over 10 years) supplying ENAMI’s facilities in Chile, including future expansions. To match the 24/7 demand profile, Acciona is developing a portfolio of assets that are both technologically and geographically diversified (wind + solar).

E&M: What lessons from Chile can be applied to the development of Australia’s corporate PPA and behind-the-meter renewables markets?

JN: Renewable PPAs and behind the meter solutions make sense for miners and industrials looking to hedge their electricity costs. In an off-grid environment, there are even more opportunities to hegde energy costs, lower logistical costs (from fuel transportation and storage), and manage commodity volatility while also reducing emissions and the risk of environmental hazards.

E&M: What are some other examples of recent projects for mines or other industrial users?

JN: Other than in Chile, Acciona Energy has recently entered into a long-term agreement with Viva Energy that delivers 100GWh to the Geelong Refinery. We are currently working on a number of mining opportunities in Australia and overseas. We are very proud of our relationships in the mining and industrial sector.